Uncertainty and the Welfare Economics of Medical Care: An Austrian Rebuttal-Part 3
Abstract
Part 3 concludes the rebuttal to the argument that health care is special and that markets
cannot properly distribute health care. Part 1 was a general discussion of the argument made
by Kenneth Arrow. Part 2 focused on the problem of asymmetric information in health care.
Part 3 considers the argument that health care is a human right and concludes that it is not.
All aspects of health care are composed of scarce resources which cannot be supplied in
unlimited quantity upon demand. The belief that health care is a right leads to subsidies which
distort the price structure in health care. Rising costs and increasing unaffordability are the
inevitable consequences of these subsidies. A health care right becomes an insatiable demand;
spending on other aspects of life is crowded out leading to a declining standard of living for
those paying for health care. The assumption that health care is a right causes competitive
innovation to be replaced by rent seeking behavior particularly the grant of subsidies for very
expensive treatments with low benefits.
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