This document contains information about Stephen Hansell, a professor in the Department of Sociology at Rutgers University. It provides his contact information, including his website, email address, and phone number. The document discusses rationing in medical care and different forms of rationing, including economic rationing, implicit rationing by doctors, and explicit rationing by insurance companies. It also covers health maintenance organizations (HMOs) as an example of implicit rationing, how they work from the perspectives of physicians and patients, and whether they actually save costs.

1. Stephen Hansell, Ph.D.
Department of Sociology
Institute for Health Research
http://sakai.rutgers.edu
shansell@rci.rutgers.edu
609-203-2830

2. younger, better educated patients like college grads, ask questions more
and they get better treatment. Physicians dont like cranky patients, but
they still get the best treatment.
Class 21 – HMO’s and
Rationing

3. I. Rationing influences medical care
organization
A. Demand for medical care always greater than
supply
• everyone gets sick and dies, in the last 6 months of
oyur life, you will be the most expensive patient
1. Rising demand cannot be satisfied
2. Rationing is inevitable

4. B. We have always had rationing in some form!
1. Economic rationing
– economic marketplace makes rationing decisions
– often by default
– like when the managed care refuses to pay for medical
coverage, more and more patients cannot get the right
care
2. Implicit rationing
– doctors make decisions about who gets care and who
does not
3. Explicit rationing
– third party, almost always an insurance company, makes
the decision
4. we have all three in Us

5. II. Economic Rationing (Fee-for-service)
A. Doc bills patient directly for treatment
B. Claim-based rather than need-based
C. You get only what you can pay for, or what your
insurance will pay for
• if your insurance company cant pay for then the
doctor stops treating you
D. Rich people get more, poor people get less or none
• rich people have the power of influence and so
they get the right treatment, no one listens to the
poor people
• the assumption is of a free market, where it
regulates the supply and demand.
• problem = this never happens. there is NEVER a balance

6. E. Assumes free market automatically regulates supply
and demand
doctors bill more if they want to - if they want more
money, they just add another service
fewer and fewer employers are providing healthcare
insurance
insurance companies started managing care and
deciding if someone needs the care instead of the
doctor
F. FFS escalates costs
G. FFS has broken down
• the overall inflationrate in america is almost 0, not in
medicine though
H. Doc-patient interaction
• doctors only spend as much time with you as much

7. III. Implicit rationing
– started in the british health system
A. Capitation
• key concept underlying care
• fixed amount of money for a patient for a year
• if the helthcare provider gives more, they loose
money, if they spend less, they gain money, so they
refuse to spend a lot of money, so you dont get
great care
B. Doc decides who gets care
C. Built-in limitations on services
• physicians cannot overspend on a person

8. IV. HMO example of implicit rationing
– hmo = health maintenance organization
– it is a group of physicians you select and you
just go to them
– your employers pay these hmo’s
A. Employer pays HMO a yearly capitation fee
B. HMO provides patient with all needed care during
the year
C. HMO assigns each patient to a primary doc
• but people did not like asigned doctors, so now
they let you choose out of a small group of patients

9. D. Primary doc decides how to allocate resources to patients
• triage = patients go through a sorting process are sorted into 3
different categories
• monor cases = feaver and wounds
• intermediate = people with serious illnesses who will not die
soon and can be seen regularly but at leisure
• serious cases = people that need to be seen stat
E. Incentives to physician to limit treatment
• explicit incentives = some insurance gave bonuses to physicians
who did not give a lot of treatment to patients
• government banned them
• implicit incentives = physicians that have a “good outcome” are
given other incentives
V. HMO's from physician's perspective
A. Docs earn less
A. than private practitioners
B. But docs work shorter hours
B. and know ahead of time

10. VI. HMO from patient's perspective
A. Patient often disagrees with doc judgment of
seriousness
B. Care is provided by whatever HMO doc is on duty
C. Low out-of-pocket costs

11. D. Non-economic barriers to treatment
E. Doc-patient interaction
F. HMO's good for routine care
G. HMO's not good for specialized care of serious or
rare illnesses

12. VII. Do HMO's save money?
A. Yes, by limiting expensive inpatient care and
specialty services
B. HMO's not more efficient at providing routine care
C. Wellness programs do not save money

13. D. But there are still questions!
1. Early HMO's could select healthy patients to
avoid costs
2. But now, new patients are sicker, less affluent
patients
E. HMO's do not provide care fairly to all
F. HMO's may under treat people

14. VIII. Other implicit rationing prepaid-group plans
A. IPO
B. PPO
C. Point of service plan

15. Stephen Hansell, Ph.D.
Department of Sociology
Institute for Health Research
http://sakai.rutgers.edu
shansell@rci.rutgers.edu
609-203-2830