Robert Wright notes that "we already ration health care; we just let the market do the rationing." This is a true point made by the proponents of health care reform. But I'm not sure why it's supposed to be so interesting. You could make this statement about any good:It is up to proponents of the Democratic reforms to explain why rationing by government is superior to rationing by the market. And why the entire market needs to be changed rather than just targeting those people who today truly want health insurance yet can't afford it. And does your argument apply to every market - food, housing, clothing?
"We already ration food; we just let the market do the rationing."
"We already ration gasoline; we just let the market do the rationing."
"We already ration cigarettes; we just let the market do the rationing."
And indeed, this was an argument that was made in favor of socialism. (No, okay, I'm not calling you socialists!) And yet, most of us realize that there are huge differences between price rationing and government rationing, and that the latter is usually much worse for everyone. This is one of the things that most puzzles me about the health care debate: statements that would strike almost anyone as stupid in the context of any other good suddenly become dazzling insights when they're applied to hip replacements and otitis media.
The rationing is, first of all, simply worse on a practical level: goods rationed by fiat rather than price have a tendency to disappear, decline in quality, etc. Government tends to prefer queues to prices. This makes most people worse off, since their time is worth much more than the price they would pay for the good. Providers of fiat-rationed goods have little incentive to innovate, or even produce adequate supplies. If other sectors are not controlled, the highest quality providers have a tendency to exit. If other sectors are controlled, well, you're a socialist, and I just agreed not to call you a socialist, because you're not a socialist.
But there is also a real difference between having something rationed by a process and having it rationed by a person. That is, in fact, why progressives are so fond of rules. They don't want to tell grandma to take morphine instead of getting a pacemaker. It's much nicer if you create a mathematical formula that makes some doctor tell grandma to take morphine instead of getting a pacemaker. Then the doctor can disclaim responsibility too, because after all, no one really has any agency here--we're all just in the grips of an impersonal force.
But this won't do. If you design a formula to deny granny a pacemaker, knowing that this is the intent of the formula, then you've killed granny just as surely as if you'd ordered the doctor to do it directly. That's the intuition behind the conservative resistance to switching from price rationing to fiat rationing. Using the government's coercive power to decide the price of something, or who ought to get it, is qualitatively different from the same outcome arising out of voluntary actions in the marketplace. Even if you don't share the value judgement, it's not irrational, except in the sense that all human decisions have an element of intuition and emotion baked into them.
McArdle is exactly right that everything is rationed in some way. That is why the first lesson a student learns in introductory economics is the concept of scarcity.
19 comments:
I just got through reading some of Thomas Sowell's work on this issue. His research shows that attempts by government to artificially manipulate the market inevitably fail. This is true from ancient Rome through the wage and price controls of the Nixon era. It is man's great folly that he continually believes he can construct a system that is more efficient than the free market.
Okay, I have to ask again, where in the House bill is anything that resembles rationing, aka: telling gramma to go off and suffer with her bad hip or just plain die?
I am not a fan of that bill, really I'm not. But can we try arguing facts? If fear of government involvement in health care is based, at least in part on the potential of rationing, and by involvement I mean besides MediCare and VA systems.... what is acceptable about what actually exists today in the free market? I mean, if for example, a person bought a policy that didn't include coverage for a particular procedure or limits total spending for something like ICU stays, then I actually do not think the person suffering from the issue this creates has an argument. I really don't. However, there is ample evidence that far more commonly the insurance companies (today) will selectively approve/deny care, especially in situations which are likely to results in large, possibly, continual costs. Why is this better or acceptable? Or to put it another way, if we are against rationing, what is the alternative that will not only forstall government involvement but would prevent private sector insurance from ever doing anything contrary to the coverage terms in a policy (including making the policy language so incompresensible that you would require a legal scholar and an accounting to understand it)? I simply do not understand arguments that fear one form of too much power versus another. 'Absolute power corrupts' is the line, not 'Absolute power, in the hands of government, corrupts'.
Also, I'd like to point out, Senator Grassley (for example) has stated what he thinks folks should fear from so-called "end of life" decision elements of the proposed changes, isn't a rationing discussion. Its that as a policy it is set up to happen entirely too late, these things should be defined earlier and younger. Which I take to imply (as he didn't clarify from anything I've read) is similiar to what Newt Gingrich has praised a system setup in Wisconsin for doing. Apparently analysis has shown clarifying Grandma's wishes when she younger and healthy, and helping families understand the options, has had a direct and measurable effect on costs and patient satisfaction for folks in that particular health care system.
Personally, I've tried to have that conversation with my father, but as with most folks, it clearly bothers him to discuss. He will continually tell me how he doesn't want his kids to be worrying about him, he did help bring us into this world to take care of him, etc. However, not giving us direction, frankly creates a lot of stress, will in fact create a lot of costs, and will likely results in several completely preventable arguments between me and my sister. So, his argument is in fact crap. His pride and fear is overruling his reason. And I happen to think that is the true basis for many (possibly most)folks in a panic regarding the notion of reimbursement for end of life consultations with a doctor.
Rationing by price allows the citizen to decide what is relatively important to himself or herself. (Of course there are limits - one only has so much money). Some people might refer to this type of rationing as "freedom".
Rationing by fiat means that the government decides what is important for its subjects. While this arrangement is often associated with free (as in price), few would mistake it for "freedom". Note that in Rationing by fiat, especially with something as complex as medical care, it is fairly easy to make sure favored or well connected subjects qualify for more care/procedures/medicine than the average person.
Rationing by queue can mean either 1) waiting in line for a limited number of items/procedures, and when they run out, there are no more, or 2) waiting in line until something becomes available, which could take months or years. In either case, it is the owner of the system that decides how much and when. In some situations, e.g. Best Buy offering a limited number of big screen TVs at a super discount price, rationing by queue can be benign - the customer can get the same thing
elsewhere at a higher price. When the government is involved, its subjects might be forbidden from obtaining the item/service elsewhere. Again, VIPs might receive special (but equal!) treatment. A friend of mine had to wait 12 years to get a car in the then East Germany, while others who had connections (money) in the West could jump the queue and get their cars immediately.
Rationing by lottery, if one is allowed to buy as many chances as one would like, does have an element of freedom. However, lotteries in socialized medical care (e.g., names randomly selected to receive one of the few vacant slots for a primary care physician) don't impart much freedom.
It doesn't take a wild-eyed fanatic to concoct scenarios about what could happen under this government-controlled "health care plan." A 07/29/09 Editorial, A euthanasia mandate, in The Washington Times clearly demonstrated that bureaucrats are already making life and death decisions about both children and the elderly, contravening doctors' orders.
Earlier this week on his program, Rush Limbaugh cited a Duke University professor's review of a subsection of Section 1233 of the House Bill that specifically gave a government bureaucrat sole authority to determine how various provisions were defined, even overruling the courts.
On Glenn Beck's TV Show, one of his guests, a university professor, said provisions in bills, such as this "health care bill," are often left vague, because politicians know the courts will then later step in and relegate delineation of "such and such provision" to themselves or to some bureaucrat. That's why it's dangerous for these "advance care planning consultation" for "end of life services" to be so nebulous or open ended.
As the Editorial pointed out, bureaucrats in Georgia have already been allowed by the courts to override a doctor's medical decision about a handicapped child, and bureaucrats in Oregon were allowed to tell a lung cancer patient she could have enough drugs to commit suicide but not the drug her oncologist prescribed to treat her lung cancer!
Does anyone need a better one than Magic Mouth Obama's own example of giving grandma a red or blue pill instead of a hip replacement?
"It is up to proponents of the Democratic reforms to explain why rationing by government is superior to rationing by the market."
"Market rationing" means rationing by money. The health insurance companies can keep MORE for themselves, if they approve LESS for you. Even if you die because of it. Especially if you die because of it.
And there's no competition in the "market rationing" system- when was the last time you shopped around at health insurance renewal time, the way you do at car insurance renewal time? You can't! You're locked in, and not covered for every "pre-existing condition", if you try to change vendors.
"Rationing by government" means that the health care system has a much bigger stake in actually keeping you healthy. Its number one goal is not "make money for the shareholders". Its not trying to make money off you by denying coverage. It's there to keep you healthy. And if something substandard happens to you, there's full accountability at the ballot box for the government.
That's why government runs our fire fighting service. That's why government runs our educational system. That's why government runs our armed forces. That's why government runs our legal system. And that's why, by the end of this year, America will be like every other industrialized nation - government will play an important part in improving health care coverage for our citizens.
You're welcome.
Bachbone -- don't forget the Terry Schiavo case a few years back. You must have been as horrified as I was, to watch the full power of the Federal Government insert itself into the case, and overrule the wishes of the patient and her family, to make the life-and-death decision.
Anyone quoting something they saw on tv, as evidence of anything, except their inability to think for themselves, is always amusing.
"It doesn't take a wild-eyed fanatic to concoct scenarios..."
No, it doesn't. Unfortunately, that's all we've got, with the right wing rent-a-mob crowd.
Why isn't anyone here defending Sarah Palin's lie about "government Death Panels"? Because you can't.
The other issue is abuse. Protections from and remedies for abuse are more broad and accessible in the private sector than for government-run programs. Private companies have a vested interest in keeping customers satisfied. If they act unfairly, they lose business, and they can be sued for compensation and damages. Government has little incentive to keep customers happy. Once the politicians get the program passed and are reelected, they are out of the process. The civil servants who execute the program make the same money whether the customer is happy or not. It's nearly impossible to fire them, and there is no motivation to do so anyway, since the "company" need not show a profit. And, of course, you can't fight city hall.
The profit motive is important. It means that individuals act in their own interests with society often benefiting as a side effect. If they stop doing so, they lose money. Without the profit motive, individual interests are unlinked from societal benefit, so that individuals may "game the system" at little or no risk.
People are greedy, and act to advance their own interests. The key is to link their success with desired societal outcomes. The free market is almost always the most effective way of doing this.
Jaw Bone,
Your money quote, "...if something substandard happens to you, there's full accountability at the ballot box for the government.", is really something to behold. I can just see you in the future....
Not too distant....
Bureaucrat[self-important]: "I'm sorry Mrs....what was your name? Mrs. Jawbone, because your disease has advanced to this stage before discovery it is not cost effective for us to treat you".
Mrs. Jawbone[shaking]: "But I'm only 62. I haven't even started to draw my Social Security yet".
Bureaucrat: "Good, so you understand."
Mrs. Jawbone[shocked]: "What? Wait, no I don't understand. Why can't I be treated? The doctor says that if we start now...
Bureaucrat[interrupting]: "No Muh...Mrs. Jawbone. The doctor is only obligated to counsel you on "End of Life" options. We decide if the doctor will be reimbursed for treating you.
Mrs. Jawbone[tearful]: "But I have a family and my doctor says I can fight this but I have to start now".
Bureaucrat[growing disinterested]: "I'm sorry. Would you like a blue pill?"
Mrs. Jawbone[angry]: "NO! I want better treatment and I have to have it NOW!"
Bureaucrat[snotty]: "I'm really running weeks behind and the waiting room is jammed. I'm sorry I couldn't help you."
Mrs. Jawbone[sobbing]: "What am I supposed to do?
Bureaucrat[from rote]: "Like we always say, 'If something substandard happens to you, there's full accountability at the ballot box!' And you're in luck because next year is an election year."
Mrs Jawbone[seething]: "You bastard! You can't even help your own mother?!"
Bureaucrat[blank stare]: "Next!"
Jaw Bone,
Why are you obsessing about Sarah Palin?
You should be looking into the example that Bachbone provided where the state withheld treatment due to the age and condition of the patient but did offer her doctor assisted suicide.
"Barbara Wagner received [a letter] explaining that the Oregon Health Plan would not pay for her to receive the oral chemotherapy agent Tarceva (about $4,000/month), but would pay for the drugs ($50) necessary for her to commit suicide.
http://politics4all.com/users/fillise/blog/
http://www.kval.com
/news/26140519.html
Death panel? You tell me what you'd call it when the state says "You die".
You tell me where "You die" exists anywhere except your overheated imagination, and I'll start believing you have a case.
I feel a lot happier because of your post. When the best argument you've got is a pack of lies, it means we've won the argument, and the country is going to get proper responsible health care.
Jaw Bone,
I'm glad you are happy because I am concerned about your mental health.
The health of the lady mentioned in the links I provided and first alluded to here by Bachbone is another question.
Jaw Bone, Barbara Wagner is dead.
The state gave her one choice only - death. Oregon would not provide Wagner with drugs to treat her cancer and for the third time here in this thread, they did offer to pay for doctor assisted suicide.
That is a real life (and death) example of how bureaucracies can perform in this country when the question comes down to life, death, and cost.
People don't like that.
I haven't dug very deeply into the whole "death panel" issue because it mostly strikes me as a distraction from fundamental arguments that are more important. However, when I see that, in response to the dust up, the provision in question has been removed from the bill "because it could be misinterpreted or implemented incorrectly" it suggests to me that there's at least some there there, and that it's removal is a good development.
Jaw Bone,
Your "death panel" concern is addressed in this WSJ article:
"Obama's Senior Moment"
http://online.wsj.com/article/SB10001424052970203863204574344900152168372.html
Key to the article is the fact that most Medicare costs are incurred in the last six months of life. From there we can see, and European experience bears this out, that decisions must be made to limit life to limit cost.
It is true that, "Mr. Obama has also said many times that the growth of Medicare spending must be restrained, and his budget director Peter Orszag has made it nearly his life's cause. We[WSJ] agree, but then why does Mr. Obama want to add to our fiscal burdens a new Medicare-like program for everyone under 65 too?"
Seniors are rightfully concerned and so likewise for everyone else.
And how are these decisions made now?
If you have no insurance - you die.
If your insurance company refuses to cover the treatment - you die AND the insurance company gets more profitable.
The insurance company has a very strong financial incentive to limit what they call "medical losses".
There isn't an infinite amount of resources for an infinite number of people, so every single system on earth involves judgment about quality of life, and what care is given.
But the current system of cutting off care to make more profit for stockholders is evil. That has to end right now.
"Key to the article is the fact that most Medicare costs are incurred in the last six months of life. From there we can see, and European experience bears this out, that decisions must be made to limit life to limit cost."
Sound like that will apply to EVERY system.
Tf - you have your health care through the government, do you not?
Why are you trying to keep other Americans out? If it's good enough for you, it's good enough for us.
Biddle,
That's a good question and you deserve credit for asking. I have very serious concerns about the quality of the care I receive and the future of the system for which I've given twenty years of service in order to qualify for, "TRICARE for Life".
"TRICARE for Life" comes with a few catches. For twenty years I had to meet height and weight requirements, pass several physical fitness tests each year, submit to random drug tests, submit DNA samples, and received reduced wages (compared to my civilian counterparts) as a financial offset in order to qualify for medical care while on active duty and beyond. It isn't just about being eliminated for preexisting conditions upon enlistment, if I had failed to pass or accept any one of those qualifiers in the last twenty years I would have had no coverage and no job.
Could you do that? How do you feel about mandatory physical fitness training every day? How many Americans do you think would tolerate that type of control over their lives to receive the promise of medical care until age 65? That's right, "TRICARE for Life" really isn't "For Life". I've also come to learn how dependent our TRICARE is on civilian health care providers. We can get many of the basics on base but in most locations referrals to civilian providers are required. Without those civilian doctors and specialists supporting us our families would suffer.
We don't even have enough doctors, specialists, or facilities to cover all of our active duty personnel without the help of the civilian sector, let alone family members and retirees. Keep in mind I'm talking about active duty personnel, I'm talking about people in the prime of their lives that also meet higher standards of physical fitness and body fat ratios than most, if not nearly all civilians in the same age groups.
TRICARE is constantly under siege from the DoD and politicians as it creates a guns vs. butter contest within the defense budget. We see cut backs, longer waits, and reduced services as routine. Now because we do volunteer for our service there is no point in bringing up the hardships of military life here but don't forget that we've all seen the failings of the VA and Walter Reed on the front pages for years now. I can tell you from personal experience that the only difference in that situation from 1987 to 1997 to 2007 to today is the attention it gets in the media. The rule of being "careful of what you ask for" is applicable here.
One last thing to consider: I volunteered for the Army; I've not offered to volunteer my neighbors.
Still, I have to hand it to you because you asked a good question and the bottom line to my response is, "If you only knew".
Maybe Bill B is volunteering to serve in Iraq or Afghanistan or Korea where the trade off for sometimes good care is death or dismemberment such as the fate of Capt Arthur Boniface or 1st Lt Mark Barrett. Maybe Bill resents that if those two had lived they would be just two more government employees that he begrudges the promises their country made to them.
Biddle,
Your thoughts?
>crickets<
Biddle?
>crickets<
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