Unless you’ve been living under a rock, you know that there is currently a shortage of H1N1 flu vaccine, and that as a result receivers of the vaccine are being prioritized. High-risk groups, such as young children and health care workers, are getting it ahead of other groups. Even with this prioritization, clinics and phone lines are being overwhelmed by people looking for the vaccine, and shortages have canceled some planned clinics.
In a free market situation, when a resource is in short supply, the price of that good tends to goes up. Be it concert tickets, a PlayStation 3, a popular model car, jewelry, or what have you, the price rises until an equilibrium can be found. The higher price then encourages more production of that good, whereupon the price falls as it becomes more available. Thus, if we applied free market principles to the H1N1 vaccine, we shouldn’t be prioritizing vaccine recipients, or even worried about the shortage. We should simply let the market set the price for a vaccine. If the price is high enough, that will encourage more production, easing the shortage.
Of course, there are many, many things wrong with letting the market rule vaccine distribution, both from economic and public health standpoints. But I’m somewhat surprised that even those people who think that the best way to reform health care in this country is to make it 100% free market-driven aren’t suggesting this as a resolution to the shortage. It’s such an obvious application of free market principles, and one that has simple-to-understand analogs: would we create a priority list of consumers if there was a shortage of plasma TVs?
Perhaps this is evidence that for all the talk about free market health reform, health care is one of those areas where the “invisible hand” might not work so well?