The news of private hospital ‘cornering’ 50% of the supply that has been sold in private market will lead to its share of outrage. The news heading is likely to be typically misleading, of 9 private hospitals cornering 50% of the doses, giving impression that out of total supply of vaccines 50% went to these 9 entities. The 50% is of total supply made to private hospitals.
I do not find any surprise here. Vaccine makers will prefer
large orders over bunch of small orders. It is likely that there will be distributing
intermediaries between vaccine manufacturers and entities which conduct the vaccination
to provide required large orders. Presence of intermediaries reduce profit of
manufacturer as well as end of chain vaccinator. Large private hospital chains can
bypass the intermediaries or provide the required large scale if there are no
intermediaries. I am in fact surprised that nearly 50% of private market
vaccine supply has gone to other than large players. It shows that even large
private healthcare providers do not see themselves as reaching to half of the
eager demand for vaccination, perhaps mainly due to mainly metropolitan
presence with capacity constraint at any vaccination site.
Some of us are even outraged at thriving private supply of
vaccination, when government supply of vaccination has been patchy at best and
dry at worst. And there is clearly an emotional basis to be outraged. At
government sites, there are queues and uncertainty. At private sites, there are
assured dose and ease of access. If one is prone to outrage, it is a
tailor-made situation for outrage. I am sure that most of these outrage guys
will be happy to have their jab when their employer or neighborhood institution
arranges for them to be vaccinated (may be with family members) and will not be
torn by betrayal of their outrage by their own actions.
I am also outraged, but at my past choices which have made me
stay in a place where vaccines are not easily available, in public or private
mode. I am not at all outraged at private vaccination sites. Considering the
price incentive offered to vaccine manufacturers, they would like to ensure a
good steady supply to private vaccinators. It perhaps shows the nuisance value
of government that vaccine manufacturers have not started supplying large chunk
of their supply to private vaccinators. Government supplied vaccination still seems
to be outstripping private one.
I am happy that private vaccination sites are vaccinating a
key section of society. It is a section which is perhaps keenest to go back to
their lives and that will lead to lot of travel and mingling with other
individuals from same class, with occasional brush to those who are not part of
this group. Yes, along with this keenest section there is perhaps another
section at private vaccinating site, the highly risk averse one. If there is
going to be next wave or surge or tide, it is highly likely to be led by this
keenest and rich enough section which is getting vaccinated at private sites.
Having them vaccinated is going to lower the chance of next bad phase for all
of us. The same line of thinking that makes vaccinating a section of workforce
on priority a sensible decision makes privately supplied vaccination a sensible
decision.
There is also an economic angle to it. If there is a section of society which has vaccine eagerness and considerable ability to pay, there is no reason why they should be given free vaccines. But when suppliers are allowed to price discriminate between section of consumers and consumers self-select the prices at which they will buy, it becomes the case that consumers buying in lower price category face certain decline in quality. There are numerous examples. Economy class will have cramped leg-space. Neglecting a moderate non-valid ticket holders crowding in non-AC sleeper coach allows Railways to get better demand for AC coaches. In other words, higher prices for better experience can turn ineffective if lower prices offer decent experience.
Scarcity and limited capacity induced not so pleasant experience
at government vaccination centers is the key factor which generates demand for better
experience by those who think that they should have it and can afford it. Even if
government would not have allowed price discrimination, eager and privileged
ones would have formed an extra-system channel to get their vaccination without
queues and hassle. Price discrimination based transparent disparity is better
than opaque disparity based on greasing the required parts.