• 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?

    • As you correctly point out rationing is a canard raised to confuse the issue. We do it all the time by price. Health care is no different we’ve been rationing implicitly for years.

      However the purchase of healthcare, particularly when life is threatened, is not a rational choice. What other consumer purchase costs twice the median and average income, has no warranty and in the case of most new cancer treatments has benefit of less than 6 months? Decisions like these, made without looking at cost benefit, are bankrupting us and the system.

      We need more honesty and transparency, seemingly not possible with a political issue in a consumer ad driven economy.

    • Rationing is just a politically loaded term for allocating scarce resources. That’s what a market system does – it rations goods and services. We ration cars, houses, food, football tickets, and other market goods and services according to price and the ability to pay.

      Healthcare is different only in its importance to us (we could die without it) and that markets don’t work well, due to asymmetric information, lack of competition, etc. But we still have to have a mechanism to make allocation decisions.

      As pointed out in another post on this site, we could lessen the issues by increasing supply, but the Republicans have blocked implementation of those aspects of the ACA.

    • People are much more comfortable with market rationing vs government rationing.

      I think the use of the word rationing is not the point. When people hear rationing, they think of someone far away telling me I cannot get what I want. I am not sure most people notice or understand that the market rations itself because they are the ones making the decision.

      To me, end of life care and emergency care is just like buying a plane ticket an hour before departure. In an emergency, you will do whatever it takes.