Health care rationing

In a recent op-ed piece in the WSJ, Martin Feldstein criticized the Democratic health care reform plan for supposedly "rationing" service. As I noted in an earlier post, rationing is unavoidable whenever wants are unlimited while resources are finite. The question is how health care should be rationed, by government using the criterion of effectiveness, or by "the market" on the basis of willingness or ability to pay. Over at the Economist, Free Exchange critique's Feldstein's argument in more detail (via Mark Thoma).



The nub of the matter is this—government can afford to provide basic coverage to everyone, but it can't afford to provide every treatment everyone may want to everyone who wants it. It must therefore decide how to limit its expenses, and it can leave open the option of using a private practitioner to those who are denied care based on a cost-benefit analysis. Or government can provide coverage to no one, and those who cannot afford a treatment—effective or not—will go without. Those people will be just as fine as they'd be with treatment in some cases, they'll suffer in others, and occasionally they'll die because they couldn't afford coverage.



That's the nub of it, really. Faced with the prospect of a plan that provides effective treatments to everyone but forces people who want relatively ineffective treatments to pay for them on the private market, Mr Feldstein says he'd prefer a system where people who are unable to afford effective treatments don't get them, calling concern for those unable to pay for treatments "misplaced egalitarianism".



It's all well and good to let the market allocate televisions. Many people live happy lives without televisions, and lack of a television hasn't ever killed anyone. Attempting to provide a basic level of access to television to every American would be misplaced egalitarianism. I would have thought Mr Feldstein could understand the ways in which the market for televisions is different from that for health insurance.



I was intrigued by another implication of Feldstein's argument. He seemed to suggest that any procedure the government might use to reduce costs of public health programs (Medicare, Medicaid, VA) was "rationing" reflecting "misplaced egalitarianism" which is to be opposed. So what would he do about the long run fiscal deficits driven by the government's health care spending? Ignore it and let the government drown in debt, or eliminate the programs and let people die for lack of health care?