Health Care: Who Gets to Ration?

A recurring charge against health care reform is that it will lead to the rationing of services. Recent news has given us two such alleged examples of rationing. One is the report on mammograms from the United States Preventive Services Task Force, recommending that the test not be used for women in their 40s. Senator Kay Bailey Hutchinson recently warned that reports such as this would become the basis for decisions about what services women receive through the public option, which she described as rationing. Another example is the H1N1 flu vaccine, which is not being distributed to those 65 and older.

However, these critics have this all wrong, according to this New York Times writer, who says that we ration health care services all the time:

In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources. Even in the United States, the richest society in human history, we are constantly rationing. We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon. … Health care, I realize, seems as if it should be different. But it isn’t. Already, we cannot afford every form of medical care that we might like. So we ration.

But this writer misses the whole point. Indeed, the “rationing” he describes does occur now through the cumulative choices of consumers, health care providers, and insurers in the free market. Except in this context, the word rationing is a misnomer. When scarce resources are allocated through economic decision-making, we call that the free market. When they are distributed by a government bureaucrat, that is rationing. The writer, however, clearly believes the government would do a better job of scarce resource allocation than the market. Perhaps he needs a refresher course in how markets work.

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