Broback's Blog

Serious Economists universally agree that some goods are better allocated via markets and others are better managed by state distribution. The distinction generally has to do with the nature of the good being considered. These attributes include things like excludability and rivalry. Public goods are generally regarded as items where state allocation is best suited.

Folk Economists also make a distinction between markets vs the state — and which goods are best for each, but the prejudices of the man-in-the-street typically lean toward a more emotional choice based on how “important” a good is. As the Economist said, “The traditional argument has been that health care is too important to leave to the market.”

For the economically uninformed, the fairness of an allocation based on something other than price, (apparently even if it reduces amount supplied) can have strong moral appeal. And in those cases where scarcity is recognized, distribution guided by benevolent experts can be extremely appealing.

The dedicated levelers can be frustrated by people who argue that they don’t like the idea that the same entity that runs the DMV, the post office, and healthcare.gov will be deciding what medical procedures are best for them.

State enthusiasts can employ a variety of clever techniques to make the case that government allocations rule. One approach is to assert that since you personally really like the reports Medicare offers, that Medicare is superior at reporting (Mind Projection Fallacy.) That could be taken a step further by claiming that since the reports are better, this one minor aspect is an indication that Medicare at-large is better at allocating services (Hasty Generalization Fallacy.) Toss in the Straw Man Fallacy for good measure and say your opponents claim that you “can’t trust government to do anything right” and those with market-leanings can generally be put at bay.

At least until they look at the data and focus on the outcomes of the essential Medicare deliverable — care.

Check out this new report just published in healthaffairs.org. In The Quality Of Care Delivered To Patients Within The Same Hospital Varies By Insurance Type, authors Spencer et al., find that “Medicare patients appeared particularly vulnerable to receiving inferior care.” and “We found that privately insured patients had lower risk-adjusted mortality rates than did Medicare enrollees for twelve out of fifteen quality measures examined.”

Your risk of death may go up, but hey, at least your survivors will find the reporting “clear, well-laid out, and fully informative.”