By declaring medical care to be essentially a "collective good," Paul Krugman and others are saying that the state should take over the creation and distribution of the good and treat it as something that should be limited, but the limited distribution to be decided by the state. In other words, Krugman does give a back-door nod to the Law of Scarcity, but at the same time claims that medical care is a "special case" that should be guided by government regulators.
In reading the comments on yesterday's post, I am struck by the outright hostility by some to ANY kind of entrepreneurship in medical care. In other areas of the economy, entrepreneurs have managed to bring resources from lower-valued to higher-valued uses, but somehow, medical care is different. Not only do entrepreneurs artificially push up real costs, according to at least a couple of the people making comments, but their very presence in medical care is outright evil.
If medical innovations actually raise real costs, then I suspect that what these commenters are saying is that we need to go back to medical care that existed perhaps when I was a child, when we worried about polio, measles, whooping cough, malaria, rheumatic fever, mumps, and lots of other diseases. We should not have MRI's, arthroscopic surgery, (God forbid lasik surgery, given that people pay out-of-pocket for that), CAT-Scans and a host of other things that simply were not available when I was hospitalized in the 1950s.
Instead, we should have state-provided and state-driven care that is determined by panels of "experts" who apparently are more wise than anyone else. I'm sure that will create a wonderful state of care, and it will be cheaper. (Krugman happily called them "death panels" and recommended them highly -- using that term -- but now wants us to believe that only critics of KrugmanCare are using the term.)
In other words, if I read the commenters and Krugman correctly, we need more people to die sooner, or be crippled by disease and inadequate (but cheap) surgery techniques. And if anyone wishes to engage in medical entrepreneurship, well, that person should go to prison for life.