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Price discovery is indeed difficult in the current market. However, the current healthcare market is no where close to a free market. For example, suppose you

Price discovery is indeed difficult in the current market. However, the current healthcare market is no where close to a free market. For example, suppose you wanted to start a hospital that offered price transparency, like the Surgery Center of Oklahoma does. (1) In thirty-five states and the District of Columbia, you'd first have to acquire a certificate-of-need (CON) from the state healthcare regulators. In order to get certificate of need, you must prove that the community “needs” the new or expanded service, and existing providers are invited to challenge your application. Existing hospitals typically don't want new competitors taking away their patients, so they vigorously fight to prevent new CON's from being issued. For example, Dr. Mark Monteferrante wanted to buy a second MRI machine for his radiology practice in 2003. But it took five years and more than $175,000 in fees to get the certificate. (2) And conlaws are just one example of perverse effects of state intervention into the healthcare market, from state laws restricting insurance competition, to severe restrictions on new entrants to the medical labor market, to drug monopolies. (1) https://surgerycenterok.com/pricing/ https://surgerycenterok.com/pricing/ (2) https://www.modernhealthcare.com/article/20160123/MAGAZINE/301239964 https://www.modernhealthcare.com/article/20160123/MAGAZINE/3...

xenadu02 8y ago
Price discovery requires pricing some people out of the market. Period. There is no "free market" healthcare system that can or ever will deliver required health services to everyone. Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow. That is both a massive distortion and non-optimal for the economy as a whole. There are certainly regulatory inefficiencies and other inefficiencies in healthcare markets, but a truly "free market" in healthcare not morally justifiable.
- nordsieck 8y ago
  > Price discovery requires pricing some people out of the market. Period. There is no "free market" healthcare system that can or ever will deliver required health services to everyone. There is no economic system that can deliver all of the health care to everyone who wants it. Fundamentally, health care resources are limited: doctors, beds, MRI machines, etc. Desire for health care is much less limited. The question is not whether to give everyone what they want, but instead how to imperfectly ration what we have.
  - minikites 8y ago
    Are you saying that the richest country in the world can't accomplish something that already exists in plain view in some of the poorest countries in the world?
    - TheCoelacanth 8y ago
      There is no country on earth that gives people all the healthcare they might want with no limits and that is not what we should be aiming for. There are many that give people enough healthcare and that is what we should be aiming for.
    - geezerjay 8y ago
      You really should get the facts on how those systems actually operate. I'm currently living in an european country that has a national health service that supposedly ticks all the socialist talking points, including free (in theory) access to emergency care, but not only is the service largely inoperational with year-long waiting periods for surgeries, including cancer treatments, but also has a disgruntle workforce who systematically complains they are underpaid and overworked. The situation is so appalingly bad that the national health service even routes patients to private hospitals and clinics, ending up paying a hefty bill for the services they were supposed to provide in-house but are largely unable to provide.
      - gambiting 8y ago
        While I also come from a country like the one you described, there is a very simple fact that cannot be ignored - when my dad got cancer 8 years ago, every single one of his operations and all the drugs(including incredibly expensive Glivec) were 100% free. He was even reimbursed for the cost of travelling to the hospital for his monthly check-up. If he had the same disease in US, he would die much earlier than he did, I'm 100% certain of it, because quite simply there is no way he could afford the treatment or the premiums that americans are paying for their healthcare. Even when he was sick enough that he couldn't work anymore, he was still 100% covered and didn't have to pay anything for anything ever. My point is - there are people in our countries who are probably dying because they have to wait months to be seen by someone. True. But there are also people in US who are dying because they cannot afford the treatment they need. I feel like this is far worse than the first situation - after all, we only have a finite number of doctors, a finite amount of hospitals, and limited capacity to add more(for reasons other than financial too). But US is the richest country in the world - and its citizens die because they cannot afford cancer drugs? That's abhorrent.
- WalterBright 8y ago
  > Price discovery requires pricing some people out of the market. I don't see the connection between posting prices and pricing people out of the market.
  - pfisch 8y ago
    If no one is priced out and you are operating in the free market then you need to raise your prices. Repeat until you maximize profits.
    - bumby 8y ago
      Does it have an end goal of maximizing profits, though? Couldn't the goal of price discovery be to find the point where supply = demand, without necessarily maximizing profit? Granted, this ignores the human trait to increase consumption when removed from directly paying all associated costs (e.g., my behavior at Golden Corral)
      - vec 8y ago
        If maximizing profits (or, more precisely, maximizing expected value) isn't a terminal goal for all involved parties then it isn't a free market.
        bumby 8y ago
        I see your point if the term profit is defined in a general sense, but with the exception of "corporations as people" caveat there's plenty of everyday examples where people are trying to maximize outcomes other than capital (sometimes at the expense of capital). I'm not sure that makes it any less of a free market
        vec 8y ago
        It does. There's no free market for soup kitchens for the homeless, for example. There exist entities who are willing to provide soup kitchen services below operating costs in perpetuity (i.e. charitably, for free). The price for services is kept artificially low ($0) by constant infusions of capital from outside the market (charitable donations), which prevents for-profit vendors who don't receive constant cash infusions from being able to compete on a level playing field. The resulting market is thereby warped by the distorting influence from non-market forces, preventing it from operating efficiently. It's not "free", in the technical sense. This isn't necessarily a bad thing, to be clear. The charitable funding system may well provide better aggregate social outcomes than a free market would for any number of reasons, not the least of which being that one of the freedoms that "free market" implies is the freedom for vendors to decide that some of their potential customers are more trouble than they're worth to serve.
- thinkloop 8y ago
  > There are certainly regulatory inefficiencies and other inefficiencies in healthcare markets, but a truly "free market" in healthcare not morally justifiable Socialized healthcare has its own "immoral" trade-offs. We essentially reduce per capita quality in favor of all-inclusive coverage. Proponents of free-market healthcare would argue that the inefficient allocation of resources inherent to socialization is immoral. Libertarians would argue that forcing money from one person to give to another for medical care is immoral. It's not really a question of morality, more of preferred philosophy and practicality. Framing it around morality makes the other side seem abhorrent and the situation difficult to find common ground.
  - xenadu02 8y ago
    > Socialized healthcare has its own "immoral" trade-offs. We essentially reduce per capita quality in favor of all-inclusive coverage That's a false dichotomy; there are many mixed systems where the government provides a baseline level of care with private insurance providing additional services or benefits (eg: government covers a shared hospital room, private insurance covers a private room). >Libertarians would argue that forcing money from one person to give to another for medical care is immoral True libertarians also argue that all taxation is theft (if they're purists anyway), making road construction immoral. > Framing it around morality makes the other side seem abhorrent and the situation difficult to find common ground. A "free market" in healthcare requires us to condemn people to death or debilitating injury when they cannot afford care. Unlike nearly every other area, this one literally involves life and death so I believe it must meet a different standard than other activity (economic or otherwise).
    - edanm 8y ago
      > True libertarians also argue that all taxation is theft (if they're purists anyway), making road construction immoral. No, it doesn't make road construction immoral in the eyes of libertarians. It makes taking money from other people, by force, in order to build a road, immoral. People are totally free to build roads privately and pay for it themselves, and even band together to build these roads. (Part of where the standard libertarian argument falls apart, in my eyes, is that government in many ways really is just a scaled up version of "people banding together to build a road". There are there are legitimate moral/philosophical questions around opt-in vs. opt-out though).
- deleted 8y ago
  [deleted]
- conanbatt 8y ago
  > Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow. This is also true with food. What keeps the price down is competition, not price controls.
  - chasontherobot 8y ago
    so when I get into a car accident and am bleeding internally, I can march down the street to the next hospital if I think the bill at the one I'm at is too high?
    - agent008t 8y ago
      No; but suppose we agree that emergency response services (fire, medical, police) should be state-run. The goal of such state-run ER is to get you as quickly as possible to a hospital, where care can be provided. The state can then shop around for the cheapest/best private provider for each catchment area. One could also make a case that the state should pay for this emergency care out of tax money - unless the state can show that you were the one responsible (e.g. if you end up in a hospital because of excessive drinking on a night out - taxpayers should not have to pay for you in this case). But such true emergency response seems like actually a very minor part of all medical care. It would be better for people to have private emergency arrangements through their insurance - but, of course, this is not always viable (if you are bleeding out in a car accident, there is no time to figure out which hospital you have a deal with), so that is one area where the state should probably be involved.
    - conanbatt 8y ago
      The decision is done before the accident, when you pick insurance.
- notatcomputer68 8y ago
  >Price discovery requires pricing some people out of the market. Period. A well working competitive market doesn't charge the maximum consumers can bear. It charges cost of service plus a profit margin.
  - projektfu 8y ago
    No, a well working competitive market reaches a price where marginal revenue equals marginal cost. Unless you are using an unorthodox version of microeconomics.
- bko 8y ago
  > Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow Someone is morbidly obese. They will die and are already debilitated. The cost of having their life back is eating less. Many are not willing to pay that price.
wisty 8y ago
Theory of the second best - https://en.wikipedia.org/wiki/Theory_of_the_second_best https://en.wikipedia.org/wiki/Theory_of_the_second_best Basically economics talk for how the second best solution might not be close to the best solution (i.e. there are local maxima). A perfectly free market might be theoretically best, but socialised healthcare might be better than a badly regulated private system.
jopsen 8y ago
Arguing that the current market isn't free, isn't an argument for why a free market healthcare system would work.
conanbatt 8y ago
Here here. There is an ideological divide between those that want socialized medicine and those that want a free market. But what the US has now is neither. And many of the most pervasive problems it has now are very much attributable to current regulations and laws.

xenadu02 8y ago

Price discovery requires pricing some people out of the market. Period. There is no "free market" healthcare system that can or ever will deliver required health services to everyone. Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow. That is both a massive distortion and non-optimal for the economy as a whole. There are certainly regulatory inefficiencies and other inefficiencies in healthcare markets, but a truly "free market" in healthcare not morally justifiable.

nordsieck 8y ago
> Price discovery requires pricing some people out of the market. Period. There is no "free market" healthcare system that can or ever will deliver required health services to everyone. There is no economic system that can deliver all of the health care to everyone who wants it. Fundamentally, health care resources are limited: doctors, beds, MRI machines, etc. Desire for health care is much less limited. The question is not whether to give everyone what they want, but instead how to imperfectly ration what we have.
- minikites 8y ago
  Are you saying that the richest country in the world can't accomplish something that already exists in plain view in some of the poorest countries in the world?
  - TheCoelacanth 8y ago
    There is no country on earth that gives people all the healthcare they might want with no limits and that is not what we should be aiming for. There are many that give people enough healthcare and that is what we should be aiming for.
  - geezerjay 8y ago
    You really should get the facts on how those systems actually operate. I'm currently living in an european country that has a national health service that supposedly ticks all the socialist talking points, including free (in theory) access to emergency care, but not only is the service largely inoperational with year-long waiting periods for surgeries, including cancer treatments, but also has a disgruntle workforce who systematically complains they are underpaid and overworked. The situation is so appalingly bad that the national health service even routes patients to private hospitals and clinics, ending up paying a hefty bill for the services they were supposed to provide in-house but are largely unable to provide.
    - gambiting 8y ago
      While I also come from a country like the one you described, there is a very simple fact that cannot be ignored - when my dad got cancer 8 years ago, every single one of his operations and all the drugs(including incredibly expensive Glivec) were 100% free. He was even reimbursed for the cost of travelling to the hospital for his monthly check-up. If he had the same disease in US, he would die much earlier than he did, I'm 100% certain of it, because quite simply there is no way he could afford the treatment or the premiums that americans are paying for their healthcare. Even when he was sick enough that he couldn't work anymore, he was still 100% covered and didn't have to pay anything for anything ever. My point is - there are people in our countries who are probably dying because they have to wait months to be seen by someone. True. But there are also people in US who are dying because they cannot afford the treatment they need. I feel like this is far worse than the first situation - after all, we only have a finite number of doctors, a finite amount of hospitals, and limited capacity to add more(for reasons other than financial too). But US is the richest country in the world - and its citizens die because they cannot afford cancer drugs? That's abhorrent.
WalterBright 8y ago
> Price discovery requires pricing some people out of the market. I don't see the connection between posting prices and pricing people out of the market.
- pfisch 8y ago
  If no one is priced out and you are operating in the free market then you need to raise your prices. Repeat until you maximize profits.
  - bumby 8y ago
    Does it have an end goal of maximizing profits, though? Couldn't the goal of price discovery be to find the point where supply = demand, without necessarily maximizing profit? Granted, this ignores the human trait to increase consumption when removed from directly paying all associated costs (e.g., my behavior at Golden Corral)
    - vec 8y ago
      If maximizing profits (or, more precisely, maximizing expected value) isn't a terminal goal for all involved parties then it isn't a free market.
      - bumby 8y ago
        I see your point if the term profit is defined in a general sense, but with the exception of "corporations as people" caveat there's plenty of everyday examples where people are trying to maximize outcomes other than capital (sometimes at the expense of capital). I'm not sure that makes it any less of a free market
        vec 8y ago
        It does. There's no free market for soup kitchens for the homeless, for example. There exist entities who are willing to provide soup kitchen services below operating costs in perpetuity (i.e. charitably, for free). The price for services is kept artificially low ($0) by constant infusions of capital from outside the market (charitable donations), which prevents for-profit vendors who don't receive constant cash infusions from being able to compete on a level playing field. The resulting market is thereby warped by the distorting influence from non-market forces, preventing it from operating efficiently. It's not "free", in the technical sense. This isn't necessarily a bad thing, to be clear. The charitable funding system may well provide better aggregate social outcomes than a free market would for any number of reasons, not the least of which being that one of the freedoms that "free market" implies is the freedom for vendors to decide that some of their potential customers are more trouble than they're worth to serve.
thinkloop 8y ago
> There are certainly regulatory inefficiencies and other inefficiencies in healthcare markets, but a truly "free market" in healthcare not morally justifiable Socialized healthcare has its own "immoral" trade-offs. We essentially reduce per capita quality in favor of all-inclusive coverage. Proponents of free-market healthcare would argue that the inefficient allocation of resources inherent to socialization is immoral. Libertarians would argue that forcing money from one person to give to another for medical care is immoral. It's not really a question of morality, more of preferred philosophy and practicality. Framing it around morality makes the other side seem abhorrent and the situation difficult to find common ground.
- xenadu02 8y ago
  > Socialized healthcare has its own "immoral" trade-offs. We essentially reduce per capita quality in favor of all-inclusive coverage That's a false dichotomy; there are many mixed systems where the government provides a baseline level of care with private insurance providing additional services or benefits (eg: government covers a shared hospital room, private insurance covers a private room). >Libertarians would argue that forcing money from one person to give to another for medical care is immoral True libertarians also argue that all taxation is theft (if they're purists anyway), making road construction immoral. > Framing it around morality makes the other side seem abhorrent and the situation difficult to find common ground. A "free market" in healthcare requires us to condemn people to death or debilitating injury when they cannot afford care. Unlike nearly every other area, this one literally involves life and death so I believe it must meet a different standard than other activity (economic or otherwise).
  - edanm 8y ago
    > True libertarians also argue that all taxation is theft (if they're purists anyway), making road construction immoral. No, it doesn't make road construction immoral in the eyes of libertarians. It makes taking money from other people, by force, in order to build a road, immoral. People are totally free to build roads privately and pay for it themselves, and even band together to build these roads. (Part of where the standard libertarian argument falls apart, in my eyes, is that government in many ways really is just a scaled up version of "people banding together to build a road". There are there are legitimate moral/philosophical questions around opt-in vs. opt-out though).
deleted 8y ago
[deleted]
conanbatt 8y ago
> Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow. This is also true with food. What keeps the price down is competition, not price controls.
- chasontherobot 8y ago
  so when I get into a car accident and am bleeding internally, I can march down the street to the next hospital if I think the bill at the one I'm at is too high?
  - agent008t 8y ago
    No; but suppose we agree that emergency response services (fire, medical, police) should be state-run. The goal of such state-run ER is to get you as quickly as possible to a hospital, where care can be provided. The state can then shop around for the cheapest/best private provider for each catchment area. One could also make a case that the state should pay for this emergency care out of tax money - unless the state can show that you were the one responsible (e.g. if you end up in a hospital because of excessive drinking on a night out - taxpayers should not have to pay for you in this case). But such true emergency response seems like actually a very minor part of all medical care. It would be better for people to have private emergency arrangements through their insurance - but, of course, this is not always viable (if you are bleeding out in a car accident, there is no time to figure out which hospital you have a deal with), so that is one area where the state should probably be involved.
  - conanbatt 8y ago
    The decision is done before the accident, when you pick insurance.
notatcomputer68 8y ago
>Price discovery requires pricing some people out of the market. Period. A well working competitive market doesn't charge the maximum consumers can bear. It charges cost of service plus a profit margin.
- projektfu 8y ago
  No, a well working competitive market reaches a price where marginal revenue equals marginal cost. Unless you are using an unorthodox version of microeconomics.
bko 8y ago
> Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow Someone is morbidly obese. They will die and are already debilitated. The cost of having their life back is eating less. Many are not willing to pay that price.

wisty 8y ago

Theory of the second best - https://en.wikipedia.org/wiki/Theory_of_the_second_best https://en.wikipedia.org/wiki/Theory_of_the_second_best Basically economics talk for how the second best solution might not be close to the best solution (i.e. there are local maxima). A perfectly free market might be theoretically best, but socialised healthcare might be better than a badly regulated private system.

jopsen 8y ago

Arguing that the current market isn't free, isn't an argument for why a free market healthcare system would work.

conanbatt 8y ago

Here here. There is an ideological divide between those that want socialized medicine and those that want a free market. But what the US has now is neither. And many of the most pervasive problems it has now are very much attributable to current regulations and laws.