Rationing

The flu vaccine is in short supply. When a shipment comes in, predictable but unintended things happen. Case in point, my local county health department was giving out flu shots yesterday. The usual rules apply--only those in high risk categories. They were given to those people on a first-come, first-served basis. So, the predictable, but unintended outcome was that you had a bunch of senior citizens and parents with babies camping out in the cold starting at 2:30am for a clinic that opened at 9.

Thankfully, someone opened the doors a little early to shorten the suffering.

So what is the appropriate way to ration this limited supply? Left to the market, the price of the vaccine would simply go up, but for a number of reasons (some good, some not) we have decided that it is unacceptable to do that. The alternative we seem to have chosen is to have people line up at 2:30am--and these are the high risk people.

The trouble is that even if you limit it just to the high risk people, you still have to ration the vaccine. There doesn't seem to be anything in place to identify the highest of the high risk patients. Without such a mechanism, there is no guarantee that the vaccine will really go to those who need it most ("need" being identified with vulnerability to the flu). Instead it goes to those most willing to stand in line at 2:30am. Apparently that is more acceptable.

Marginal Revolution discusses the vaccine shortage. This is a clear case of a market not working because it was not allowed to work from the get-go. How long will it take before people realize that this will happen again unless some meaningful changes are made?