Since policymakers began to respond to COVID-19 almost a year ago, their response has been marred by poor reactions, miscalculations, and hubris. Now that the vaccine rollout is plagued by the same problems, we should not be surprised, just disappointed.
Despite the problems inherent in central planning, we are turning to state governments to allocate and administer the COVID-19 vaccine. Rather than use the market, which we do to allocate most other scarce resources, experts and policymakers believe that this is too important and that they can easily determine who needs the COVID-19 vaccine and distribute it to them without problem. Frederick Hayek called this belief in the omniscience of policymakers a Fatal Conceit, and in this case that “fatal” is all too literal.
But there is no reason to accept that fate.
Rather than have government determine who should receive the vaccine, we should use the market—or at the very least not ban people from using it.
In the middle of January, we are experiencing the greatest number of deaths per day from COVID-19 so far. While most of the country’s hospitals are not being overrun like Milan last February, it is putting pressure on hospital capacity and healthcare providers, and should continue through flu season.
Against this backdrop, it seems unfathomable that across the country we struggle to actually get needles in arms. Only 16.5 million doses have been administered as of January 20, which is less than half of the total number of doses distributed to states. This is embarrassingly low. Even worse, we are discarding doses across the country. These are not isolated incidents; sadly, they are commonplace.
So why are we taking our time vaccinating people and throwing away vaccine doses as people continue to die and our economy slumps along? It’s simple. It is because we want to use government to allocate vaccines to those whom we deem the most deserving of getting them.
Officials in the Advisory Committee on Immunization Practices at the CDC voted on their recommendations for vaccine prioritization. In their decision-making process, preventing deaths from COVID was only 1 of the three considerations. They initially recommended to vaccinate “essential workers” before those age 65 and over, even though this prioritization would lead to more deaths because the likelihood of death increases exponentially with age. This decision was considered more equitable because of the ethnic and racial make-up of the essential workers and because they worked through the pandemic.
Predictably, a political fight ensued over this distribution priority. When we use the political process and government agencies to determine who should get vaccinated, interest groups vie with each other for priority. This pressure from outside the CDC forced them to change their recommendation and add the elderly to the same phase as essential workers. It is hard to imagine that the most effective method of distributing the limited supply of vaccines is through tweets and Washington Post op-eds.
State governors used the CDC’s recommendations to design their vaccine rollouts. Not only is it being determined by top-down decision-making at a remove from people’s particular needs and desires, but any deviation from those plans is treated as tantamount to treason.
In New York, governor Andrew Cuomo threatened any healthcare provider who vaccinates outside of the vaccine prioritization schedule with a million dollar fine and the revocation of his license to practice medicine.
Not to be outdone, California governor Gavin Newsom went even farther. More layers of government were added, including the state, county, and municipality having control over the vaccine distribution. Not only would any caught ignoring the state’s prioritization lose their licenses, the state would tarnish their reputations as well.
As if the concerns about who would get the vaccine didn’t cause enough chaos, states added to it with their logistical problems. States were caught flat footed even after months of warning that vaccine trials were moving forward and predictions that they would be ready around the end of 2020.
Even worse, New York state ignored their emergency vaccination plan using county health departments for Cuomo’s new plan which uses hospitals. These are the same hospitals that are being overwhelmed treating COVID patients. Our healthcare system has little spare capacity.
On the other hand, pharmacies have both distribution and vaccination experience. They are located in and near communities across the country. Each year we administer 150 million flu shots in 3 months, primarily through pharmacies. Private pharmacies have the experience, why not use it?
Because, as Governor Newsom said, “God forbid, making a buck or two on the backs of a vaccine.” Yet that is how we ensure nearly all other goods and services are brought to the market. We should allow pharmacies to buy the vaccine and sell them at a market price. We would see far less waste than we see now. Because they face a hard budget constraint, businesses need to waste as few doses as possible. They would also vaccinate as quickly as possible, unlike New York City, which did not vaccinate on holidays like Christmas and New Year’s Day.
Market prices can ration vaccines even while the supply is still low. The state governments try to distribute based on who they think should be protected first. Policymakers can make educated guesses about risk based on demographics, but people know their own risk level much better. This knowledge about who is most vulnerable is dispersed throughout society; it is not something that central planners at the state capitals can pull up in a spreadsheet. That is the beauty of the market: it uses prices to signal how much people value something, no debates or write-in campaigns required.
It is true that the market would not have allocated vaccines perfectly. But right now, we don’t need perfection, we need better. We cannot compare the market to an imaginary effective response, we need to compare it to our actual response. And our current response is atrocious. We are sacrificing getting shots into arms to meet some level of “fairness,” and sacrificing thousands each day in the process.
The vaccine distributions by the states have suffered from the predictable problems associated with central planning. Had we allowed markets—which work every day—to function, our vaccination rate would be much higher.
While we wasted time sacrificing speed and efficiency for what policymakers consider fairness, we still have time to harness the market and get vaccines to people who need them. The sooner we do that, the more lives we will save and the sooner we can resume our lives outside of the shadow of the pandemic.