Defining 'Rationing'

http://www.futureofcapitalism.com/2009/07/defining-rationing

One term that gets thrown about a lot in the health care debate is "rationing." Over at the blog of the Ayn Rand Center for Individual Rights, Don Watkins draws a distinction between health-care rationing imposed by the government and the allocation, or limiting, of health care by the working of prices negotiated or set in a free market. It's a distinction, as he puts it, between force and voluntary trade, or "between you choosing what groceries to buy and the government telling you what food you're allowed to eat." It's a useful distinction to keep in mind. For the individual who can't afford the caviar to put in the grocery cart, the outcome is pretty much the same as if the government had banned caviar, so the distinction may not mean all that much. But for those who can afford it, and for the caviar manufacturer, the outcome is different. And at least in the more free scenario, the person who can't afford the caviar one day has the opportunity to earn enough to afford it some day in the future.

Caviar, though, is more obviously a luxury good than, say, advanced cancer treatment. And any government-run system will necessarily involve some government official or politician deciding what health care is a meat-and-potatoes minimum that it's just uncivilized or foolish for an affluent society to allow elderly, young, poor, or unlucky people (or, more complicatedly, lazy or reckless or self-destructive people) go without -- the health-care equivalent of a food stamp diet -- and what constitutes the health-care equivalent of caviar. That's why there is all the talk of rationing. As President Obama is fond of pointing out, these aren't easy questions, which is why they are unresolved, though they have been debated -- well, since at least the January 5, 1950 New York Sun that hangs in a frame on my office wall with the front-page headline "Dewey Pledges No Tax Rise, Hits Truman Health Plan."

Mr. Watkins also makes the additional point, which I have been emphasizing here, too, that we don't have a free market in medicine today in America, because government involvement is already substantial.

by Editor  |  Jul 22, 2009 at 9:58 am Related Topics:  Health Care receive the latest by email: subscribe to the free futureofcapitalism.com mailing list