H1N1 Your Public Option at Work

You will probably get Swine Flu H1N1) this year.  You, or your children, might even die of it. You didn’t have to get it, there is an effective vaccine, but you probably won’t get it until it is too late.

You might have a newspaper article based on a Center for Disease Control press release blaming the delay on slow growth of the virus in eggs, but the real reason is government interference in the free market.

Short link  http://wp.me/paM4C-dX

To understand why that is the case, it is first necessary to understand how the annual, seasonal flu vaccine shows up at your corner drug store every year, on time and at a reasonable cost.

Each year, at the end of the flu season, epidemiologists at the Center for Disease Control (CDC) and the World Health Organization (WHO)make an educated guess on which of the many strains of flu will be predominant in the next flu season.  It’s different every year. They are actually pretty good at that, and most years, the mix of strains they predict proves to be correct.

Acting on those recommendations, manufacturers begin the six month process of growing those strains in eggs and then preparing vaccines for shipment in the early fall. Major drug store chains order vaccine directly from the manufacturers, your family doctor and smaller clinics place orders through any number of competing pharmaceutical distributors. As with any purchase of a limited product, paying a higher price brings priority in delivery. Since US distributors can pay top dollar, our vaccines are typically available on time, every year.

When Swine Flu appeared last year, epidemiologists knew it would pose a major problem because it has been so long since a swine flu epidemic arose (1976) that few people have a resistance to it.  Because they knew it was going to be a pandemic this year, it was decided it was too important to leave to the private sector. (If you have read Libertarian blogs before, you know this isn’t going to turn out well.)

Instead of leaving distribution to the private sector according to supply and demand, the WHO would allocate the supply by country based on predicted need. The US was allocated 10% of the total production.  The H1N1 vaccine was not to be sold at whatever the market would bear, instead it was to be priced by country on a sliding scale of $2.50 to $20 per dose based on ability to pay.

Further, the WHO asked wealthy countries to donate part of their allotment to poorer countries who could not afford even the $2.50 price. The Obama administration obliged by donating 10% of the already limited US allotment to the WHO for distribution as it sees fit.

Within the US, the CDC contracted with a single distributor, McKesson Specialties, for a monopoly on distributing the vaccine. Your doctor or pharmacy cannot order directly from McKesson, or pay what the market will bear for it to insure a prompt supply. The CDC allocates the supply by state based on population, without regard for which States are affected early and which are not. Within the States, orders must be placed through the State Dept. of Health, through an expansion of the  CDC’s school vaccination program which provides the usual vaccines required for school children.

However, this program was never designed for something like a pandemic. The number of children who will need to e be vaccinated for Polio or Mumps is easily predictable even years in advance, and need not be responsive to outbreaks as they are, by intent, prevention of known, largely dormant, diseases. As a result, only about half the H1N1 vaccine delivered by manufacturers has been shipped, and often it is shipped to those localities which need it less, like Miami and Las Vegas, which have excess supplies, simply because their bureaucracies were marginally more efficient in processing the orders.

The H1N1 vaccine is distributed “free” and your doctor or pharmacy cannot move to the head of the line by paying more. They cannot charge you for the vaccine, only a limited fee for administration.  Local and State Health Departments have almost dictatorial powers to allocate the vaccine within their domains. Thus, the vaccine is distributed based on a bureaucrat’s perception of fairness.  Below is an excerpt from an Email I received from a local city health department director:

I am a supporter of free market for economic matters. But the problem with something of this nature is that those with money are not necessarily those with greatest risk of complications. So those with money could get vaccine but it might not alter hospitalization, deaths or complications. Which is why it is free to be given first to those at greatest risk regardless of finances.

Because the delivered supply is limited, the CDC has established priority groups which should receive vaccine first and local health departments are directed to allocate supplies to those groups first. From the CDC web site:

pregnant women, people who live with or care for children younger than 6 months of age, health care and emergency medical services personnel with direct patient contact, children 6 months through 4 years of age, and children 5 through 18 years of age who have chronic medical conditions.

Health care personnel are on the list not because we (I am a dentist) are special, but because we come in close contact with so many people, and because the flu is so easily passed between people even with precautions like masks,  we are likely to be infected, and then pass the disease onto many others before we know we have the disease. Note that healthy school age children are NOT on the priority list. Yet, when I inquired into vaccine availability estimates for health care workers, that same Health Dept. director wrote the following:

We only had vaccine for EMTs. I assume that you wear a mask during procedures? As you know, we only received a third of our requests so we are targeting those with greater risks such as school children, pregnant women and immunocompromised. We are optimistic that we will receive more vaccine in Nov and can then open public clinics, which would be a good opportunity for you. Thanks for the inquiry.

So, EMT’s who happen to work for the city, but see perhaps 6 to 10 patients a day received priority over physicians, nurses, and of course, dentists, who see 20 to 40 patients a day. Healthy school children, who are not even on the list, will be vaccinated but even obstetricians and pediatricians who treat those who ARE on the list will wait. And there is nothing to be done about it. In a free market, such arbitrary mis-allocations can be overridden by simply writing a check.

I am not asserting that the CDC, or McKesson, or local or State Health Departments are particularly inept, but that this is the nature of government monopolies, and this is what we should expect from government intervention in the marketplace every time it occurs.

Had the government simply stayed out of the way, there would be adequate supply in the United States, and it would only have been necessary for the CDC to issue recommendations for priority, leaving it to health care providers to see to it that those who needed the vaccinations most got them first. Sure, some people would buy their way to the front of the line unjustly, but such misbehavior would be minor compared to the inherent cronyism and favoritism of unrestrained bureaucrats.

No government has ever equaled the marketplace for the efficient and equitable allocation of scarce resources. Libertarians know that, and the rest of the country will be seeing that play out as the H1N1 pandemic unnecessarily sweeps the nation.


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