"The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which are not done at all."
- John Maynard Keynes
The coronavirus has exposed the weaknesses in health systems across countries. Hospitals in New York are rationing ventilators, which comes down to doctors deciding who should be given a chance to live. In India, patients treated for Covid-19 in private hospitals have received bills running into lakhs of rupees. Health is one area where the market fails because doctors have more information than patients. When we take someone to a hospital, and if the doctors there say this person must be put into the ICU, instead of getting a second opinion, most people run to get that money. This is what economists call asymmetry of information. Healthcare costs can be prohibitive. Sudden health expense shocks can drain savings. Which is why many people believe that the only way to make healthcare affordable is to nationalise hospitals. Do economists have a better solution, though?
In this episode of Everyday Economics, Puja Mehra speaks with Dr. Ajay Shah to find out if nationalising private hospitals can make healthcare affordable.
Puja Mehra is a Delhi-based journalist and the author of The Lost Decade 2008-18: How the India Growth Story Devolved into Growth Without a Story.