This chapter deals with another important aspect of providing healthcare services: the benefit package. Taking the “WHO cube” (see Section 7.1) as the basis, the question is: which services should be made available to whom at what price? Price is meant here as the price to be paid by the patient at the point of service, which could be the full price reflecting cost or supply and demand, a subsidized or stipulated price, some form of co-payment or a user fee. After discussing scarcity and the need for rationing as well as different approaches to rationing, the chapter looks again at the cost per QALY approach, which emerged as a key tool of health economics in the rationing debate. After reflecting on essential health service packages, the question that emerges is how to define them.

Scarcity of resources and the need for rationing

Scarcity of resources in public healthcare systems is a well-recognized fact. Boundaries need to be set regarding prevention, diagnosis, treatment and rehabilitation. And this is not a new phenomenon. During the 1940s, a limited supply of iron lungs for polio victims forced physicians to ration these machines. Dialysis machines for patients in kidney failure were also rationed. Indeed, there is a fascinating story concerning the Seattle “God Committee” in the 1960s that was tasked with choosing who could use the life-saving dialysis machines (). Shortages of donated organs for transplantation has resulted in the rationing of hearts, livers, lungs and kidneys. Levine 2009

Rationing is the allocation of limited goods and services. It is also euphemistically known as priority setting, but it essentially boils down to withholding potentially useful care for certain people. According to economic understanding, rationing always takes place and, in general, is performed by the market mechanism: the price of a good and people's disposable income regulate individual allocation. Since the available funds are not unlimited in medicine, there is also a (deliberate) withholding of principally effective services. Clinicians have always rationed access to medical care via some means. At the level of individual decisions, most patients are still at an extreme informational disadvantage due to the highly technical issues involved in treatment decisions and the simple message that treatment will not be beneficial or is not necessary can be used to withhold or ration care.