Friday, August 28, 2009

On rationing

Ronald Bailey has up an invaluable piece on the subject of rationing (for the purpose of fisking Ezra Klein, but that's not important here).

It is useful because it addresses the conflation of true rationing with the machinations of the market. In particular, rationing is

from Britannica:

Government allocation of scarce resources and consumer goods, usually adopted during wars, famines, or other national emergencies.

In application to medical care:

[David Leonhardt writes] "[...] rationing is an inescapable part of economic life. It is the process of allocating scarce resources." The crucial question that Leonhardt misses is that "rationing" depends on who is allocating the scarce resources. It's not rationing if an individual decides to spend his money on a 16-ounce steakā€”but it is rationing if he can only purchase a USDA prime rib eye when he has a coupon issued from a government agency. In other words, true rationing occurs when individuals are forbidden from spending their money on products or services they want to buy.

Imperfect as private health insurance markets are, if a customer [or his employer] doesn't like the decisions made by Blue Cross Blue Shield, Kaiser Permanente, or Golden Rule insurance bureaucrats, he can look elsewhere for his health insurance coverage. But if the government health care scheme becomes a monopoly, when the bureaucrats at the new Health Benefits Advisory Committee decide that a treatment should be withheld, that treatment will be withheld. That's rationing.

This is a key point which is ignored or obfuscated by government monopoly advocates: there is no rationing if you have the ability to take your business elsewhere. And that is precisely what they are endeavoring to take from you, the right to decide what medical care you want and how much you are willing to pay for it.

This is the only true issue in the whole health insurance debate: who makes those choices? Are you allowed to make them, will they be imposed on you by government?

All the rest is just details.

Labels: ,


Post a Comment

<< Home