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September 14, 1994

Rationing Resources While Improving QualityHow to Get More for Less

Author Affiliations

Kaiser Permanente Southern California Pasadena, Calif

JAMA. 1994;272(10):817-824. doi:10.1001/jama.1994.03520100085041

MY LAST article concluded with a very unpleasant idea— that rationing services, refusing to cover a service from shared resources, is inevitable.1 Although no one knows the correct proportion of the gross domestic product (GDP) that health care should consume, it is clear that one way or another, sooner or later, the growth must be stabilized. Ideally, we would like to find all the required savings in administrative and operational inefficiencies, without having to touch the content of care. Unfortunately, an analysis of the increases in health care costs over the last 30 years indicates that about two thirds of the excess increase—the portion of the increase that exceeds the general inflation rate and population growth— is caused by increases in the "volume and intensity of services." The other third is caused by medical price inflation that exceeds general price inflation. These two forces exist in large part because

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