• Rationing relativity

    Some people interpret lower Medicare prices (paid to providers) as rationing. That’s not an indefensible position.

    However we can only measure the extent to which Medicare prices are lowered relative to something else, like private prices. That also means that for fixed Medicare prices, higher private prices leads to rationing.

    So, what’s the source of rationing, Medicare or commercial market prices? Answer: both.

    I will just point out that in an all-payer system this distinction goes away. Still, I doubt charges of “rationing” ever will. A system completely free of it in every sense does not exist.

    Closing question to ponder: Suppose you want to buy my car from me for $10,000. I tell you the price is $12,000, firm. Am I rationing or are you?

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