Running head: ETHICAL CASE ANALYSIS

Rationing and Healthcare Reform: Ethical Case Analysis

Kalyn Skinner and Deborah Jackson
Auburn University/Auburn University Montgomery

Running head: ETHICAL CASE ANALYSIS

Abstract
The Patient Protection and Privacy Act (PPACA) is a healthcare reform law passed in
March 2010 by President Obama. Commonly referred to as, Obamacare, The first part of
this law will be enacted in January 2014 and the remaining by 2020. The law promises to
provide high quality care at an affordable price for all Americans. This is the most
significant healthcare reform since Medicare and Medicaid in 1965

Running head: ETHICAL CASE ANALYSIS

Rationing and Healthcare Reform: An Ethical Case Analysis

In 1944, President Franklin Delano Roosevelt addressed congress and spoke of a
new basic human right that provided all individuals the right to adequate medical care
and the opportunity to achieve and enjoy good health (Sade, 2012). This address was the
first mention of health care equality for the United States (U.S). However, close to
seventy years after this address there are still 48.0 million people or 15.4 percent of the
population that are uninsured (U.S. Census Bureau, 2012). President Barack Obama was
elected president in 2008. He began to work on a healthcare reform plan that will provide
health insurance to all individuals. In 2010, congress signed the Patient Protection and
Affordable Care Act (APPCA). The goal of this healthcare reform is to provide all
individuals with the opportunity to maintain good health and at the same time save the
nations economy.
Healthcare Reform Summary and Synthesis
U.S. healthcare is not currently a system, but a fragmentation of care delivery. It is
made up of individual consumers, providers, and payers who all operate independently
and look out for their own self-interest. Healthcare reform goal is to reduce costs by
providing better access, quality, and efficiency (Mulliken, 2011). On March 23,2010 the
PPACA was signed into law. This, close to one thousand page, bill outlines the next ten
years for new policies and pilot programs. The bill will provide quality, affordable
healthcare for all individuals, improve quality and efficiency of healthcare, and help
lower the governments spending on healthcare costs (Democratic Policy and
Communication Center, 2010).

Running head: ETHICAL CASE ANALYSIS

The key features are concerned with coverage, cost, and care. Coverage includes ending
pre-existing conditions exclusion for children. Health plans can no longer limit or deny
benefits to children under nineteen, due to a preexisting condition. Young adults will be
allowed to stay on their parents coverage plan until the age of twenty-six. Insurers can no
longer cancel coverage just because you made an honest mistake. The right to appeal a
denial of claim is guaranteed under the new healthcare laws. Costs includes ending
lifetime limits on coverage for new health insurance plans, reviews premium increases to
justify unreasonable rate increases, and assistance in getting the best coverage based off
your income. Care includes covering preventive care at no cost to you, protecting your
choice of doctors so you can choose the doctor you wants, and removal of insurance
company barriers to emergency services (U.S. Department of Health & Human Services,
2013). The Affordable Care Act will fundamentally alter the policy landscape in which
public health is practiced (Rosenbaum, 2011).
With the PPACA more Americans will be insured, therefore more primary
healthcare providers will be needed. International studies have shown that better health is
associated with an equal split between primary care physicians and specialist. Currently
only 30% of the U.S. physicians practice in primary care (Goodson, 2010). The PPACA
plans to expand the primary care workforce. More primary care physicians are needed
because they have the ability to offer an abundance of services including, preventive
services, vaccinations, counseling, early detection and treatment for common diseases.
Healthcare, in the United States, has always been more focused on sick care rather than
preventive care. The goal of these new amendments will be to bring more attention to
preventive care and the lifestyles and behaviors that maintain health. Value based care

Running head: ETHICAL CASE ANALYSIS

models, such as Patient Centered Medical Homes, will be utilized with the new
healthcare plan. This will encourage the primary care physician and the patient to make
healthcare decisions together. Informing the patient of their options has already to lead to
a decrease in healthcare services use and a more active role in their wellness (Mulliken,
2011).
Physicians payments have been validated since 1992 using the resource-based
relative value scale (RBRVS). This scale evaluation and valuation for accuracy has not
been updated to reflect the care provided and therefore physicians compensations have
declined. If these changes are made with the new models and the others listed above,
primary care has the potential to substantially improve for both the patients and
physicians (Goodson, 2010).
Rationing as part of PPACA future.
Healthcare rationing is defined, by Mariner, as the allocation of scarce resources
among individuals in society according to a fixed allotment scheme (as cited in Cohen,
2012 p. 92). Many people accept the theory of rationing but reject it when it comes to
their own health or the health of their loved ones. Many also believe that there should be
no boundaries or limitations on their access to the best providers and latest technology
and that the quality and quantity of their lives will increase as healthcare innovations are
discovered.
Implicit rationing, based on inability to pay have been around for decades.
Americans have some choice, currently, in the choice of private or public health care but
the poor and the self-employed do not always have this option. Health outcomes for

Running head: ETHICAL CASE ANALYSIS

uninsured individuals are significantly worse than for those that are insured (Gruenewald,
2012).
In 2009, in an attempt to encourage providers to provide patients with better end
of life care congress added the Advanced Care Planning (APC) act to the APPCA. The
proposed bill would have provided healthcare providers with reimbursement for engaging
in voluntary discussions with Medicare patients regarding end of life care. In order to
receive reimbursement several steps had to be taken, including: advanced care planning,
explanation of advanced directives, roles and responsibilities of healthcare proxy, a list of
national and state resources provided, explanation of the benefits of hospice and
palliative care, and an explanation of life sustaining treatments (Harmer & Piemonte,
2013). This bill led to an increase in public attention and was considered by many as
creating a death panel and government regulated euthanasia. The bill was removed from
the PPACA due to all the negative feedback received from citizens and congress.
However, a 2011 telephone survey conducted by the Regence Foundation and National
Journal found that 97 percent of individuals surveyed agreed that patients and families
should be educated about palliative and end of life care (Hermer & Piemonte, 2013).
Members of Congress have worked tirelessly trying to decide how to pay for
health care. In pursuit of healthcare reform under the PPACA, U.S. politicians and
policymakers have decided that competition by private, for-profit insurance companies
offering a variety of plans is the way to control costs by empowering consumers to find
the health coverage best suited to their individual needs (Schneiderman, 2011).
Consumers will go on a government website to purchase their coverage, where they will
pick their premiums, deductibles and copays.

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When it comes to rationing most Americans speak negatively about it. Cohen (2012)
wrote this about rationing, capitalizing on these misconceptions and fears, reform
opponents routinely invoke the specter of rationing to discredit various provisions of the
Patient Protection and Affordable Care Act (ACA) and to distract the public from the
laws true aims. However, some experts view rationing of medical care as a good way of
reducing healthcare cost. Trying to set rules for fairness with rationing is a challenge.
One proposal was to make a defined decent minimum the basic for medical rationing. A
decent minimal is defined as a level of medical care that enables a person to acquire an
education, seek or hold a job, or raise a family. If the person, because of impaired health,
is unable to meet any of these goals, to attain a reasonable level of function within the
persons limit and respectful of the persons dignity, as well as a reasonable level of
comfort, whether it be from pain or other forms of suffering (Schneiderman, (2011).
Ethical issues
Under the PPACA new health reform Americans will not get fair treatment. Some
will get better treatment than others with the new insurance depending on the different
categories they belong, such as the military, the over 65, and people with kidney failure.
With decent minimum rationing of treatment is unethical because it is based on social
worth.
The PPACA addressed several cost containment strategies. Distributive justice is a
primary ethical issue related to cost containment. With limited resources the need to use
them wisely to serve the most customers is important. Working with limited resources,
someone is not going to get the services they need. Finding the balance between

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provision of value in health care and cost containment remains a fundamental ethical
challenge for health care reform (American College of Emergency Physicians, 2010).
Some politicians refer the term death penalty when speaking of individual liberty.
According to the American College of Physicians, (2010), a serious constitutional
challenge to the PPACA is also grounded on claims for individual liberty: it asserts that
requiring Americans to purchase health insurance exceeds the authority placed in the
hands of Congress by the US Constitution (American College of Emergency Physicians,
2010). The entire system could fail if the insurance mandate to purchase health insurance
is overturned for any reason.
Summary and Synthesis: Leadership Perspective
An immediate goal for healthcare leaders is to improve hospital-physician
alignment and strive for clinical integration where there are shared resources and
overlapping function. Alignment occurs when people, strategy, customers, and processes
all work together to maximize patient care and minimize cost (Mulliken, 2011).
Movement must be made for integrated care across the care continuum and accountability
for high quality cost-effective care are some of the basic things that leaders in future of
healthcare will be faced with.
By attaining a deeper understanding of the implications of system and complexity,
leaders will relate to and interact with others in new ways and be challenged to develop a
new foundation for their role as leaders (Malloch & Porter OGrady, 2011).
The different leadership theories will play an important part in policy
implementation in the future of healthcare reform. Quantum leaders are self-motivated,
competent, change seekers who works toward improvement of their organization. This

Running head: ETHICAL CASE ANALYSIS

type of leader is needed for efficient and effective change in healthcare. The Centers for
Medicare and Medicaid (CMS) will transition to a new value based funding model. This
model will make it essential for expertise in care coordination across the care continuum
in order for reimbursement to occur. With this integration, leaders in all parts of the
system must realize that their role is simply not to make their component thrive but to
make the whole system thrive. (Porter O-Grady & Malloch, 2011). A quantum leader
recognizes the importance of this and actively works to improve their organization. Those
who embrace this integration at every level from policy, to plan, to practice are the
organizations that will succeed (Rosenberg, 2012).
The Transformational leaders emphasis is on empowerment. They have an ability
to accept change and share their vision with the entire organization. The Affordable Care
Act is transformational, and enormous implementation challenges lie ahead (Rosenbaum,
2011). There is so much work to be done in public health policy. The Act represents a
singular opportunity not only to transform coverage and care, but also to rethink the basic
mission of public health in a nation with universal coverage (Rosenbaum, 2011). These
transformational concepts can be applied to all areas of change, associated with reform
and being a leader that embraces change will assist the healthcare system transition to
better care.
Emotional leaders are concerned about followers being able to take responsibility,
willing to correct situations. They set the tone for others around them. Health care
leaders will use this leadership style to communicate change among groups and
individual encounters, such as negotiation and conflict resolution. Shared leadership is a
lateral influence among peers, everyone is considered equal. The Institute of Medicine

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(IOM) report The Future of Nursing (2010) challenge and recommend that all nurses and
healthcare professionals work to the maximum extent of their leadership education. The
use of a shared leadership approach to healthcare reform, of lateral influence among peers
and all individuals treated equally, would follow this recommendation and would allow
individuals to reach their full potential.
The implication for leadership in healthcare is significant. The integration of
quantum, transformational, transactional, emotional, and shared leadership styles in
healthcare will help the transition in healthcare to occur smoothly and allow for the best
outcomes to occur. The overall goal is to provide the patients with high quality effective
care and this can be accomplished by an organization with leaders that are willing to
accept and embrace the change and adjust leadership style as necessary.
Economic Analysis
The most important contribution economist can make to the operation of
healthcare system is to be relentless in pointing out at that every choice involves a trade
off- that certain difficult questions regarding who gets what, and who must give up what,
are inevitable and must be faced even when politicians, the public, and patients would
rather avoid them (as cited in Milstead, 2013 p. 193). Debt is defined as a liability or an
obligation to pay back what is owed. Every year that the U.S. government spends more
than they collect in taxes, it records an annual budget deficit. In 2011 the total budget
deficit was 14.3 trillion dollars (Mulliken, 2011). Many economists blame this large
amount of debt on healthcare. Laura Tyson, an economist, said We do not have a debt
problem in the United States economy we have a healthcare problem (Mulliken, 2011 p.
6).

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11

Even after the passage of the healthcare reform bill in 2011 there has still been an
increase in spending in Medicare and Medicaid. The reason thought to be behind this is
medical providers driving up cost and because consumers have not been taking care of
themselves for far to long. Many believe that we, as a country, provide a lot of
unnecessary medical test, medicines, and procedures that drive up healthcare cost.
Application
Macro involves the alleged 130 million Americans who are uninsured due to
inability to afford insurance because of the high cost. The goal of healthcare reform is to
provide insurance through government plans funded by taxpayers or private plans funded
by taxpayers that offer lower rates. Reform calls for controls on cost, demand and
utilization to provide universal healthcare.
From the political point of view, it can be said programs exists in the U.S. for the
majority of people needy or poor in its insurance programs, Medicare and Medicaid. The
majority of private health insurances are due to common policies of employer private
insurances. The government and private insurances share in financing of the U.S. health
care systems. Individual Insurance Mandate requires all individuals not covered by their
employer, Medicaid, Medicare or public plans to purchase private insurance or pay a
penalty, with a few people being exempt. Congress will provide some assistance to low
income families when this becomes effective.
States have the ability to set up health insurance exchanges in which they have some
say in their premiums and what is included in their standards, excluding specifics set by
ACA. If the state fails to set of exchanges, it defaults back to the government where they

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will have no say in it. There are 23 states and the District of Columbia that has their
plans for exchanges and the other 27 defaulted to the government.
States also have the opportunity to obtain a waiver to enact an insurance plan on their
own. The plan has to meet certain criteria and compare with the ACA. If the state meets
the requirements it would be exempt from some ACA requirements. This state will
receive tax credits and compensation in which it is entitled to under the ACA.
Micro issues are how health care policy directly affects the quality of the patientphysician encounter. Other issues that matter are the over abundance of paperwork for
doctors, and the expected amount of care to be provided with added preventive and
counseling. A lack of efficient, healthcare providers such as a shortage of nurses and
doctors will even further decrease access to care and level of efficiency. If healthcare
policies are implemented and healthcare workers are offered incentives to work in rural,
under-served areas, where the people are poorer, this will increase disparities that already
exist.
Advanced economies face large fiscal adjustments needs, and containing the increases
in public health spending should be an important part of countries fiscal consolidation
strategies. Health reforms have the potential to significantly reduce health spending and
promote growth with the most important strategies involving a mix of macro-level
controls and micro level reforms to improve spending efficiency (Coady, Clements, &
Gupta, 2012).
Conclusion

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