Statistics

The discussion at this otherwise-good Instapundit post is typical.

The discussion is misframed. The question isn’t whether a specific medical procedure is a good idea. The question is who gets to make the decisions.

This is a comment that I left on a recent Neo-Neocon post:

It’s the public-health fallacy, the confusion (perhaps willful, on the part of socialized-medicine proponents) between population outcomes and individual outcomes. Do you know how expensive that mammogram would be if every woman had one? The implication is that individuals should make decisions based on averages, the greatest good for the greatest number.
 
The better question is, who gets to decide. The more free the system, the more that individuals can weigh their own costs and benefits and make their own decisions. The more centralized the system, the more that one size must fit all — someone else makes your decisions for you according to his criteria rather than yours.
 
In a free system you can have fewer mammograms and save money or you can have more mammograms and reduce your risk. Choice. In a government system, someone like Kathleen Sebelius will make your decision for you, and probably not with your individual welfare as her main consideration.

Even in utilitarian terms — the greatest good for the greatest number — governmental monopolies only maximize economic welfare if the alternative system is unavoidably burdened with free-rider issues. This is why national defense is probably best handled as a governmental monopoly: on an individual basis people benefit as much if they don’t pay their share for the system as if they do. But medicine is not so burdened, because despite economic externalities under the current system (if I don’t pay for my treatment its cost will be shifted to paying customers) there is no reason why the market for insurance and medical services can’t work like any other market, since medical customers have strong individual incentive to get the best treatment and (in a well-designed pricing system) value for their money. The problems of the current medical system are mostly artifacts of third-party payment and over-regulation, and would diminish if we changed the system to put control over spending decisions back into the hands of patients. The current Democratic proposal is a move in the opposite direction.