...For starters, Holbo has a very simplistic view of rationing--or perhaps, the objection to rationing that most libertarians have. Either it is Britain in World War II, and the government has forbidden you to purchase more than 6 bandaids, or we don't have rationing.
This is not true either philosophically, or technically. That last principle I articulated is only one of the possible objections to rationing--one that I take it Mr. Holbo and I share, unless he is simply unwilling to come out and say he favors letting rich people die if poor people can't get a given treatment. I might point out that rationing interferes with voluntary transactions, and that if the government wants to redistribute things, it should damn well raise the taxes and buy them. I could question the justice of whatever regime you come up with. These are all actual problems with any of the proposals that will be passed.
But even after you get beyond that, the more "practical" considerations remain. If the government crowds out private health insurance for many people--a result that a number of analysts on both right and left think (hope) is likely, then the government rationing regime becomes actual rationing for the majority of the population. There is also the fact that private insurers often base their services around what the government does, setting their rates as a percentage of Medicare rates, using Medicare to define what standard medical practice is, and so forth.
The core problem with rationing, for most libertarians, is that even if you think that the government's interference is just--and hey, in the case of World War II, I am probably willing to listen--that it has other effects we recognize as bad. Black markets breed crime. Government rules are necessarily extremely broad and will make some people worse off. But the core issue is that when you disable the price signal, you usually severely degrade the production and distribution of the good in question. I hate to drag out Hayek again, but that old chestnut is still the single best exposition of why you might choose not to ration, set price floors/ceilings, or otherwise disable the price mechanism, even if you would like to see some more just distribution of the goods in question:
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Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. It does not matter for our purpose--and it is very significant that it does not matter--which of these two causes has made tin more scarce. All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply. If only some of them know directly of the new demand, and switch resources over to it, and if the people who are aware of the new gap thus created in turn fill it from still other sources, the effect will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes and the substitutes of these substitutes, the supply of all the things made of tin, and their substitutes, and so on; and all his without the great majority of those instrumental in bringing about these substitutions knowing anything at all about the original cause of these changes. The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity--or rather that local prices are connected in a manner determined by the cost of transport, etc.--brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.
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Mechanisms to distribute tin without prices have been tried, and found wanting. So have mechanisms to distribute practically every other good you can think of, from housing to hotdogs. Rent control distorts the housing market and discourages landlords from building or improving their housing stock. Price controls on bread result in shortages, and often distort the non-controlled sectors of the market. Fuel subsidies result in your precious tax dollars being diverted to Columbian roadside vendors who will siphon the gas out of your tank at great danger to themselves and pay something closer to market rates for it. Etc.
I mean, fine, let's not call it rationing. Let's call it "Fred". You'll still end up with a crappy, overcrowded housing stock and shortages of basic goods. What philosophical principal favors this?
Holbo says I'm oscillating between endorsing rationing, and abhoring it. As it happens, I'm not "oscillating" between anything. For one thing, I'm not particularly worried about IMAC denying treatments to people, though I think it's perfectly rational that seniors are, because frankly right now they get a really great deal.
There are two entirely separate questions here. The first is that we would like everyone to have all the health care they could ever possibly consume, but we can't. This is true of other goods, like food and housing. I find the process of figuring out what to produce, or provide, fascinating, which is why I am a business journalist. It is especially important in medicine because of the somewhat unique market. Whether the government is paying, or private companies are, there will continue to be core tensions between what the doctors want, and what the people writing the checks will approve. Right now, Medicare and Medicaid handle these problems somewhat differently--they simply slash the reimbursements until some providers refuse to take their patients. But if the government comes to dominate health care payment, that problem will become more explicit. One way or another, we're going to have to confront the fact that we can't all have everything we want--and that not having everything we want, in this case, probably includes suffering and earlier death for at least some people.
The second problem, which makes a less stirring Sunday supplement article, is that this allocative process can get badly screwed up when the government gets involved. To take one small example: we have a comprehensive national health care plan for seniors. Yet we have a shortage of geriatricians, the one specialty that you would think would be booming. Why? Because Medicare sets a single price for the services of geriatricians, and it is low. Since the field is not particularly enticing (though arguably it really should be, since geriatricians have extremely high job satisfaction compared to many more popular specialties), very few people go into it. It's one of relatively few specialties that consistently has most of its slots and fellowships unfilled.
I've already discussed what I think will happen to new medical technology and prescription drugs under a more comprehensive government system. For the same reason: prices are very useful things. And contra the liberals who keep saying I am maintaining this belief in the face of overwhelming evidence, we in fact have overwhelming evidence for two things:
1. National health care systems control the prices of inputs, especially the prices of inputs produced by corporations: medical technology and drugs.
2. Price controls lead to shortages and other suboptimal results that decrease the general welfare, even though they may very well benefit some specific people.
People talking about how Europe is not paying its "fair share" of drug development costs have the problem wrong. Drug companies charge what the market will bear. Drugs wouldn't be any cheaper here if Europe dropped its price controls. What we would have is more drugs. But this is a hidden cost. And governments almost always prefer hidden costs to explicit ones. It's just electoral logic.
I understand that progressives object to price rationing because it implies that people who don't have the money aren't worth saving. But the number of people who actually don't get treatment they would benefit from because of their insurance status is small, and there are more direct ways to deal with this problem. You don't gut rehab an entire industry because 2% of the population can't afford its products. You figure out a way to help them buy the products...
meganmcardle.theatlantic.com |
