Friday, February 27, 2015

Rationing the MVNHS©

In response to yesterday's post on the apparent death-spiral of the Much Vaunted National Health System©, frequent (and valued) commenter John Fembup observed that this is not really news; in fact, Dr David Owens (former chief of the Service) noted the likely future 40 years ago:

"The National Health Service is a rationed service. There will never be a government or a country that has enough resources to meet all the demands any nation will make on a national health service."

That quote, by the way, comes from a report of the annual meeting of the National Academy of Sciences in DC in 1976.

It should come as no surprise to regular IB readers that what Dr Owens observed must, in fact, be the case. Almost 6 years ago, co-blogger Bob explained it in easily understandable economic terms:

"The economics of goods and services can be reduced to simple demand and supply. Health care is no different. It follows economic theory just like every other consumer good.At either extreme you have inelastic price curves and elastic curves. Most consumer items track a bell curve but some things are totally elastic or totally inelastic."

That is, health care is, in fact, a good and a service (depending on whether you're talking about a cast, or the orthopedist affixing it to your arm). Regardless, there is only so much of it at any given time (there's not an endless supply of cardiologists, for example). And folks who deliver health care expect to be paid for their services, as those who supply bandages and syringes expect to be paid for their products. How much we're willing to throw at a given patient then becomes an issue.

When the cost of health care is perceived to be free (as in a nationalized scheme), the demand is going to go up. But from where do the funds come to pay for unlimited services and supplies?

One could ask Venezuela about that, no?
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