“[In the last year] four drugs which could have benefited 16,000 people have been turned down outright and a further six which could have helped 4,000 more have been provisionally rejected.

“Just five drugs have been accepted – benefiting 8,500 people – says a damning report by the Rarer Cancers Forum. Drugs for rarer forms of cancer are often much more expensive than those for common tumours because pharmaceutical companies cannot make economies of scale.”

The methods by which we allocate those resources is critical to how much of those resources we will get. It is critical to remember that prices are not costs. As Thomas Sowell explains:

“Although it is cheaper to buy a pint of milk than to buy a quart of milk, nobody considers that to be lowering the price of milk. Although it is cheaper to buy a lower quality of all sorts of goods than to buy a higher quality, nobody thinks of that as lowering the price of either lower or higher quality goods.

“Yet, when it comes to medical care, there seems to be remarkably little attention paid to questions of both quantity and quality, in the rush to ‘bring down the cost of medical care.’”

Another way to think of this is that we could cap the price of healthcare at zero dollars and zero cents. The price of healthcare would then be zero dollars. Zero would not, however, be the cost. The cost in lives would be enormous, but in callous economic terms, dead people produce very little and thereby reducing healthcare prices to zero would have a huge economic cost.

This is why it’s rather pointless to say that the United States spends more on healthcare than other industrialized countries; other countries cap their expenditures. In many ways, it’s as absurd as saying “recreation is too expensive because Americans spend such a large amount or even such a large percentage of their income on recreation.”

Now that’s not to say the United States does it well either, our unique brand of corporatist medicine has left few winners outside of Wall Street. It’s just a government takeover isn’t the right solution, more competition is. For more on that subject, see my article on Singapore’s healthcare system.