5 ms·

The idea of effective competition in emergency services has always struck me as fanciful. The benefit that competition provides to incentivize lower prices and

The idea of effective competition in emergency services has always struck me as fanciful. The benefit that competition provides to incentivize lower prices and better services is a consumer's ability to easily deny someone their business and go elsewhere. What would this look like here? Would one be in the back of an ambulance doing price shopping on a tablet as they are fighting some terrible injury? Perhaps tie in different billing departments in a conference call as they bid over who will do the critically urgent surgery as the patient slides in and out of consciousness? Maybe decide to have a heart attack during a winter sale special or reach into their dresser to get a coupon out as they collapse to the floor? Or would someone be placed on a transportable life support system as they get ferried across a city deal hunting by having different procedures at different institutions, expecting them to talk to each other and string together piecemeal lab results for a coherent diagnosis? Maybe someone would do the work beforehand, search all the popular ailments and their procedures and then do price shopping in good health and prepare an execution plan if they fall ill? Maybe there's a non-absurd example, but I honestly can't think of it. The competition mechanism seems to be a completely unrealistic application.

tertius 8y ago
Ambulance staff are incentivized by pretty nurses and free food/snacks. Ask any paramedic in a city with enough choice of hospitals and they'll tell you. What is the best answer to the "emergency care competition" that you've found? And what proportion of medical spending is on emergency vs. not?
- kristopolous 8y ago
  Even in non-emergency care, perfect competition requires perfect knowledge (the consumer to know medical knowledge), perfect information (knowing the exact quality of care from all competitors beforehand), rational buyers (having no preexisting biases based on irrational cognition), no barriers to entry or exit (ie, being able to switch hospitals mid stream), no network effect (the previous state...eg who does the lab work, shouldn't have an outsize influence on the subsequent, eg who does the diagnosis... See dollar auction for an extreme example https://en.m.wikipedia.org/wiki/Dollar_auction https://en.m.wikipedia.org/wiki/Dollar_auction) and a variety of other fairly unachievable factors which do not apply here. It's not a good model to structure the allocation in this particular instance, too many conditions are nearly impossible to satisfy. It's not a sensible way to design this market.
  - deleted 8y ago
    [deleted]
  - tertius 8y ago
    Perfect competition? There is no such thing in practice. Also potentially a way to outsource this to a group with better knowledge. Dentistry is a good example of competitive service, eye care is as well. And negotiation is normal. You're moving the goal posts in the right direction, but to the edge.
    - kristopolous 8y ago
      Plenty of things are pretty close to perfect competition Grocery stores, sandwich shops, coffee houses, clothing stores, coin laundromats, circuit design, postal carriers, kitchen utensils and serving equipment, rental cars, housekeeping things like brooms and dustpans, bouquets and flowers, nuts bolts and fasteners, airlines... Essentially anything where the brands are fairly indistinguishable and you have a hard time separating them. That's competition working. Eyeglasses are probably one of the closest in medical. Common medicines like lactase, dextromethorphan and acetaminophen also score high.
      - jmalicki 8y ago
        Airlines are definitely not an example of perfect competition. They are the number one textbook example of oligopolistic competition leading to price discrimination. A given route between two cities only has so many airlines competing. They just have a tough time surviving because airports are monopolies (except in some major metros where there is limited competition), thus can capture most of the airlines' profits.
      - drewg123 8y ago
        Eyeglasses, at least, are a monopoly controlled by one company, Luxottica. See https://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-four-eyed-eight-tentacled-monopoly-that-is-making-your-glasses-so-expensive/#24c58406b66b https://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-...
- onetimemanytime 8y ago
  >>What is the best answer to the "emergency care competition" that you've found? Pay what the insurance or medicare pays, plus a capped xx% because they got a volume discount. By law hospitals have to stabilize you, can't let you die, money or no money. (I know they have been cases of trying to dump patients but...) So you saved me, but how did you come up with the $455,000 bill? We entered into a contract without prices, so the prices should be customary. 5-10X what insurance pays isn't fair.
  - tertius 8y ago
    I meant the best answer to the "there is no competition in emergency care" objection. Is there a current good answer to a consumer having the ability to competitively (without too much work) receive emergency care?
    - kristopolous 8y ago
      You could do limited supply side bidding and some of that already happens, but proximity to care matters so much that I think structuring it like all the other emergency services (such as police and fire) is probably the right way to go. Urgency is the only maximizing function.
      - onetimemanytime 8y ago
        Public utility, no competition for emergency given how it works. Nose job or breast implants are another thing. Emergency prices linked to Medicare. But then, I can imagine them charging, say, $3800 to stabilize you with whatever surgery (there goes the urgency) and start billing you normally for the rest of the care. They'll make it back and then some.
deleted 8y ago
[deleted]
MarkMc 8y ago
Even if you limit competition among hospitals to non-emergency procedures, it would still be enormously beneficial. But even with emergency procedures I think you could still have effective competition based on outcomes and price. Here's an article suggesting that in some cases a poor quality hospital will triple your chance of death compared to a good hospital [0]. With more data, I could imagine a study that says, "Hospital B is so much worse for treating heart attacks than Hospital A that it is equivalent to delaying treatment by 20-25 minutes". Paramedics treating a heart attack victim would therefore have a fairly simple calculation: What is the difference between estimated time taken to reach Hospital A and estimated time taken to reach Hospital B? If more than 25 minutes you choose hospital B, if less than 20 minutes you choose Hospital A, and if between 20 and 25 minutes you choose whichever hospital historically charges the least for heart attack treatment. [0] http://www.nytimes.com/2016/12/14/business/hospitals-death-rates-quality-vary-widely.html?src=me http://www.nytimes.com/2016/12/14/business/hospitals-death-r...

tertius 8y ago

Ambulance staff are incentivized by pretty nurses and free food/snacks. Ask any paramedic in a city with enough choice of hospitals and they'll tell you. What is the best answer to the "emergency care competition" that you've found? And what proportion of medical spending is on emergency vs. not?

kristopolous 8y ago
Even in non-emergency care, perfect competition requires perfect knowledge (the consumer to know medical knowledge), perfect information (knowing the exact quality of care from all competitors beforehand), rational buyers (having no preexisting biases based on irrational cognition), no barriers to entry or exit (ie, being able to switch hospitals mid stream), no network effect (the previous state...eg who does the lab work, shouldn't have an outsize influence on the subsequent, eg who does the diagnosis... See dollar auction for an extreme example https://en.m.wikipedia.org/wiki/Dollar_auction https://en.m.wikipedia.org/wiki/Dollar_auction) and a variety of other fairly unachievable factors which do not apply here. It's not a good model to structure the allocation in this particular instance, too many conditions are nearly impossible to satisfy. It's not a sensible way to design this market.
- deleted 8y ago
  [deleted]
- tertius 8y ago
  Perfect competition? There is no such thing in practice. Also potentially a way to outsource this to a group with better knowledge. Dentistry is a good example of competitive service, eye care is as well. And negotiation is normal. You're moving the goal posts in the right direction, but to the edge.
  - kristopolous 8y ago
    Plenty of things are pretty close to perfect competition Grocery stores, sandwich shops, coffee houses, clothing stores, coin laundromats, circuit design, postal carriers, kitchen utensils and serving equipment, rental cars, housekeeping things like brooms and dustpans, bouquets and flowers, nuts bolts and fasteners, airlines... Essentially anything where the brands are fairly indistinguishable and you have a hard time separating them. That's competition working. Eyeglasses are probably one of the closest in medical. Common medicines like lactase, dextromethorphan and acetaminophen also score high.
    - jmalicki 8y ago
      Airlines are definitely not an example of perfect competition. They are the number one textbook example of oligopolistic competition leading to price discrimination. A given route between two cities only has so many airlines competing. They just have a tough time surviving because airports are monopolies (except in some major metros where there is limited competition), thus can capture most of the airlines' profits.
    - drewg123 8y ago
      Eyeglasses, at least, are a monopoly controlled by one company, Luxottica. See https://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-four-eyed-eight-tentacled-monopoly-that-is-making-your-glasses-so-expensive/#24c58406b66b https://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-...
onetimemanytime 8y ago
>>What is the best answer to the "emergency care competition" that you've found? Pay what the insurance or medicare pays, plus a capped xx% because they got a volume discount. By law hospitals have to stabilize you, can't let you die, money or no money. (I know they have been cases of trying to dump patients but...) So you saved me, but how did you come up with the $455,000 bill? We entered into a contract without prices, so the prices should be customary. 5-10X what insurance pays isn't fair.
- tertius 8y ago
  I meant the best answer to the "there is no competition in emergency care" objection. Is there a current good answer to a consumer having the ability to competitively (without too much work) receive emergency care?
  - kristopolous 8y ago
    You could do limited supply side bidding and some of that already happens, but proximity to care matters so much that I think structuring it like all the other emergency services (such as police and fire) is probably the right way to go. Urgency is the only maximizing function.
    - onetimemanytime 8y ago
      Public utility, no competition for emergency given how it works. Nose job or breast implants are another thing. Emergency prices linked to Medicare. But then, I can imagine them charging, say, $3800 to stabilize you with whatever surgery (there goes the urgency) and start billing you normally for the rest of the care. They'll make it back and then some.

deleted 8y ago

[deleted]

MarkMc 8y ago

Even if you limit competition among hospitals to non-emergency procedures, it would still be enormously beneficial. But even with emergency procedures I think you could still have effective competition based on outcomes and price. Here's an article suggesting that in some cases a poor quality hospital will triple your chance of death compared to a good hospital [0]. With more data, I could imagine a study that says, "Hospital B is so much worse for treating heart attacks than Hospital A that it is equivalent to delaying treatment by 20-25 minutes". Paramedics treating a heart attack victim would therefore have a fairly simple calculation: What is the difference between estimated time taken to reach Hospital A and estimated time taken to reach Hospital B? If more than 25 minutes you choose hospital B, if less than 20 minutes you choose Hospital A, and if between 20 and 25 minutes you choose whichever hospital historically charges the least for heart attack treatment. [0] http://www.nytimes.com/2016/12/14/business/hospitals-death-rates-quality-vary-widely.html?src=me http://www.nytimes.com/2016/12/14/business/hospitals-death-r...