Healthcare and Rationing

Currently, many experts are denying the claim that a government run healthcare service would need to ration out care to patients. However, this impossible. Just like the free-market, which “rations” according to ability and willingness to pay, a government healthcare service does not have unlimited resources (although it may be well-funded), so it must also ration care to its clients. Therefore, the question is not whether there will be rationing, but how it will occur and who will guide it. In itself, this doesn’t show that free-market healthcare or government healthcare will be inherently better. But we can use the insights of public choice and standard theory to show that, at the least, we shouldn’t expect the government to outperform the market without extremely extenuating circumstances.

In particular, without real market entrepreneurs guiding the healthcare process, it seems unlikely that a dynamic system with ever-changing and improving medical technology would result. As Lachmann constantly emphasizes, the marketplace is a zone of incredibly dynamic and often unpredictable progress, guided by entrepreneurs who must interpret data and form expectations in accordance with their accumulated knowledge. Government, on the other hand, often seems to be in a sort of stasis, only changing at regular intervals and unbothered by the threat of competition.