Discuss whether health care is a public or a private good.

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In economic terms, there is no question that health care is a private good.  People who are not thinking in economic terms may see it as a public good, but it does not meet the criteria for such a good.  In economic terms, a public good is one which has “nonrival consumption” and which cannot be withheld from people who do not pay for it.  This is not true of health care.

Someone might think that health care is a public good because it is often provided by the government.  The government provides health care for people on Medicare and Medicaid. “Obamacare” has made the government more involved in making sure that people get health care. However, this is not how a public good is defined in economic terms.

Instead, we need to look at the criteria for public goods. First of all, health care does not have “nonrival consumption.”  Nonrival consumption occurs when a person can consume a good or service without reducing the amount of that good or service that is available to others. This is not true of health care. If I have an appointment with my doctor, no one else can have an appointment at that time.  There are many times when a person might have to wait to see their doctor or to have a procedure done.  Thus, there is not nonrival consumption of health care. Secondly, it is possible to exclude people from getting health care if they do not pay for it. If a person does not pay for health care, a doctor can simply refuse to see them.  If you do not pay, the pharmacy does not have to give you medicine. 

In these ways, health care does not fit the definition of a public good. Therefore, in economic terms, it is a private good.

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