There are arguments out there that say we need to cover everything for everyone; that it’s immoral to ration care. Each human life is priceless, and choosing not to pay for a service that could save or prolong a life is trying to put a price on something that is priceless. It violates the moral test of government:
The moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life; the sick, the needy and the handicapped.
Former U.S. Vice President Hubert Humphrey
I disagree. And having recently read The Road to Serfdom by Hayek, I’ll put it in his terms because he’s given the best explanation of the counter-argument.
If we spend all that money on healthcare and ignore all the other potential uses for that same money, we are making a huge spending decision without even being able to determine whether that money was put to its best use.
How about an example?
If a grandma has the choice to (1) spend $300,000 on cancer treatment that is likely to give her about two more months of life or (2) spend that same sum on 4 years of university tuition for her granddaughter who would not otherwise be able to afford university, what would she choose? Maybe some would choose to live two months longer, but I suspect most grandmothers would put a price on their own life by choosing a better use for that money.
I know–she’s getting to make the decision for herself, which is a very important difference. But I hope the principle is clear: Governments could choose to spend a huge portion of their limited resources on covering every single healthcare service for every single person, but that crowds out other virtuous options, such as school lunches for low-income kids, housing programs for the homeless, mental health treatment for incarcerated individuals, . . .
(Incidentally, in the context of the grandma’s decision, it seems better for the grandma herself to decide what’s best with the money, which is the same argument I have been giving all along that we should allow patients to bear directly some percentage of the cost differential between their various options.)
If we don’t let micro- and macro-considerations of the alternative uses of limited resources enter into our economic decisions, we are headed down the same road that all planned economies in the past have traveled.
Clear Thinking on Healthcare 