Are Healthcare Services Even Considered Product?

I'm beginning to think perhaps not - strange though it may seem. If healthcare isn't product, how can it even be classified...other than societal burden? First, a little context. Consider a post title which Don Boudreaux penned four years earlier, "Trade is to be judged only by how well it serves consumers". Already, hmm. Now, think of the imaginary scenario Boudreaux describes with a taxi driver which - fortunately - no one should have to be subjected to.

A taxi cab ride is reasonably well defined as service product - in part because the specified outcome (i.e. destination) is perfectly understandable. Whether or not one may expect to be "rerouted" while seeking healthcare assistance is quite another matter. Even though reroutes can be lousy, people shrug and accept them - if only because the service is at least preferable to undue fears, regarding the destination. That's why special interests found it all too easy, to cash in on fears re the "ride" of illness and its uncertainties. Those fears played a large role in today's knowledge use capture - hence strict limits on the right to heal.

Some healthcare outcomes aren't easy to comprehend - either for provider or recipient. Perhaps for this reason, the idea of healthcare as product is so murky, that few still think of it as a normal marketplace choice. There's just one problem. When healthcare is defined as service obligation, that cuts into economic dynamism. For instance, healthcare is a major contributor to the growing desire of nations to close their borders to immigrants.

Recently a post from Tyler Cowen provided an example of the perceived non-product nature of healthcare. Tyler was enthused about the spread of Christianity in China, and here is a quote from the article he highlighted:

In the 1980s the faith grew most quickly in the countryside, stimulated by the collapse of local health care and a belief that Christianity could heal instead.

Wait, what? In the midst of Cowen's enthusiasm over the article, the mention of the collapse of local healthcare was an aside which felt quite jarring. For one, is "progress" really to be measured by factors which include lost local economic activity - even that which is unfortunately provided by government? And while spirituality has a valuable role in healing (particular as individuals age), the context of the quote felt altogether wrong on a number of levels. What happened in China - while it may have been amended to some degree - serves as a reminder of the lack of healthcare in the rural U.S. as well.

How might people respond, if healthcare became a market with both freedom of choice and participation? Many free marketers tend to bypass the idea of a open market in healthcare as if it were a taboo subject. Under these circumstance, it is difficult to shift the idea of healthcare to a wide marketplace of choice. Even if the aspect of choice comes up, the typical response is that a sick person is generally in no position to be shopping around for doctors.

But that is not the point. Given the chance, not everyone wants to approach surgeries and medications in the same ways. Yet this fact gets glossed over. To be sure, healthcare needs to be humane and moral. But in the face of strict limitations on knowledge use, morality has now extended to attempts to force the few to serve the many - as if it were actually possible to do so.

So long as healthcare and other vital services remain on the fiscal side of the ledger, some of the most important product in the marketplace will continue to be perceived as a societal burden - even if unconsciously so. As Don Boudreaux said, "Trade is to be judged only by how well it serves consumers". So long as limitations on knowledge use remain intact, healthcare can scarcely be fulfilled in the natural course of human trade.

Limits in services formation not only limit knowledge use, but also the longevity of populations. What's more, the fiscal nature of services too often means unnecessary austerity, should other forms of production decline. In a recent post from Paul Krugman, "Why don't we see more macroeconomic populism", he asks:

Why, in a time of deflationary pressure, have calls for belt tightening dominated the political scene? I actually don't know, although I continue to think about it. But it is a puzzle worth pondering. 

When needed services growth is perceived all around as little more than societal burden...why indeed.