The Ice Floes Are Crowded

There’s one piece of persistent dishonesty in the debate over health care that I would like to see vanish once and for all. It concerns the word ‘rationing’. You can use it in several ways. On the one hand, it can refer to any process that determines who gets some scarce commodity. Here’s an econ textbook quoted by Uwe Reinhardt:

“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. [Italics added.]”

If that’s what rationing means, then health care is already rationed, since it is not free. Moreover, since no one is proposing that it become free, everyone agrees that it should be rationed somehow.

When some people talk about rationing, they mean something scarier: the idea that someone, possibly the government, allocates quantities of something, and forbids anyone to obtain more of it. Thus, if the government rations gasoline in wartime, you get your gas coupons, and you are not allowed to buy any more gasoline, period. (That’s why black markets are illegal.) Likewise, when reselling tickets is illegal, ticket vendors are, in this sense, rationing tickets.

No one — no one — is proposing to ration health care in this way. Not Barack Obama, not Bernie Sanders, no one. Every serious proposal I’m aware of would allow people to purchase whatever health care they want, so long as a doctor is willing to prescribe it. And not only that, they can purchase supplemental insurance, like those add-on plans for Medicare.

What proponents of a public plan are proposing is, well, a public health insurance plan that would compete against private plans. I assume that, just like every private plan I know of, the public plan would not cover literally anything a patient might take it into her head to want. It might not cover unproven therapies, for instance. It might not cover therapies whose benefits did not warrant their costs. If this sounds bad to you, try to imagine a really big cost and a really small benefit: a billion dollar treatment for hangnails that offered only the most minute advantage over bandaids and nail clippers. As long as the fact that this is not covered is disclosed in advance, I don’t see a problem with it.

Some people seem to think that decisions which are routinely made by insurers somehow become affronts to liberty when carried out by, say, Medicare. This is silly, but it’s not flat-out dishonest. The same cannot be said for the following move, from an op-ed by Charlotte Allen:

“Here’s a way for America to cut its spiraling healthcare costs: ice floes.

This idea isn’t mine. It’s President Obama’s. (…)

“Evidence-based medicine” (…) can be helpful to doctors in deciding what treatments would be best for their patients and maybe save them some money. But Obama and his healthcare supporters do not want to stop there. Their implicit proposal seems to want to turn comparative effectiveness research into the “rules” that Obama was talking about on ABC: one-size-fits-all procedures that physicians would have to follow at the risk of not being paid by the government. And the government would increasingly be the payer if Obama’s proposed “public option” health insurance crowds out, as it inevitably will, private health insurers forced to compete with a tax-subsidized government entity. A pacemaker for your otherwise tough-as-nails 99-year-old mother? Forget it, Mom, you die.”

Wrong. Let’s assume that a public plan passes. This would not necessarily crowd out other insurers:

“In many areas of American commerce, private and government programs comfortably co-exist. FHA insured loans and non-FHA loans, Social Security and private pensions, public and private universities–all have long thrived side by side. Each side of the divide has strengths and weaknesses, but in every case the public sector is providing something the private sector cannot: A backup that’s there if and when you need it; a benchmark for private providers; and a backstop to make sure costs don’t spin out of control.”

But just because I’m feeling generous, let’s assume that the public plan proves to be so popular that it does crowd out its competitors — that is, health insurance plans that aim to be people’s mainstay, as opposed to supplemental plans. And let’s further suppose that this government plan will not pay for a pacemaker for your 99 year old mother. Does that prevent her from getting one?

No. It doesn’t. Your mother might have a supplemental insurance plan that does cover for it. Or she could pay for a pacemaker herself. Unless we actually ban both private insurance and the private purchase of health care — and why anyone should find that a remotely likely prospect is a mystery, since we haven’t done anything of the kind with Medicare — your mother is perfectly free to buy herself a pacemaker. The government is no more preventing her from getting a pacemaker than it is preventing me from getting a Ferrari by not giving away free cars.

Ah, you might say, but medical care is expensive, and a lot more necessary than a Ferrari! If your mother doesn’t have supplemental insurance, and doesn’t have enough savings to spring for a pacemaker, it’s pretty cold to say: well, mom, you’re still free to buy one! If she can’t afford a pacemaker, and she needs one, you might as well be putting her on the ice floes.

Since I’m still feeling generous, I’ll play along with this, and agree to say that anyone who cannot get medical care at a price she can afford is being “deprived” of health care. But note what follows: the 47 million people who are presently uninsured are now being “deprived” of any non-emergency care that they cannot afford. And “non-emergency care”, here, includes managing their diabetes so that they don’t end up having their leg amputated, getting the antipsychotics they need to be sane, and getting HIV medication or chemotherapy. In short, it includes a lot of things that are pretty important.

If Obama’s plan counts as putting your mother on the ice floes by by failing to cover her pacemaker, then our present system counts as condemning a whole lot of people to an early death, or amputated limbs, or untreated psychosis. After all, even though the uninsured can purchase these things, they cannot afford to.

No one’s mother is going to be prevented from buying any medical care she needs, so long as a doctor is willing to provide it. No one’s mother is going to be prevented from buying supplemental insurance, if she thinks that her main policy, public or otherwise, is too stingy. We can, if we wish, describe people as “prevented” from getting medical care whenever they cannot afford to purchase it. But if we go that route, we have to recognize that a whole lot of people are “prevented” from getting medical care right now.

This is not a scary new development that Obama’s plan might unleash on us. For 47 million of us, it’s our life right now. And even if we assume the absolute worst remotely plausible scenario — private competitors to the public plan wither, the public plan sets its cost-benefit limits too low, etc. — the Obama plan could hardly be worse than the situation we have right now. At the very least decisions about what to cover would bear some relation to costs and benefits. Everyone would have their chronic diseases managed, their lifesaving operations covered, and so forth. Questions would arise about expensive treatments whose advantage over less expensive ones is unclear, or new therapies whose benefits are unproven, not about whether it’s a good idea to keep someone with high blood pressure on antihypertensives.

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