5 ms·

We pay a far lesser portion of our GDP in Europe for health care and we have a longer life expectancy, higher chance of survival for the majority of cancer and

by pimmen 9y ago

We pay a far lesser portion of our GDP in Europe for health care and we have a longer life expectancy, higher chance of survival for the majority of cancer and cardiovascular diseases. It’s not that hard to understand; you try to control market forces when you’re talking about inelastic demand because that kind of demand is an opportunity for serious abuse. Isn’t that the reason the US has its war on drugs? Yet it can’t see this more expensive and deadlier problem?

rukittenme 9y ago
Gasoline is an inelastic good but its price is relatively low and affordable because of the abundance of suppliers. In the US, local monopolies provide health care.
- dv_dt 9y ago
  Gas inelastic as a good, but gas vendors are easily substitutable with low friction. The vendor you get gas from one week doesn't need to be the same as the next. And that transaction, the purchase of gas is completely interchangeable and identical from one week to the next. Medicare care in general does not have any of those characteristics (except for maybe annual checkups - but that's not where the bulk of medical costs are in our system). That has to do with the nature of the product and how it must be delivered, not necessarily with any monopoly effect. Even with a checkup, if you go to a different doctor every time that would reduce the effectiveness of the care.
- eesmith 9y ago
  How is that relevant? In many European countries, gasoline taxes are quite high. Wikipedia's "Fuel tax" page says that in 2014 Germans paid US$6.14 per US gallon of gasoline. Yet there is also an abundance of suppliers in Germany. The hospitals in many European countries are publicly owned and operated. Quoting Wikipedia's "Healthcare in Denmark" page, "The central government plays a relatively limited role in health care in Denmark ... Hospital care is mainly provided by hospitals owned and run by the regions." There are five such regions. Aren't there, using your argument, also five local monopolies in Denmark? But the situation in Denmark is nothing like the US.
  - rukittenme 9y ago
    I think you need to reread what I wrote and understand what I'm arguing. The OP argued inelastic demand drives price gouging which isn't true in the case of gasoline. Price gouging in medicine isn't driven by inelasticity, its driven by a dearth of suppliers. In Denmark, you have few suppliers but the suppliers you do have are owned and regulated by the government. It's not a relevant comparison. They are not a market-based supplier.
    - bonzini 9y ago
      It's not driven by the dearth of suppliers, it's driven by the impossibility of choosing the cheapest provider due to a combination of 1) the lack of transparency in hospital pricing; 2) not being able to anticipate your expenses; 3) the insurers being able to "cheat" by agreeing on lower prices with the providers; 4) insurers forming a cartel. When there are so many forces pushing against the creation of a free market and a healthy balance between supply and demand, there is only one thing that the government can do: either socialize it (that's what happens with roads, for example), or regulate it like there's no tomorrow (that's what happens with utilities). However, in the US it is blasphemy to even suggest doing either thing to healthcare.
      - rukittenme 9y ago
        You're absolutely write to go after my "dearth of suppliers" point. It certainly is not the only reason for healthcare costs or even a large percentage. I even say so in a different comment. 1 and 2 are absolutely valid points and share responsibility for healthcare costs. > However, in the US it is blasphemy to even suggest doing either thing to healthcare. I wholeheartedly disagree with this. Healthcare is the most regulated industry in America.
    - eesmith 9y ago
      I asked for clarification because I didn't understand what you are arguing. I don't think it helps to follow up by repeating that I need to understand. I now understand your point, thank you.
- pimmen 9y ago
  There are other ways to travel than by car, you can walk for example. Trains, light rails, bikes and electric cars don’t use gasoline and are options, if you make sacrifices. There’s no alternative sacrifices you can make to solve your cancer problem, though; you need a doctor and the right treatment. Gasoline is also a very bad example. They get loads of tax breaks from local, state and federal governments because they are too big to fail in terms of jobs, revenue and utility. They also get a lot of help when they have to clean up tgeir mess. That’s what I would call subsidy.
  - rukittenme 9y ago
    You're missing the point. Gas is priced competitively in areas where there are no alternatives to its purchase. This is possible because there are lots of people who compete to supply gas. Basic econ 101. With hospitals, you have one local monopoly to choose from. Therefore you get monopoly pricing. Yes, if you're shot, you're not going to be too choosy about where the ambulance takes you. But most medical emergencies have some lead up to diagnosis and some wait time for the actual operation. Even cancer is not treated immediately. You schedule an appointment to have it treated over a long period of time. Now with all this time, you theoretically have the ability to compare suppliers. But in our world, there is one regional monopoly providing care. THAT ISN'T THE ONLY REASON CARE IS EXPENSIVE. But it is a factor worth talking about and considering.
    - eesmith 9y ago
      You wrote: "But most medical emergencies have some lead up to diagnosis and some wait time for the actual operation. ... Now with all this time, you theoretically have the ability to compare suppliers. But in our world, there is one regional monopoly providing care." Even when there is more than source of care and when there is plenty of time and the person is interesting in comparison shopping, in practice that is still difficult to do in the US. Last year there was a piece by Johnny Harris at Vox titled "I tried to find out how much my son's birth would cost. No one would tell me." https://www.vox.com/2016/5/5/11591592/birth-cost-hospital-bills https://www.vox.com/2016/5/5/11591592/birth-cost-hospital-bi... Childbirth is the #1 reason why people go to the hospital. If the price estimate isn't available for an average/low-risk birth, then it's not going to be available for other procedures. And again, this includes areas where there are multiple hospitals which provide maternity services, so your explanation of "local monopoly" isn't enough. (Quoting https://www.womenshealthmag.com/mom/costs-of-giving-birth https://www.womenshealthmag.com/mom/costs-of-giving-birth : "this charging system often results in "wildly inflated" costs, and they can vary from hospital to hospital—even if you're just looking at ones in the same neighborhood.") Your "basic econ 101" quip doesn't go very far to explain why it is that the governmental organizations which regulate these hospitals aren't, you know, regulating them to prevent such "basic econ 101" problems. What's the point of giving them a local monopoly if they are going to abuse it?
- torstenvl 9y ago
  Gasoline is only inelastic compared to consumer goods. It's quite elastic compared to emergency medical care. The alternative to buying gas is to take a staycation or carpool to work. The alternative to treating emergencies is likely death.
- bluGill 9y ago
  Actually this is wrong. There is an abundance of retailers to buy your gas from. However in any given area they ALL get their gas from the same refinery. Any retailer that doesn't will have to to pay much higher shipping fees and thus cannot compete. That means the refinery has a monopoly even though you have a choice of names on the sign. (note that the station can choose additives so it isn't completely irrelevant) During the golf war (first) I used to laugh at gas stations advertising that they sell gas made in the US. The refinery is in the US, but all the crude came from Canada. (This of course only applies the particular city I lived in at the time)
- mikeash 9y ago
  Gasoline is also affordable because individual needs tend to be fairly low and consistent. Imagine what the gasoline market would look like if from time to time a person had to buy 100,000 gallons of gasoline or they would die.
blibble 9y ago
I always find it very odd that your average American puts up with the current system instead of revolting as a kid growing up in the UK I remember watching (and not understanding at all) the episode of the Simpsons where Homer went to A&E, was told he needed a triple bypass urgently, couldn't afford it, and his condition got worse and worse in my mind you went to the doctor/hospital when you were sick, and you came out well (or not at all), money didn't enter into it I re-watched it again as an adult a few weeks ago, now with an understanding of HMOs, deductibles and previous condition waivers among other things, and found the episode to be really quite sad
jellicle 9y ago
It's hard to get people to see this is an expensive and deadly problem when their paycheck depends on them not seeing it.
WillPostForFood 9y ago
The 5-year survival rate for cancers is much better in the US than Europe. It's what you'd expect for all the money spent, whether it is worth it is unclear. https://www.ncbi.nlm.nih.gov/books/NBK62584/table/ch9.t1/?report=objectonly https://www.ncbi.nlm.nih.gov/books/NBK62584/table/ch9.t1/?re... For heart attack survival, the US isn't the best, but ranks somewhere in the top 4 depending on the data and criteria. There are a bunch of issues that adversely affect life expectancy in the US not directly related to the health care system. High violent crime rate, much greater dependence on driving cars, standard american diet, opioid crisis (maybe we can blame some of this on the health care system).
- deleted 9y ago
  [deleted]
- tzs 9y ago
  > The 5-year survival rate for cancers is much better in the US than Europe. It's what you'd expect for all the money spent, whether it is worth it is unclear. Note that survival rate is measured from when the cancer is diagnosed. For many of those cancers the US screens for them more frequently than they do in the rest of the world. If Alice and Bob both get cancer in 2015 which will kill them in 2021, and Alice lives in a place where they screen for it every year she will survive for 5 years after diagnoses. If Bob lives someplace where they only screen every 4 years and he was last screened in 2014 he will only survive 3 years after diagnoses. Same cancer, same outcome in the same number of years, but Alice counts as a 5 year survivor and Bob does not. Another thing to watch out for when comparing health systems across countries is different definitions. For instance the US generally has a higher infant mortality rate than other western countries, but at least part of that is because of different definitions. For example, a very premature baby with very low birth weight has essentially no chance of survival. In much of the world this would be counted as a stillbirth. In much of the US, however, if it was not actually dead at birth it will be counted as a live birth. Result: a few minutes or hours later, when it actually dies, it is infant mortality in the US statistics and not infant mortality elsewhere. (These definitional differences are not enough to explain the higher infant mortality in the US, but they do close the gap a bit).

by pimmen 9y ago

rukittenme 9y ago

Gasoline is an inelastic good but its price is relatively low and affordable because of the abundance of suppliers. In the US, local monopolies provide health care.

dv_dt 9y ago
Gas inelastic as a good, but gas vendors are easily substitutable with low friction. The vendor you get gas from one week doesn't need to be the same as the next. And that transaction, the purchase of gas is completely interchangeable and identical from one week to the next. Medicare care in general does not have any of those characteristics (except for maybe annual checkups - but that's not where the bulk of medical costs are in our system). That has to do with the nature of the product and how it must be delivered, not necessarily with any monopoly effect. Even with a checkup, if you go to a different doctor every time that would reduce the effectiveness of the care.
eesmith 9y ago
How is that relevant? In many European countries, gasoline taxes are quite high. Wikipedia's "Fuel tax" page says that in 2014 Germans paid US$6.14 per US gallon of gasoline. Yet there is also an abundance of suppliers in Germany. The hospitals in many European countries are publicly owned and operated. Quoting Wikipedia's "Healthcare in Denmark" page, "The central government plays a relatively limited role in health care in Denmark ... Hospital care is mainly provided by hospitals owned and run by the regions." There are five such regions. Aren't there, using your argument, also five local monopolies in Denmark? But the situation in Denmark is nothing like the US.
- rukittenme 9y ago
  I think you need to reread what I wrote and understand what I'm arguing. The OP argued inelastic demand drives price gouging which isn't true in the case of gasoline. Price gouging in medicine isn't driven by inelasticity, its driven by a dearth of suppliers. In Denmark, you have few suppliers but the suppliers you do have are owned and regulated by the government. It's not a relevant comparison. They are not a market-based supplier.
  - bonzini 9y ago
    It's not driven by the dearth of suppliers, it's driven by the impossibility of choosing the cheapest provider due to a combination of 1) the lack of transparency in hospital pricing; 2) not being able to anticipate your expenses; 3) the insurers being able to "cheat" by agreeing on lower prices with the providers; 4) insurers forming a cartel. When there are so many forces pushing against the creation of a free market and a healthy balance between supply and demand, there is only one thing that the government can do: either socialize it (that's what happens with roads, for example), or regulate it like there's no tomorrow (that's what happens with utilities). However, in the US it is blasphemy to even suggest doing either thing to healthcare.
    - rukittenme 9y ago
      You're absolutely write to go after my "dearth of suppliers" point. It certainly is not the only reason for healthcare costs or even a large percentage. I even say so in a different comment. 1 and 2 are absolutely valid points and share responsibility for healthcare costs. > However, in the US it is blasphemy to even suggest doing either thing to healthcare. I wholeheartedly disagree with this. Healthcare is the most regulated industry in America.
  - eesmith 9y ago
    I asked for clarification because I didn't understand what you are arguing. I don't think it helps to follow up by repeating that I need to understand. I now understand your point, thank you.
pimmen 9y ago
There are other ways to travel than by car, you can walk for example. Trains, light rails, bikes and electric cars don’t use gasoline and are options, if you make sacrifices. There’s no alternative sacrifices you can make to solve your cancer problem, though; you need a doctor and the right treatment. Gasoline is also a very bad example. They get loads of tax breaks from local, state and federal governments because they are too big to fail in terms of jobs, revenue and utility. They also get a lot of help when they have to clean up tgeir mess. That’s what I would call subsidy.
- rukittenme 9y ago
  You're missing the point. Gas is priced competitively in areas where there are no alternatives to its purchase. This is possible because there are lots of people who compete to supply gas. Basic econ 101. With hospitals, you have one local monopoly to choose from. Therefore you get monopoly pricing. Yes, if you're shot, you're not going to be too choosy about where the ambulance takes you. But most medical emergencies have some lead up to diagnosis and some wait time for the actual operation. Even cancer is not treated immediately. You schedule an appointment to have it treated over a long period of time. Now with all this time, you theoretically have the ability to compare suppliers. But in our world, there is one regional monopoly providing care. THAT ISN'T THE ONLY REASON CARE IS EXPENSIVE. But it is a factor worth talking about and considering.
  - eesmith 9y ago
    You wrote: "But most medical emergencies have some lead up to diagnosis and some wait time for the actual operation. ... Now with all this time, you theoretically have the ability to compare suppliers. But in our world, there is one regional monopoly providing care." Even when there is more than source of care and when there is plenty of time and the person is interesting in comparison shopping, in practice that is still difficult to do in the US. Last year there was a piece by Johnny Harris at Vox titled "I tried to find out how much my son's birth would cost. No one would tell me." https://www.vox.com/2016/5/5/11591592/birth-cost-hospital-bills https://www.vox.com/2016/5/5/11591592/birth-cost-hospital-bi... Childbirth is the #1 reason why people go to the hospital. If the price estimate isn't available for an average/low-risk birth, then it's not going to be available for other procedures. And again, this includes areas where there are multiple hospitals which provide maternity services, so your explanation of "local monopoly" isn't enough. (Quoting https://www.womenshealthmag.com/mom/costs-of-giving-birth https://www.womenshealthmag.com/mom/costs-of-giving-birth : "this charging system often results in "wildly inflated" costs, and they can vary from hospital to hospital—even if you're just looking at ones in the same neighborhood.") Your "basic econ 101" quip doesn't go very far to explain why it is that the governmental organizations which regulate these hospitals aren't, you know, regulating them to prevent such "basic econ 101" problems. What's the point of giving them a local monopoly if they are going to abuse it?
torstenvl 9y ago
Gasoline is only inelastic compared to consumer goods. It's quite elastic compared to emergency medical care. The alternative to buying gas is to take a staycation or carpool to work. The alternative to treating emergencies is likely death.
bluGill 9y ago
Actually this is wrong. There is an abundance of retailers to buy your gas from. However in any given area they ALL get their gas from the same refinery. Any retailer that doesn't will have to to pay much higher shipping fees and thus cannot compete. That means the refinery has a monopoly even though you have a choice of names on the sign. (note that the station can choose additives so it isn't completely irrelevant) During the golf war (first) I used to laugh at gas stations advertising that they sell gas made in the US. The refinery is in the US, but all the crude came from Canada. (This of course only applies the particular city I lived in at the time)
mikeash 9y ago
Gasoline is also affordable because individual needs tend to be fairly low and consistent. Imagine what the gasoline market would look like if from time to time a person had to buy 100,000 gallons of gasoline or they would die.

blibble 9y ago

I always find it very odd that your average American puts up with the current system instead of revolting as a kid growing up in the UK I remember watching (and not understanding at all) the episode of the Simpsons where Homer went to A&E, was told he needed a triple bypass urgently, couldn't afford it, and his condition got worse and worse in my mind you went to the doctor/hospital when you were sick, and you came out well (or not at all), money didn't enter into it I re-watched it again as an adult a few weeks ago, now with an understanding of HMOs, deductibles and previous condition waivers among other things, and found the episode to be really quite sad

jellicle 9y ago

It's hard to get people to see this is an expensive and deadly problem when their paycheck depends on them not seeing it.

WillPostForFood 9y ago

The 5-year survival rate for cancers is much better in the US than Europe. It's what you'd expect for all the money spent, whether it is worth it is unclear. https://www.ncbi.nlm.nih.gov/books/NBK62584/table/ch9.t1/?report=objectonly https://www.ncbi.nlm.nih.gov/books/NBK62584/table/ch9.t1/?re... For heart attack survival, the US isn't the best, but ranks somewhere in the top 4 depending on the data and criteria. There are a bunch of issues that adversely affect life expectancy in the US not directly related to the health care system. High violent crime rate, much greater dependence on driving cars, standard american diet, opioid crisis (maybe we can blame some of this on the health care system).

deleted 9y ago
[deleted]
tzs 9y ago
> The 5-year survival rate for cancers is much better in the US than Europe. It's what you'd expect for all the money spent, whether it is worth it is unclear. Note that survival rate is measured from when the cancer is diagnosed. For many of those cancers the US screens for them more frequently than they do in the rest of the world. If Alice and Bob both get cancer in 2015 which will kill them in 2021, and Alice lives in a place where they screen for it every year she will survive for 5 years after diagnoses. If Bob lives someplace where they only screen every 4 years and he was last screened in 2014 he will only survive 3 years after diagnoses. Same cancer, same outcome in the same number of years, but Alice counts as a 5 year survivor and Bob does not. Another thing to watch out for when comparing health systems across countries is different definitions. For instance the US generally has a higher infant mortality rate than other western countries, but at least part of that is because of different definitions. For example, a very premature baby with very low birth weight has essentially no chance of survival. In much of the world this would be counted as a stillbirth. In much of the US, however, if it was not actually dead at birth it will be counted as a live birth. Result: a few minutes or hours later, when it actually dies, it is infant mortality in the US statistics and not infant mortality elsewhere. (These definitional differences are not enough to explain the higher infant mortality in the US, but they do close the gap a bit).