Health Care Rationing and Cost Containment Are Not Synonymous

Abstract

Much public discussion about health care assumes, explicitly or implicitly, that only by denial of potentially beneficial care (called "rationing") can cost containment be achieved. This piece critically examines the various current usages of "rationing," and argues that it is being misapplied. Fur- ther, the call for rationing may be deflecting us from fruitful exploration of non-rationing alternatives to cost control. Two of these are briefly sketched as examples: physician fee controls and practice guidelines. Copyright 1989 by The Policy Studies Organization.

Untitled

“…Sales growth may also provide more market power that the company can use to improve performance (Brush et al, 2000). If the company's sales performance has increased and the company's growth has increased considerably, the company will need more funds and will have an effect on low or no dividend payments (Diah et al, 2016). Research by Wasike & Ambrose, (2015) shows that sales growth has a statistically significant and negative relationship with dividend policy.…”

“…Total asset turnover (TATO) measures a company's sales value relative to its asset value. The TATO ratio can be used as an indicator of a company's efficiency in exploring its assets to produce income (Diah et al 2016). Company productivity can be proxied by TATO.…”

“…Optimizing assets use in maximizing the company's operations to increase sales in one period will have an impact on dividends distribution to investors. The higher the asset turnover of a company means that the higher a company's ability to distribute its dividends (Diah et al, 2016). Likewise, if the asset turnover of a company is low, it means that lower the company's ability to distribute dividends.…”

“…Maintaining or increasing sales growth is management's great choice, as it has to do with shareholder welfare. The decrease in the company's potential growth and low cash flow forces management to cut dividends to build financial leeway related to future investment needs (Deshmukh et al, 2013), so the company chooses to hold earnings for one period and not pay dividends (Diah et al, 2016;Marpaung & Hadianto, 2009). Damayanti & Achyani (2017) stated that the high growth of the company 132 will increase need funds for company expansion costs.…”

Deciding How to Decide: The Case of Health Care Rationing

“…The necessity of cost containment is partly a consequence of the success of medical research and technology, which increase the quality of life and survival rates for formerly untreatable conditions (Daniels and Sabin 2002, p. 2). Aaron and Schwarz (Aaron and Schwartz 1990) have persuasively rejected arguments (for example, Reagan 1990) that rationalization, that is, the (financially) more efficient use of resources, can suffice to control the costs incurred by medical progress and demographic changes. This necessitates rationing, or curtailing, of health care, which brings up questions about the justice and efficiency of its allocation.…”