The cost of living: kidney dialysis, rationing and health economics in Britain, 1965–1996

How important is research in shaping policy when a new life-saving medical technology becomes available, but happens to be very expensive? Taking the case of kidney dialysis, this paper argues that the emerging discipline of health economics had little influence relative to national differences in health service organization and cultures of expectation of provision. Paradoxically, the most effective covert rationing was achieved under the British NHS which ostensibly provides free care for all, while the uncentralised market system in the US gave way, on this issue, to almost universal state-subsidised provision. Under the British system, the most cost-effective options for renal care tended to flourish, but some patients were turned away. Physicians have been held responsible for complying with covert rationing: this paper suggests that early gearing towards socially-useful survival filtered back to selection at primary level, possibly continuing long after specialists wished to expand. Public outcry, though muted, reached parliament and caused minor shifts in policy; the main aim of the voluntary pressure campaign, to release more organs for transplant through ‘opt-out’, remained unrealised in the UK. Yet dialysis was targetted for expansion in the 1980s just at the point when health economists were presenting evidence for its low cost-effectiveness compared with other expensive interventions. According to the main strand of argument in this paper, comparisons with other countries and between regions were most influential in breaking the hold of covert rationing: policy making by embarrassment. However, in the 1990s, there are both theoretical discussions of explicit rationing, and open intiatives afoot to target dialysis for rationing.