6 ms·

So I don't think one can generically fault "regulation" for a poorly performing health market in the US. You're absolutely right, however, I do think the worst

So I don't think one can generically fault "regulation" for a poorly performing health market in the US. You're absolutely right, however, I do think the worst parts of our medical system exist as consequences of regulation. The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill. The licencing system isn't optimal for cost effective care. There's a lot to be desired for people who favor supply side solutions to expensive problems.

dv_dt 9y ago
> The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill. I don't think that's onerous, I think that is a minimal, and admittedly imperfect, expression of our societal intent that people shouldn't die unnecessarily in emergency rooms - either from lack of being able to pay; nor from a practical standpoint, lack or delay of on-hand proof of ability to pay. Removing those regulations would cause all sorts of other problems. Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted. Even more profitable, if I judge that person as having a well connected social network, I can charge even more because I know their friends and colleagues would chip in to save them... I'm not sure how a competitive market with no regulation changes the worst case for this transaction - if someone is near death then moving on to another emergency room is out of the question. I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy). Insurace with a shared risk pool is a technically workable, but adds even more overhead, and ends up a more expensive way to do the same thing... but again regulations are involved (and fixing very flawed ones at that).
- AnthonyMouse 9y ago
  > Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted. Actual markets don't work that way. If you could actually make that much money then someone would open a competing emergency room right across the street, let everyone know that they charge $1 less and take all the business. Then the first emergency room would charge $2 less to take it back, until they're both charging reasonable prices. It's the same reason you don't have to sign your life away to buy food even though you would die without it. The problem in the US is that the regulations on the market for medical services work almost the exact opposite of that. There is no price transparency at all so you have no idea which facilities are more expensive. And if someone wants to open a competing facility, they have to get a Certificate of Need proving that the existing facilities don't have enough capacity. Even though having enough capacity doesn't preclude charging outrageous prices in the absence of competition. > I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy). The existing US system is pure corruption. It's heavily regulated but the regulations are a result of regulatory capture by insurance companies (who want higher costs because higher costs means more vig), and all the industries the insurance money pays for like pharma. The result is that medicine in the US is outrageously expensive. But the expense doesn't go away even with universal coverage unless you fix the regulations, and if you did that then people would be able to afford medicine out of pocket without insurance.
  - dv_dt 9y ago
    > Actual markets don't work that way. Isn't that exactly what's happening in slower motion with the incredible price hikes in many drugs such as insulin? And you assume that the neighborhood can sustain two emergency rooms - a second competitor isn't going to arise if the setup costs are high and the competitor can't undercut and survive the competition phase. This is exactly why there aren't multiple competitors to residential ISPs, because after the risk and costs are factored in setting up overcapacity for a market isn't a good investment. Further if you look at the drug markets, sufficient cost and time barriers exist and allow even makers of generic drugs (with no patent monopolies) to charge inhuman rates for drugs. And generally investors are not going to back efforts to fund a head-to-head competitive slugfest when the market of users for a given drug is basically of fixed size. Again building overcapacity is generally avoided in these markets because of the high entry barriers. https://www.nytimes.com/2017/04/14/business/lannett-drug-price-hike-bedrosian.html https://www.nytimes.com/2017/04/14/business/lannett-drug-pri...
    - AnthonyMouse 9y ago
      > Isn't that exactly what's happening in slower motion with the incredible price hikes in many drugs such as insulin? Again, the market for medicine suffers from regulatory capture. The regulations make it prohibitively expensive (literally millions of dollars) for new competitors to enter the market, which allows the incumbents to conspire to fix prices. If we had the same standards for manufacturing medicine as we have for manufacturing food, that wouldn't be happening. > And you assume that the neighborhood can sustain two emergency rooms - a second competitor isn't going to arise if the setup costs are high and the competitor can't undercut and survive the competition phase. All you need is for the profits from entering the market to exceed the entry cost, which is exactly the case when the existing provider is charging outrageously high prices. It is certainly true that adding a competitor will increase total costs. But that means total costs will at most double. That's not good, but it's not anywhere near as bad as having a monopoly that can demand your lifetime earnings in exchange for saving your life. And everybody knows that to begin with, which is why you get this: > This is exactly why there aren't multiple competitors to residential ISPs, because after the risk and costs are factored in setting up overcapacity for a market isn't a good investment. It would be a good investment if the incumbent ISP was charging $500/month for residential internet service. But they know if they did that then it would open the door to a competitor who could charge $400/month and still pay the cost of duplicating the entire infrastructure. So instead the incumbent charges $50-$100/month, even in areas where they have a monopoly, because they know that price is low enough to deter new competitors from entering. A credible threat of competition is enough to prevent prices from becoming completely outrageous even in areas where there continues to be a monopoly in practice. Only monopolies under no threat of competition, like the ones enforced through patents or Certificate of Need laws, can charge outrageous prices without that happening.
- alexanderstears 9y ago
  I don't defend the status quo. I think this is the right way to resolve healthcare. I agree with about 95% of this: https://market-ticker.org/akcs-www?post=231949 https://market-ticker.org/akcs-www?post=231949 We just need smarter regulations: > every medical facility needs to have a price for each billing code > every healthcare facility has to publish their prices > heatlh care facilities must honor their published prices for everyone > if someone needs car and they can't pay, the government will pay for the care but the government holds a debt and can garnish wages / use tax refunds / credit welfare to cover the debt If people could shop on price for routine care, medical companies would become more efficient and extend those prices to people in an emergency
  - dv_dt 9y ago
    Healthcare often isn't billable in consistent units. Someone goes in for surgery, and they get opened up, despite pre-imaging, there are complex things that can go wrong and instead of a 1 hr 10k effort, you need to put in a 6 hours 100k effort? how is that billed? are you going to require statistics of probabily of going wrong too? By the time you get all these 'consistent billing units' figured out for all the multitude of ever changing procedures wouldnt have been cheaper just to have covered reasonable costs instead of maintaining a multi-way cost/trust verification excercise?
    - alexanderstears 9y ago
      how is it billed? Go ask the people who get jobs as billers - most hosptials have more billers than beds, they can sort it out. Before you go to surgery agree on the price of everything and ask for a video so you can verify the work was done as billed and there wasn't any padding. In an emergency situation, you're entitled to the price they advertise. IF you can't afford it, the government picks up the bill and maybe you pay for it, maybe you don't. If you want insurance, you can buy insurance but let the insurers use every actuarially relevant bit of information so the insurance works as insurance
      - not_kurt_godel 9y ago
conanbatt 9y ago
I concur. The argument that healthcare in the US is broken because its a market almost triggers me. It has profound regulations that affect its market behavior.

dv_dt 9y ago

> The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill. I don't think that's onerous, I think that is a minimal, and admittedly imperfect, expression of our societal intent that people shouldn't die unnecessarily in emergency rooms - either from lack of being able to pay; nor from a practical standpoint, lack or delay of on-hand proof of ability to pay. Removing those regulations would cause all sorts of other problems. Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted. Even more profitable, if I judge that person as having a well connected social network, I can charge even more because I know their friends and colleagues would chip in to save them... I'm not sure how a competitive market with no regulation changes the worst case for this transaction - if someone is near death then moving on to another emergency room is out of the question. I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy). Insurace with a shared risk pool is a technically workable, but adds even more overhead, and ends up a more expensive way to do the same thing... but again regulations are involved (and fixing very flawed ones at that).

AnthonyMouse 9y ago
> Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted. Actual markets don't work that way. If you could actually make that much money then someone would open a competing emergency room right across the street, let everyone know that they charge $1 less and take all the business. Then the first emergency room would charge $2 less to take it back, until they're both charging reasonable prices. It's the same reason you don't have to sign your life away to buy food even though you would die without it. The problem in the US is that the regulations on the market for medical services work almost the exact opposite of that. There is no price transparency at all so you have no idea which facilities are more expensive. And if someone wants to open a competing facility, they have to get a Certificate of Need proving that the existing facilities don't have enough capacity. Even though having enough capacity doesn't preclude charging outrageous prices in the absence of competition. > I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy). The existing US system is pure corruption. It's heavily regulated but the regulations are a result of regulatory capture by insurance companies (who want higher costs because higher costs means more vig), and all the industries the insurance money pays for like pharma. The result is that medicine in the US is outrageously expensive. But the expense doesn't go away even with universal coverage unless you fix the regulations, and if you did that then people would be able to afford medicine out of pocket without insurance.
- dv_dt 9y ago
  > Actual markets don't work that way. Isn't that exactly what's happening in slower motion with the incredible price hikes in many drugs such as insulin? And you assume that the neighborhood can sustain two emergency rooms - a second competitor isn't going to arise if the setup costs are high and the competitor can't undercut and survive the competition phase. This is exactly why there aren't multiple competitors to residential ISPs, because after the risk and costs are factored in setting up overcapacity for a market isn't a good investment. Further if you look at the drug markets, sufficient cost and time barriers exist and allow even makers of generic drugs (with no patent monopolies) to charge inhuman rates for drugs. And generally investors are not going to back efforts to fund a head-to-head competitive slugfest when the market of users for a given drug is basically of fixed size. Again building overcapacity is generally avoided in these markets because of the high entry barriers. https://www.nytimes.com/2017/04/14/business/lannett-drug-price-hike-bedrosian.html https://www.nytimes.com/2017/04/14/business/lannett-drug-pri...
  - AnthonyMouse 9y ago
    > Isn't that exactly what's happening in slower motion with the incredible price hikes in many drugs such as insulin? Again, the market for medicine suffers from regulatory capture. The regulations make it prohibitively expensive (literally millions of dollars) for new competitors to enter the market, which allows the incumbents to conspire to fix prices. If we had the same standards for manufacturing medicine as we have for manufacturing food, that wouldn't be happening. > And you assume that the neighborhood can sustain two emergency rooms - a second competitor isn't going to arise if the setup costs are high and the competitor can't undercut and survive the competition phase. All you need is for the profits from entering the market to exceed the entry cost, which is exactly the case when the existing provider is charging outrageously high prices. It is certainly true that adding a competitor will increase total costs. But that means total costs will at most double. That's not good, but it's not anywhere near as bad as having a monopoly that can demand your lifetime earnings in exchange for saving your life. And everybody knows that to begin with, which is why you get this: > This is exactly why there aren't multiple competitors to residential ISPs, because after the risk and costs are factored in setting up overcapacity for a market isn't a good investment. It would be a good investment if the incumbent ISP was charging $500/month for residential internet service. But they know if they did that then it would open the door to a competitor who could charge $400/month and still pay the cost of duplicating the entire infrastructure. So instead the incumbent charges $50-$100/month, even in areas where they have a monopoly, because they know that price is low enough to deter new competitors from entering. A credible threat of competition is enough to prevent prices from becoming completely outrageous even in areas where there continues to be a monopoly in practice. Only monopolies under no threat of competition, like the ones enforced through patents or Certificate of Need laws, can charge outrageous prices without that happening.
alexanderstears 9y ago
I don't defend the status quo. I think this is the right way to resolve healthcare. I agree with about 95% of this: https://market-ticker.org/akcs-www?post=231949 https://market-ticker.org/akcs-www?post=231949 We just need smarter regulations: > every medical facility needs to have a price for each billing code > every healthcare facility has to publish their prices > heatlh care facilities must honor their published prices for everyone > if someone needs car and they can't pay, the government will pay for the care but the government holds a debt and can garnish wages / use tax refunds / credit welfare to cover the debt If people could shop on price for routine care, medical companies would become more efficient and extend those prices to people in an emergency
- dv_dt 9y ago
  Healthcare often isn't billable in consistent units. Someone goes in for surgery, and they get opened up, despite pre-imaging, there are complex things that can go wrong and instead of a 1 hr 10k effort, you need to put in a 6 hours 100k effort? how is that billed? are you going to require statistics of probabily of going wrong too? By the time you get all these 'consistent billing units' figured out for all the multitude of ever changing procedures wouldnt have been cheaper just to have covered reasonable costs instead of maintaining a multi-way cost/trust verification excercise?
  - alexanderstears 9y ago
    how is it billed? Go ask the people who get jobs as billers - most hosptials have more billers than beds, they can sort it out. Before you go to surgery agree on the price of everything and ask for a video so you can verify the work was done as billed and there wasn't any padding. In an emergency situation, you're entitled to the price they advertise. IF you can't afford it, the government picks up the bill and maybe you pay for it, maybe you don't. If you want insurance, you can buy insurance but let the insurers use every actuarially relevant bit of information so the insurance works as insurance
    - not_kurt_godel 9y ago

conanbatt 9y ago

I concur. The argument that healthcare in the US is broken because its a market almost triggers me. It has profound regulations that affect its market behavior.