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"These workarounds are necessary because the health care system doesn’t follow any rational rules of economics, where the customer should be king." The health c

by markvdb 10y ago

"These workarounds are necessary because the health care system doesn’t follow any rational rules of economics, where the customer should be king." The health care system how it's currently organised in the US _does_ follow rational rules of economics. It is very good at extracting value from the medical process. It's horribly bad at solving health issues, let alone efficiently.

fennecfoxen 10y ago
Indeed. The free market is only efficient if property rights exist and are enforced, transaction costs are low, and there are low barriers to entry. In the US we had the property rights done fairly well, the transaction costs were manageable (outside of emergencies where every second counts)... it was the barriers to entry that were a major pain, and no reform in recent memory has done anything but make those worse. Unless and until it becomes easier to start new businesses, hospitals, practices and careers in the medical-care profession, no one should expect the market to be functional.
- jeffdavis 10y ago
  You left out the biggest difference between what we have and a free market: third party payment. If the party paying is not the party demanding, it does not resemble a free market.
wyldfire 10y ago
> The health care system how it's currently organised in the US _does_ follow rational rules of economics. Really‽ If prices of service were disclosed in some sane way the market could reward the efficient providers. Instead it's shrouded in mystery and the providers hide behind the complexity of the agreements among the many insurance agencies. They're certainly able to figure it out once it's time to generate a bill. If there were healthcare providers that worked like my auto mechanic or plumber, it would be so much easier to work with. "sign here, not to exceed $150 for diagnosis, etc..." and then you discuss with the physician later, "Ok treatment option 1) these pills, $50 for your insurance, 2) amputation, $3000 for your insurance and BTW you satisfy your annual deductible, ..." It's not that they couldn't do that, it's just that there's little incentive for them to do it and none of the competition does it. And much of the time the diagnosis would reveal "Sir it's probably just a virus which means that we could spend tons more time and money diagnosing this and then just rule out tons of other things and end up with no treatment options anyways. If your symptoms don't go away in three weeks then come back."
- gleb 10y ago
  You misunderstand the grandparent post. He is saying that you don't get to change rules of economics. But you (in this case the government) does get to setup the rules of the marketplace. And it is this combination of basic economics and rules of the marketplace (in this case government hiding cross subsidies for Medicare) that results in the mess we are in. But the basic rules of supply, demand and self-interest are the same here as they are in the auto mechanic business and as they were in Soviet Union.

by markvdb 10y ago

fennecfoxen 10y ago

Indeed. The free market is only efficient if property rights exist and are enforced, transaction costs are low, and there are low barriers to entry. In the US we had the property rights done fairly well, the transaction costs were manageable (outside of emergencies where every second counts)... it was the barriers to entry that were a major pain, and no reform in recent memory has done anything but make those worse. Unless and until it becomes easier to start new businesses, hospitals, practices and careers in the medical-care profession, no one should expect the market to be functional.

jeffdavis 10y ago
You left out the biggest difference between what we have and a free market: third party payment. If the party paying is not the party demanding, it does not resemble a free market.

wyldfire 10y ago

> The health care system how it's currently organised in the US _does_ follow rational rules of economics. Really‽ If prices of service were disclosed in some sane way the market could reward the efficient providers. Instead it's shrouded in mystery and the providers hide behind the complexity of the agreements among the many insurance agencies. They're certainly able to figure it out once it's time to generate a bill. If there were healthcare providers that worked like my auto mechanic or plumber, it would be so much easier to work with. "sign here, not to exceed $150 for diagnosis, etc..." and then you discuss with the physician later, "Ok treatment option 1) these pills, $50 for your insurance, 2) amputation, $3000 for your insurance and BTW you satisfy your annual deductible, ..." It's not that they couldn't do that, it's just that there's little incentive for them to do it and none of the competition does it. And much of the time the diagnosis would reveal "Sir it's probably just a virus which means that we could spend tons more time and money diagnosing this and then just rule out tons of other things and end up with no treatment options anyways. If your symptoms don't go away in three weeks then come back."

gleb 10y ago
You misunderstand the grandparent post. He is saying that you don't get to change rules of economics. But you (in this case the government) does get to setup the rules of the marketplace. And it is this combination of basic economics and rules of the marketplace (in this case government hiding cross subsidies for Medicare) that results in the mess we are in. But the basic rules of supply, demand and self-interest are the same here as they are in the auto mechanic business and as they were in Soviet Union.