What's Rationing and Editing the Post

The Washington Post has a front page article today on the future of rationing in health care. The article opens:

The question came from a Colorado neurologist. "Mr. President," he said at a recent forum, "what can you do to convince the American public that there actually are limits to what we can pay for with our American health-care system? And if there are going to be limits, who . . . is going to enforce the rules for a system like that?"

President Obama called it the "right question" -- then failed to answer it. This was not surprising: The query is emerging as the ultimate challenge in reining in health-care costs that now consume $2.5 trillion per year, or 16 percent of the economy. How will tough decisions be made about what to spend money on? In a country where "rationing" is a dirty word, who will say no?

Indeed. The article then goes on to quote some supposedly smart people on how to define that "dirty word": 

Others retort that the United States already has rationing: The uninsured and under-insured do not get the care they need. "We're already doing it," said Stanford University epidemiologist Randall Stafford. "We're just doing it in such way that it doesn't service societal interests." 

While being sympathetic to people who cannot afford the kind and quality of health care they might want, that is not the same as being told by a bureaucrat that you can't have a treatment even if you can afford it. Or as my colleague Shikha Dalmia explained yesterday in her excellent column:

The left has been trying to address fears of rationing by trotting out an old and tired trope, namely, that rationing is an inescapable fact of life because every system rations whether by price or fiat. But there is a big difference between the two. If I can't afford caviar and champagne every night, any rationing involved is metaphoric, not real. Genuine rationing occurs when someone else controls access—how much of a particular good I can consume.

Or as I illustrated in my column on health care rationing: 

Imperfect as private health insurance markets are, if a customer 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.

The Post also reported:

Massachusetts, which has achieved near-universal health coverage but is struggling with high costs,…

I offer this slight edit:

Massachusetts, which has achieved near-universal health coverage but and so is struggling with high costs,…

Fixed. 

Comments

[Tomcat1066]

I don't know why it's so hard to get people to understand that we do NOT have rationing now. We have an entity saying they won't pay for something, leaving me free to pay for it if I'm able. That's a huge difference.

Why it's so hard for some folks to grasp, I don't know.

[John Thacker]

Furthermore, while it's true that we already have rationing due to price, Obama and Orszag and his team are promising to ration even further. Remember, their diagnosis of the problem is that doctors are prescribing too much care, particularly at the end of life. They think that insurance companies aren't denying enough care, that the problem is not enough rationing.

Even if one were to concede the argument that government central planners can do a better job rationing than insurance companies (and note that the current system is no libertarian paradise whereby patients are performing the rationing themselves based on price in most cases), they're still calling for more rationing.

[John Thacker]

I don't know why it's so hard to get people to understand that we do NOT have rationing now. We have an entity saying they won't pay for something, leaving me free to pay for it if I'm able. That's a huge difference.

Don't oversell the current system as libertarian, even if the Obama Administration proposals would change it in an less libertarian direction. The current tax system encourages employer-provided insurance. It makes it considerably more difficult for people to buy coverage that is less or more than what their employer offers, or simply covers different services. (Yes, some employers offer a range of plans.) And within those employer-provided plans, there is rationing-- as one would expect where consumers don't pay the marginal costs but are insulated from expenses.

Sufficient taxation or regulation can distort a free market to the point where it's not really what people would freely choose. The power to tax and regulate is ultimately the power to take and destroy.

[R C Dean]

Furthermore, while it's true that we already have rationing due to price,

There is no such thing as rationing due to price. Claiming that

rationing = some people can't afford it

strips the term "rationing" of all useful meaning.

This, of course, is the linguistic game that those who want to impose actual rationing want to play to smooth the way for real, top-down control of what medical care you can get and what you can't. Don't play their game.

[Tomcat1066]

John: I'm not saying the current is ideal by any means. I'm merely saying that we do not have rationing in it's current state, since I am not limited in attaining only the treatment that my insurance company is willing to pay for.

[tarran]

In the meantime, the Federal Government has reconstituted COGME, the same outfit that warned in the 1990's that the U.S. suffered from a "glut" of doctors that needed to be cured by restricting the number of graduates medical schools were allowed to produce.

The problem is that the government is restricting supply while increasing demand through subsidies. Anybody who is more than one month into Econ 101 can tell you how these interventions affect supply and price by using Supply/Demand curves.

At one time medical treatment was about as hard to get as shoes (Huck Finn didn't go barefoot because he liked it). The govenrment hasn't been intervening in the shoe market, and even the very poor now wear shoes that are much better than those available to the wealthy 100 years ago. If the government intervened in the shoe industry the way they do in the medical industry, we'd be spending $2,000 for a pair of flip-flops.

[Tricky Prickears]

if a customer 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.

Unfortunately that's not the case. Most Americans rely on health insurance provided by their employers. Most employers don't offer very many options, if any. Sure, an employee can say "I don't want your "free" insurance", and go on the open market and buy their own insurance using their own money. They don't get a "credit" from the employer, and they do not get a group rate. This is hardly free market competition, and the insurance companies know this. The insurance companies care less about the quality of the service provided to the employee, and more about the price they offer to the employer. The only way, I feel, to achieve free market competition is to outlaw employer provided health insurance. And rationing, isn't that the definition of "managed care"?

[John Thacker]

There is no such thing as rationing due to price. Claiming that

rationing = some people can't afford it

strips the term "rationing" of all useful meaning.

What you're saying is that using "rationing" to include individual calculation of how to allocate limited resources (one's budget) as well as government and other centrally planned rationing is not useful. And I can largely agree with that, though considering the origin of the word, it's not surprising that linguistically it admits multiple definitions. Certainly not the first word or phrase whose definition has been stretched from how it was originally used. (The much debated "judicial activism" falls into this category, with Reason abetting the muddying.)

Still, I think it better and clearer to rail against central planning, a term which cannot be disguised, and to distinguish the importance of choice and freedom (without making unjustified claims about the current mixed system). Rationing as used during WWII simply does not have the resonance as a phrase that it used to have.

[John Thacker]

This is hardly free market competition, and the insurance companies know this. The insurance companies care less about the quality of the service provided to the employee, and more about the price they offer to the employer. The only way, I feel, to achieve free market competition is to outlaw employer provided health insurance.

While I agree with your criticism, surely a step of eliminating the tax preference and replacing it with an individual credit could be tried before outlawing it, yes? Of course, Americans soundly rejected that idea in the 2008 election. (And I don't think that you can make the case that McCain was just a bad candidate; considering how Obama made it the focus of attack ads, it was an issue.)

I'm merely saying that we do not have rationing in it's current state, since I am not limited in attaining only the treatment that my insurance company is willing to pay for.

We don't have "hard" rationing the way that Canada or the UK have at times, where private care is simply illegal. But surely you're setting yourself open for people to say that they're merely setting up a French or German-style system, where private insurance is also available, with the "public option."

Soft paternalism, where the public option is heavily subsidized, or where taxes and regulation distort the market, can allow the government enforce a kind of centrally planned rationing.

Private schooling is not illegal in this country, but you're taxed for the full value of public schooling whether you use it or not. Is it unreasonable to say that this forces people to accept the decisions of government bureaucrats about their schooling more than they'd wish, even if they do have the option of exit?

Merely because it could be worse, does not mean that we don't have distortions that lead to rationing today.

[Seward]

As in a lot of areas of public policy, the government is doing a lot of contradictory things regarding health care and still expecting "good" outcomes. I don't see any change with regards to this any time soon. One of the dumbest things it continues to do is to push and/or incentivize the tie we now have between healthcare and employment. All a public plan would do is simply shift one third party for another third party, and that is just stupid on multiple levels. What the government needs to encourage is a shift away from a three party model to a two party model, just like most of the rest of life.

[Tomcat1066]

John: I don't care how you cut it, we do NOT have rationing. Rationing is when someone restricts how much of something you can have. Instead, we have a company that refuses to pay for a treatment and that's it. You're still able to go and seek that treatment at your own expense. I don't care how you try and cut it, that's not rationing. There is no restriction, there is simply a third party who is saying they won't cover that.

There are plenty of problems in health care that need to be addressed. I'll concede that in a heartbeat. But the fallacy that is routinely bandied about, that we already have rationing, is idiotic to the extreme and is counting on people to think insurance companies are telling them what they can and can't do instead of what the company will or will not pay for.

There is a difference, and that's been my point the whole time.

[Rich]

Scott Wallace: "A mother of five with cancer wins against any rationing scheme ever created."

We'll see. Factor in demographics.

[Seward]

I'm not really quite sure why the definition of the term rationing is all that important.

[Tricky Prickears]

While I agree with your criticism, surely a step of eliminating the tax preference and replacing it with an individual credit could be tried before outlawing it, yes?

Perhaps. If an employer were to offer say, some sort of "enhancement" to an individual's coverage. Maybe "outlaw" was too harsh of a word. We definitely should be on the track of allowing individuals to purchase their own insurance without having to rely on their employers or their group rates.

But on a personal note (take it for what it's worth), I noticed my Father's Medicare supplement insurance has now taken over the administration of his Medicare. Which leads me to believe that we're not on a course of government run healthcare, but more towards a "privatized" government funded system. Big difference. Both suck.

[Seward]

OT: I just finished Amity Shaeles book "The Forgotten Man." I thought it was a well written narrative that pleasantly did not read like academic history and did a good job fleshing out trauma of the time as well as the personalities and of course the problems with the New Deal. I definitely have a new found respect for Wendell Wilkie as well.

[Tricky Prickears]

Instead, we have a company that refuses to pay for a treatment and that's it. You're still able to go and seek that treatment at your own expense. I don't care how you try and cut it, that's not rationing. There is no restriction, there is simply a third party who is saying they won't cover that.

This is just an issue of politically charged semantics. What would happen if you applied your statement to say, business liability insurance. If there were anything that my liability insurance didn't cover, I would not be wasting my money, even if the State does mandate it. How about auto insurance? Even if you're drunk, speeding and run a red light, you're still covered. So, perhaps we need a new word. And, perhaps health insurance (in its present form) isn't really insurance at all.

[Seward]

Tricky,

"Health insurance" is basically a pass for access to health care. It doesn't really work like any other kind of insurance that I know of in fact; indeed, it would be as if you bought auto insurance for known, regular maintenance check ups on your car, as well as flat tires, dings to the body, etc.

[Seward]

Tricky,

I'm sure at one time health insurance did work much like car insurance; uncommon, significant events were what it covered (major injuries in other words).

[Abdul]

"We're already doing it," said Stanford University epidemiologist Randall Stafford. "We're just doing it in such way that it doesn't service societal interests."

Sorry, everyone, I like this explanation of rationing better because it explains why a doddering octogenarian like Hugh Hefner can have three smoking hot blonde girlfriends and I can't have any. It's teh rat1on1ng!!1! If we centralized planning, this gross inequity would be solved, and Hef and I would share 1.5 chicks.

[jsh]

Govt should control everything because everything is already rationed. Everything is rationed because Star Trek replicators that can create anything I want are rationed. I can't have one, so they are therefore rationed. Whether they actually exist is beside the point...

[jsh]

Warp technology and transporters are also rationed, as are universal translators.

[Paul]

Excellent post, Mr. Baily.

[Paul]

Bailey

i will use the preview button
i will use the preview button
i will use the preview button

[jsh]

If we centralized planning, this gross inequity would be solved, and Hef and I would share 1.5 chicks.

You get the real parts, Hef gets the artificial parts of the 3rd girl?

[Tricky Prickears]

Well, what are common things that health insurance doesn't cover? OK, I'll concede elective surgeries. Pre-existing conditions? There definitely needs to be an outlet for that. But what about quality of life issues? Should insurance even consider these things? Say, having a catheter for an enlarged prostate, when a simple surgical routine could correct the problem. Who's choice should that be? After all of the cost/risk assessment should the insurance company make the decision? Should the consumer receive credit and pay for just the upgrade? In other words, "We'll pay for the cheaper treatment, but if you want the more expensive, we won't pay for anything at all". And there are insurance plans which cover roadside assistance and scheduled maintenance and even repairs, usually with few restrictions. So, perhaps splitting up the different types of health care would be in order.

And we all have "access" to health care via ERs.

Anyway, I'm rambling. Just bored.

But you are right Seward, health insurance isn't like any other insurance, perhaps just properly defining it, first, would be a step in the right direction.

[John Thacker]

Instead, we have a company that refuses to pay for a treatment and that's it. You're still able to go and seek that treatment at your own expense. I don't care how you try and cut it, that's not rationing. There is no restriction, there is simply a third party who is saying they won't cover that.

OK, Tomcat, so a "free" single payer government health insurance plan would not be rationing so long as you can go out and get the treatment at your own expense? Fine, then the vast majority of government health insurance plans around the world don't have rationing by your definition, since they allow people to seek care at private clinics. Canada is an extremely unusual case, where private health care for services covered by Medicare has been illegal (but is now increasingly winked at), largely because the US was available.

But even in the UK there's private health insurance and private health care.

I think that defining rationing such that almost no government health system in the world does it is even more meaningless.

Rationing is a slippery slope. Heavily subsidized "free" care (or education) that you're taxed for anyway goes a long way towards rationing, even if you're still allowed to pay twice in order to get private care as well.

[Sean W. Malone]

The only way, I feel, to achieve free market competition is to outlaw employer provided health insurance.

In what universe is outlawing a series of voluntary transactions, and especially a particular bonus that an employer might want to use to entice an employee to join the team (especially long-term) going to improve "free market" competition!?

Pick one Prickears... The system is what it is now, as I think most of us here know, because of intervention and special incentives designed for employers that individuals don't have. Either equalize the tax incentives or do away with them entirely. Don't go "outlawing" things!

[Mike]

Some of what Obama and the gang want to get rid of is treating the old. If I'm 82 years old and I can pay $200,000 for surgery that will give me an extra year of life, you bet your ass I'm going to pay it. And, no I won't care a bit if that has the greatest "societal benefit".

If I want health care, and someone is willing to provide it, and we can agree on a price, no third party should be able to stop it. That is what people should think when they hear the phrase "right to health care". Unfortunately, the left thinks is means the right to force someone else to pay for it.

[Rich]

Mike, I basically agree. Gotta ask, though, does your argument generalize to "If I want X, and someone is willing to provide it, and we can agree on a price, no third party should be able to stop it."? One might claim any "harmful-to-another" X invalidates it; but then we're back in the "what's magic about the health care finite-resource commodity/service" realm. "There must be some kinda way outta here ..."

[robc]

Rich,

Health care is exactly like every other good and/or service.

[Tomcat1066]

John: Where in the hell do you get the idea that I support government involvement in health care. No, if you are free in Great Britian to get treatment at your own expense, then it's NOT rationing.

However, their healthcare system is still fucked up because the government is involved and is fucking up anything approaching a free market. But it sure as shit ain't rationing.

[Simon]

One of the greatest falsehoods of pro-market ideology is that there is no such thing as economic coercion, only legal. While I don't support the arguments being made in favor of the current congressional and presidential push for health care reform, I also cannot fathom why Reason writers fail to acknowledge this critical point about power and instead naively assert that only government governs.

There really is, in effect, no difference between a bureaucrat telling you what you can have and the exigencies of the market preventing your getting it. In what sense is market pricing not a constraint on access? That's ALL it is! Furthermore, the fact that, legally, we all have a choice does not demand that that choice be actualized. For many in American society-I'm thinking mainly of the poor, whose poverty is considered acceptable according to market logic, indeed, necessary-this notion of choice is simply a fiction, and government is not the only power responsible for this state of affairs.

This is the Janus-face of libertarianism, Reason-magazine style: admirable criticism of government power coupled with total disregard for the power transmitted by the market or the coercive culture instantiated by the market.

The only possible explanation of this-and the endless libertarian insistence on government action as "distortion" or "corruption" of markets-is that market power is figured as a natural feature of human experience while other forms of power are not. Perhaps that is so (hint: it's not). But if it is, if the market were so ontologized, then the rationing Dalmia refers to as metaphorical is not metaphorical at all. It is a mechanism of control built into life. It is, in a sense, far more real than the bureaucrat's decree. The bureaucrat can be replaced, she can change her mind, the structure that empowers her can be replaced. But you can't beat nature, can you? And the definition does matter because rhetoric has a lot to do with policy outcomes.

A meaningful libertarian argument against government-controlled health care would argue that there is no human right to health care (perhaps, even, that there are no human rights); not that the status quo works or the infantile conceit that government coercion is bad while economic coercion doesn't exist. robc's statement "health care is exactly like every other good and/or service" is on the right track.

[Sean W. Malone]

Even if a single-payer system doesn't apply to everyone, there will be rationing, but only from the government half of the system, so for a little while, not everyone will be subject to it.

Imagine a different good in play here: If government decide they were going to provide an "option" where anyone who wanted can get all their food for "free", from a government bureau... Anyone who wants to buy their own food is of course more than welcome to keep supporting their local grocers.

Same deal. Government only gets X amount of food though and since there is no price-mechanism in play to help show the value that various individuals place on different items, bureaucrats will instead have to arbitrarily determine who gets what - if they're being "fair", then they'll probably simply divide everything up equally and give out the same amount to everyone participating in the system. That is rationing. Everyone agrees on that right?

So point is, so long as you're part of that system, you are experiencing rationing. But government is taking food out of the overall market, which is going to raise prices for everyone else (not factoring in the increase in taxation to pay for all of this stuff) and thus encourage even more people to be a part of the government system, regardless of whether or not it's operating more efficiently than the grocers you used to get food from.

In a small matter of time, rationing becomes everyone's problem except the very very rich who will always be able to work around it (but who are now paying excessively high taxes to pay for everyone else's food - or are committing "tax fraud" to avoid payment - while ALSO paying much higher costs than necessary for their own food).

But I think the point is, you can have both rationing and non-rationing at the same time as we do right now. All in all, every bit of this shit is bad, though.

[Sean W. Malone]

Simon...

I do hope you learn to understand what prices are and how they function.

Price Theory
Free Price Systems

Prices are in essence the opposite of rationing, entirely. And yes, we generally do argue that absent manipulation by government there can be no real coercion in market transactions - you can agree or disagree on a trade but no one gets to simply hold up a gun and take what they want. There is no inherent "market power", opportunities & companies come and go and succeed only by offering better value than their competition... that's it.

Government's purpose should be to stop the initiation of force, and not to contribute to it, but that's not really what the record of history shows.

But not being able to afford something isn't the same thing as coercion. I can't afford to retire at 26 but I'd love to be able to. Is that someone else's fault?

[John Thacker]

Where in the hell do you get the idea that I support government involvement in health care. No, if you are free in Great Britian to get treatment at your own expense, then it's NOT rationing.

Tomcat, where in my comment do I state that you support government involvement in health care? Please read my comment again; I don't see why you get that idea. I only state that by your definition, government health care, including that in the UK, is not rationing. It seems by your reply that I stated your position accurately.

I understand your position, but I think it's flawed. A system with sufficiently high taxes and regulation produces results indistinguishable from rationing. Reduce the taxes somewhat, and there's still massive distortion close to what rationing would produce. Is there a point where it suddenly isn't rationing? I agree that unless you take your absolutist position, there's a problem akin to the paradox of the heap.

OTOH, if you take your position, then rationing of health care occurs nowhere in the world, which seems an even less useful definition. Even in Canada they turn a blind eye to health clinics, plus people can always go to the US or elsewhere to buy health care, so they still have a choice. Even beyond that, one could claim that the Soviet Union or WWII-era US didn't have rationing, since it was still possible for people to choose to purchase items on the black market, they simply accepted the possible penalty of being caught. To me, your argument reduces to an absurdity. Rationing becomes something that has never existed.

Your argument is that same argument that taxing something extremely heavily isn't the same thing as banning it. It isn't exactly, but it approaches it, and at some point it's practically indistinguishable.

For the type of anarchistic libertarians who thus rule out all taxation, squaring this circle is easy, but for others, we simply accept that things can be worse or better by degrees.

Prices are a means of efficient allocation through voluntary transactions. Rationing is a means of centrally planning allocation. Tax preferences and regulation tilt the balance towards rationing.

[Tulpa]

"Health insurance" is basically a pass for access to health care. It doesn't really work like any other kind of insurance that I know of in fact; indeed, it would be as if you bought auto insurance for known, regular maintenance check ups on your car, as well as flat tires, dings to the body, etc.

I hear this all the time and it is not true. You're comparing apples and oranges.

The reason your auto insurance doesn't pay for oil changes is because the damage that can result from not getting your oil changed will not itself be covered by auto insurance. ie, the insurance company doesn't care if your engine eventually seizes up, since they don't have to pay a dime if that happens.

Also note that auto insurers DO pay for minor things like windshield chip repair to prevent having to replace the entire windshield later on. This would be the analogy to use with respect to routine medical exams to detect small problems before they get worse (and thus more expensive).

[R C Dean]

One of the greatest falsehoods of pro-market ideology is that there is no such thing as economic coercion, only legal.

Since coercion is defined as the use or threat of force, I don't see how there can be "economic coercion," Simon.

There really is, in effect, no difference between a bureaucrat telling you what you can have and the exigencies of the market preventing your getting it.

Yes, there is. The "exigencies of the market" are a fancy way of saying you can't afford it, so you can't have it. I, for one, think there's a difference between the state telling you that you can't have X, and not being able to afford X.

[Simon]

Perhaps I should have been more precise in my terminology: it is less markets than capitalist culture that creates the relationships of power libertarians choose to ignore. True, in an ideal transactional scenario, there is no gun to anyone's head, but the processes of transaction are embedded in social life. They produce outcomes that severely limit the scope of choice, and may do so with much the same force as law. There is no law demanding that blacks in the United States be persistently poor, yet somehow economic opportunity seems to be unavailable to most of them. Sometimes this is a result of the knock-on effects of government actions, but it's also true that certain interests are invested in their poverty (developers, bail-bondsmen, loan sharks, and private security firms, for example) and some of these interests can operate in ways that ensure it persists. Additionally, slavish hewing to free market ideology ensures that the possibility of public support for the poor is very much reduced and, as poverty tends to beget poverty, social mobility is decreased, and the powerful remain in power.

And please, Sean, do not condescend to me about price theory. A theory is a theory. There are competing ideas, and your understanding of price mechanisms deserves no privilege. The inability to afford a good is a result of an economic system that makes it unaffordable to some individuals. A good you cannot have is effectively rationed in that it is reserved for others. It is deemed more valuable than other goods thereby preventing those whose abilities are not valued in society from accessing it. You are absolutely coerced by what others consider valuable labor. If this were not the case, you might not be doing your job, and I sure as hell would not be doing mine.

In that regard, it is quite clearly someone else's fault that you can't retire at 26, just as it is someone else's fault that single mothers are typically poor. If we valued certain kinds of production differently or, better still, didn't value people according to production, you might not be forced to work fifty more years/on a task you don't necessarily enjoy. Similarly, others might not be punished economically for their unorthodox kinship or for being something other than a white male.

(In regard to that last point about being a white male, I realize it's hard to come up with convincing explanations for income disparity among majority and minority or otherwise marginalized groups, but the studies on differential earning power are unequivocal-some kinds of people are consistently less valued in the economy, and this is true of every capitalist economy, though not necessarily in regard to the same kinds of people everywhere.)

To say, as some do, that prices are a matter of allocation of resources through voluntary transaction whereas rationing is a matter of some few people's explicit decisions ignores how many people are systematically shut out from that supposedly voluntary process. Shut out because others have decided their activity is not valuable. Therefore, prices can be seen as method of providing selective access to goods based on a majority perspective on what constitutes a socially valuable way of life. As I see it, this is a form of rationing in that it preferentially distributes goods according someone else's perspective on who deserves said goods. The fact that that "someone" is a member of an overwhelming majority should give no comfort to a libertarian.

Ultimately, society will always find a way to organize distribution of goods, and I prefer prices to bureaucratic fiat, but we shouldn't pretend that market-determined value does not represent a set of contingent, if widely distributed, judgments, often arbitrary (why doesn't the single mom get paid to raise her kid?) or justified on the basis of self-perpetuation (we need to value certain work so as to produce more wealth, which is itself a function of arbitrarily determined value).

[Simon]

R C Dean-the state telling you you can't have it as arbitrary as the market telling you can't (because you can't afford it). It is a function of a group of people deciding you are unworthy.

[Twisted Nerve]

Simon, in your version of the world, where does the food, clothing, building materials, electricity, medical care, etc come from?
Do they spring from the forehad of the state?
If I read you right, people in this version of the world are unjustly coerced into labor in exchange for all these things. If you advocate freeing us from that coercion, who will produce those things? Or are you just pulling my leg?

[Luccia]

Rationing is a straw man. We already have health care rationing. If one can afford the most costly health insurance, one can get treatment and care when needed without restrictions. If one's insurer won't allow one to see a doctor, a specialist, or to have a test performed immediately, and one can afford to pay for it, one can get tests scheduled without delay.

But, if the average person with average insurance needs a costly test or treatment, or their need for such a test or treatment can only be met after waiting up to a month for an appointment, and they cannot afford to pay for an earlier appointment, then what is this but rationing of health care?

What of the uninsured without the funds to pay for necessary care and treatment? Is health care for them not rationed out at the ER when their illness or injury forces them to seek care and treatment?

In the U.S., the private health insurers routinely make medical decisions based upon their costs and not upon medical requirements. These non-physicians ration our health care to us and expect us to pay ever-higher premiums for ever-poorer health care.

If the federal government acts as the insurer of last resort, or even insurer of first choice, the economies of scale will clearly compel the current rationing authorities, the private insurers, to review their very healthy profit margins and discover that premiums can indeed go down.

I'm surprised that so-called "supporters of the free market," aren't welcoming any change that allows real free market forces to come into play instead of whining to continue a status quo that allows a cartel of non-doctors to ration health care in this country.

[Twisted Nerve]

Simon -"the state telling you you can't have it as arbitrary as the market telling you can't (because you can't afford it). It is a function of a group of people deciding you are unworthy."

Case 1 - THe state tells my I cant have a second hamburger for dinner. My only option is to operate outside the state (break the law) if I really wnat that hamburger. Results if caught are bad. See: controlled substances.

Case 2- the Market tells my I cant have a second hamburger for dinner if I cant pay for it.
My options inlcude among millions of others: picking up cans of the side of the road, mowing lawns, telemarketing, cleaning houses, etc, to get more money to pay for the burger.
I get my hamburger, the market gets paid, and someone gets a cleaner roadside, mowed yard, new magazine subscription, or clean house in on the bargain.

Luccia, the same appies to your presentation, though obviously more cans are involved.

[Seward]

Tulpa,

I agree; they are apples and oranges. Health insurance doesn't really look like any other kind of insurance. 😉

[Seward]

Luccia,

No "real market forces" will come into play with a government as an insurer of last resort; what will occur is what public choice theory illustrates - lots of rent seeking, special interest pleading, wasteful public lotteries, corruption, etc.

If you want "real market forces" to actually exist, then my goodness, create a level playing field across a whole spectrum of policy issues, instead of rewarding entities (as we do today) via their political clout.

[John Thacker]

In the U.S., the private health insurers routinely make medical decisions based upon their costs and not upon medical requirements. These non-physicians ration our health care to us and expect us to pay ever-higher premiums for ever-poorer health care.

Luccia, first, they expect us to pay ever-higher premiums for ever more technologically rich and expensive health care. Please explain to me how health care is "ever-poorer." As someone whose mother works as a pediatric bone marrow transplant nurse, I can't believe that. Especially not since I've seen the procedure go from something experimental that no insurance company would pay for to something that most companies routinely cover. The only way I can possibly understand that is if you're including all sorts of self-controlled issues (like being overweight and not exercising) in our health care system.

Second, how do you separate "costs" from "medical requirements?" In countries with national health care, non-doctors and doctors certainly veto effective health care on the basis of it costing too much. It certainly happens under NICE in the UK. Perhaps you think that the government boards will make better decisions, but please don't pretend that costs wouldn't be balanced with "medical requirements" under any government system.

[Simon]

Twisted Nerve-
It is true, of course, that the market does not punish you in the same way states do, and that's partially why, at the end of the day, I prefer pricing to bureaucratic fiat. But your example is a trivial one that ignores the social embeddedness of markets and the larger point that the requirement that one work in a certain capacity reflects the imposition of someone's, possibly someone else's, values.

As to your previous question about who provides goods, I will first turn the question back to you, seeing as in the world of coerced labor-that is, the world of today and every day before-huge swaths of people have gone without them.

In my case, I can't say I know for sure where the goods would come from, though, of course, necessary goods existed before capitalism so it's hardly unimaginable that other forms of economic organization could emerge. What I'm saying is that it's possible to assign value differently than we currently do, so this could mean individually spending money differently, or it could mean providing money for different kinds of labor. It could mean that our priorities are realigned so that some people who are now paid a great deal are instead paid less, and those paid little are paid more. It could mean the elimination of money altogether. It could mean the elimination, by advanced computerization and roboticization, of any sense of "economy." It could mean a collective determination that a certain amount of consumption is "enough." But I'm not suggesting a plan here, I'm only pointing out that the way we assign value is neither permanent nor independent of social context (so when I say "economic coercion," what I mean is something more along the lines of imposition of values-laden social norms through economic means), and that the way we assign value structures people's lives (and, without getting too social-theory-mumbo-jumbo, identities) and not necessarily with their consent.

I should also add that my point is not really about justice, though it can slip into matters of justice, particularly when we pretend we're talking about bizarre, idealized hypotheticals rather than real lives. My point is mainly about recognizing that power is transmitted in economic practice. It is up to you to decide whether this is a problem, but we should appreciate that power relations exist in economic transactions because those transactions cannot be divorced from the society in which they occur. So, to get back to the original argument, I think the market ideologue's claim that pricing is qualitatively different from rationing is disingenuous because both are attempts to direct labor in what are deemed socially useful (but often arbitrary) directions and both the state and the economy have the power to punish and proscribe the scope of people's lives.

[strech]

Instead, we have a company that refuses to pay for a treatment and that's it. You're still able to go and seek that treatment at your own expense. I don't care how you try and cut it, that's not rationing. There is no restriction, there is simply a third party who is saying they won't cover that.

The problem here is two different meanings of rationing. In one, the private market does do rationing:

Prices ration scarce resources. If bread were free, a huge quantity of it would be demanded. Because the resources used to produce bread are scarce, the actual amount of bread has to be rationed among its potential users. Not everyone can have all the bread that they could possibly want. The bread must be rationed somehow; the price system accomplishes this in the following way: Everyone who is willing to pay the equilibrium price gets the good, and everyone who does not, does not. (Microeconomics, Katz and Rosen)

And in this case, a government plan with a limited cash resource will choose who gets these benefits. Under this definition, both the private markets and the government plans proposed will ration.

In the other, from Ronald Bailey's paragraph:

Imperfect as private health insurance markets are, if a customer 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.

You only get things from one source and are prevented from getting it elsewhere. The private market won't do this, but neither will any government plan proposed by any member of Congress, even the Single Payer one proposed by the actual Socialist (Jeffords) .

The most the plan will do is offer a public plan. Even if said plan out-competes all direct competitors for the non-rich, I haven't seen any indication of removing supplement plans (like there are for Medicare), which wouldn't compete with the government plan and would stick around. Bailey proposes some mystical force that will cause all non-governmental healthcare to be inevitably outlawed, a situation that has somehow not occurred in any other country with the arguable exception of Canada and has no evidence to support it.

Single Payer is clearly a terrible idea, but it's not what is being proposed by the administration and would never pass, and even it doesn't represent what you're fighting against here.

I'm not sure any government plan is a good idea[1] - once the government has an fiscal interest in some activity of yours, it's proven perfectly happy to tell you what and how to do it, and health will interest it in everything - but at least accurately portray what you're fighting against instead of setting up a bizarre strawman.

[1] The main problem being, private healthcare is a terrible idea too, given that a significant portion of is either perfectly inelastic or very close to it when it's charged on a treatment basis.

[Twisted Nerve]

Simon, I'm curious what aspect of the "social embeddedness of markets" do I ignore? Apply that reasoning to the difference between indivuduals making the decision to act in the market of their own free will vs being directed by the "collecetive" to participate via force. Granted, nobody is truly a free actor, being subject to presures of society,family, getnetics, etc. But lets not let the perfect be the enemy of the good. The difference between the two methods are vast.

[Rich]

> Health care is exactly like every other good and/or service.

What I'm trying to understand is the distorting (emotional) factor of so many people considering treatment both a "right" and a (finitely-resourced) service. Suppose, the country has only one voting place, one that can handle X voters an hour. The dynamic will probably be different than the analogous case of, say, one ice cream stand. Which is more/exactly like health care?

[plastic surgery abroad]

NIce discussion!

[cosmetic surgery poland]

Very nice article and informative discussion. Thank you all!

[Wayne Campbell]

Healthy Performance specialise and are passionate about Employee Health and Wellbeing. We are a 'one stop provider' with our flexible portfolio of services including onsite Employee Health Screening

[Health Screening]

Healthy Performance specialise and are passionate about Employee Health and Wellbeing. We are a 'one stop provider' with our flexible portfolio of services including onsite Employee Health Screening, Health Promotion Events, Educational Workshops, Organisational Stress/Wellbeing Audits, Workstation Assessments and various other related services.

[Health Screening]

Great article

[Health Screening]

Healthy Performance specialise and are passionate about Employee Health and Wellbeing. We are a 'one stop provider' with our flexible portfolio of services including onsite Employee Health Screening

[freedom healthnet]

Rationing?? where exactly it is?? Prices are in essence the opposite of rationing!