Wednesday, July 3, 2013

Unpacking The Meaning Of ‘Rationing’: A Response To Dowd And Allison – Health Affairs Blog

The Dowd and Allison article appeared in Health Affairs,  and fortunately Uwe Reinhardt has analyzed it in a reality-based context. An excerpt:

The view that private markets — whether or not perfectly competitive — ration goods and services in scarce supply apparently is not shared by Dowd and Allison when they write:

“…rationing involves limits on consumption that are (1) set by someone other than the consumer (such as the supplier) with (2) the intent of limiting choices that some consumers otherwise would be willing and able to make.”

So according to Dowd and Allison, rationing occurs only when limits are placed upon choices that some potential buyer of a good or service would otherwise be willing and able to make, and I emphasize here the words “and able.”

For example, if for some reason government intervened in a reasonably price competitive market for some health care good or service that is in limited supply — e.g., a vaccine — to allocate that scare item to members of society on the basis of some criterion other than price and the recipients’ ability to pay, it would be rationing. On the other hand, if that limited supply were allocated among members of society on the basis of price and ability to pay, and on that basis individuals were denied access to that good or service, that might possibly be an “economic injustice”, but it would not be rationing.

Dowd and Allison certainly are free to posit this as their definition of rationing. They should not assume, however, that their definition is universally shared, even among economists, nor should they assume that in the debate on health policy the more expansive definition of rationing, including price-rationing, is abusive.

Unpacking The Meaning Of ‘Rationing’: A Response To Dowd And Allison – Health Affairs Blog

Sphere: Related Content

No comments: