Why is there a shortage of flu vaccine?

Dr. Rangel offers one hypothesis:

Years ago there used to be several makers of flu vaccine but that number has fallen to just two. Why? These days the government buys and distributes most of the vaccine and it pays for it below cost. When profits from the vaccine dried up most of the other companies moved on and the two that were left produced only what they thought the nation would need based partly on how much the government usually purchases. Because the profit margin is so thin on vaccines, producing more than was needed would cost these companies millions. In a single payer system could this happen to other drugs? Do we want to find out?

Read his whole post on why national health insurance and single payer systems are bad ideas. Here is another juicy bit:

This problem of completely eliminating the free market would extend to the other sectors of the health care industry from testing to diagnostic equipment to innovative treatments and surgical techniques and on and on. Essentially what happens to an economic system when the government takes over and eliminates any free market is that the quantity and quality of goods and services in this industry goes down. Part of the reason is because competition and innovation are lost. The other part is that the single payer underpays in order to contain costs. Dr. Woolhandler doesn’t seem to understand that this happens when she was asked if rich and middle-class people would accept a single payer system.

Yes our medical care costs more, but that is for two reasons. First, our current mixed public/private system has a variety of screwy incentives. Second, we devote unprecedented amounts of time and money to patients in their last year of life.

Here is the clincher:

Actually waiting lists for medical care in countries with nationalized health care are on the average of six to seven hundred thousand and waits for elective surgery can last four years! Her solution like any other socialist responding to criticism of poor quality in nationalized health care is to raise funding, i.e. raise taxes. But how high? Tax rates in the UK are already among the highest in Europe and the NHS still suffers serious problems with quality and efficiency. Some European countries have tax rates as high as 60%. In these cases health care is not really “free”. It’s only free if you have little or no income, pay little to no taxes, and use a lot of health care services.



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