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American healthcare is nowhere close to a "free market". Have you noticed how there are next to no startups disrupting the health industry? Why can't you sign

American healthcare is nowhere close to a "free market". Have you noticed how there are next to no startups disrupting the health industry? Why can't you sign up for insurance like you can sign up for a stock account on RobinHood? There's no free market. Government licensing and regulations have created huge barriers to entry. I thought this would be more understood by those technically/entrepreneurially minded. When things are too expensive, you need to raise the supply to get the price down. Not create price controls and socialize markets. Read this article because it explains the problem better than I can. https://hbr.org/2004/06/redefining-competition-in-health-care https://hbr.org/2004/06/redefining-competition-in-health-car...

nabla9 8y ago
Free market and well functioning market are not synonyms. Healthcare economy is naturally inefficient if free. Information asymmetries and other market failures emerge without good regulation and mechanism design.
- cteague 8y ago
  Every market has information asymmetry. Software is probably the biggest one today. Yet software keeps getting better and better... I agree there are needs for regulations--more like proper norms though and a good tort system.
  - hannasanarion 8y ago
    No it doesn't. You can negotiate the price of software before you buy it, and you can shop around and choose between alternatives, or choose not to buy at all. If you need a piece of rebar removed from your chest, then you need a piece of rebar removed from your chest. The price doesn't matter, the choice of provider doesn't matter. The "consumer" is completely at the whim of whatever provider happens to be closest. That's not how free markets are supposed to work.
    - dsfyu404ed 8y ago
      There's plenty of industries where the customer often needs something done quickly or in an emergency and they still don't get screwed like they do in medical. Plumbers, septic pumping, auto repair, all have a substantial portion of their customers needing "emergency" services that they could charge whatever they want for. They don't though because there's price transparency and if you get screwed you'll never call them again and tell all your friends they ripped you off. With medical there's no way to know when you got ripped off because prices vary wildly for the same services and there's no price transparency. If I broke my leg doing something stupid you can bet your ass I'd call around and get quotes if I could. It only takes ~10min, far less than the EMT response time where I live. The problem is I can't even get quotes. Sometimes you have no options and you get screwed but the vast majority of medical care is not people who will bleed out if they don't go to the nearest hospital ASAP. If normal services didn't cost an arm and a leg and you could reasonably shop around then healthcare and therefore health insurance wouldn't cost nearly as much because the lions share of services would be priced competitively. Furthermore, price transparency is not incompatible with any other approach to healthcare since that information necessarily needs to exist.
      - dragonwriter 8y ago
        > If I broke my leg doing something stupid you can bet your ass I'd call around and get quotes if I could. Quotes for...what? Even with price transparency on actual services, “I broke my leg” doesn't tell you with much specificity what services you need. And that's not even to discuss, “I'm having chest pain and dizziness”.
        dsfyu404ed 8y ago
        >Quotes for...what? Even with price transparency on actual services, “I broke my leg” doesn't tell you with much specificity what services you need. And that's not even to discuss, “I'm having chest pain and dizziness”. Sounds a lot like "my car is making a funny noise" or "my septic is backed up". Diagnosis should be cheap/free depending on how involved it is and then you get a quote for how much it will cost to fix and the quote usually includes some language like "and if X happens we'll stop work and call you/charge X to fix it as well". Figuring out what work needs to be done based on vague descriptions by people who don't know the subject matter is what professionals do. I don't see why doctors should be held to a lower standard.
matthewdgreen 8y ago
We know that there is an efficient model for delivering healthcare, which is a government provided/heavily-regulated healthcare market. We know this because dozens of industrialized nations successfully operate in this model, with dramatically lower costs than we have here in the US. An existence proof is usually the simplest kind of proof. Some people talk about a hypothetical second workable model, which involves a massively de-regulated free market system. It's important to note that nobody has successfully deployed this model in an industrialized nation, and it's not clear if it can even be implemented in practice -- for political as well as practical reasons (unregulated medical providers tend to kill people, so voters enact regulations, and then you're on your way out of the sweet spot.) Whatever your preferences, the important thing to keep in mind is that while both of these two points may exist, the points between them are highly suboptimal. Removing 10% or even 50% of the regulations on our current healthcare system is unlikely to produce a substantially more efficient system. It produces a new system with most of the weaknesses and entry-barriers of our current approach, but replete with massive new profit-taking opportunities and substantially worse protection for patients. This is why two decades of political infighting in the US have failed to fix healthcare. There is literally zero chance that the working, de-regulated system is going to come into existence. There is some probability that we can get closer to regulated single-payer, since we already have Medicare and it's much more efficient than private insurance, even though politicians have restricted its bargaining power. There is an overwhelming probability that in the process of trying to deregulate the current system, you end up making everything substantially worse.
- bko 8y ago
  The US already spends a large percentage of GDP on public health care (medicare and medicaid). It's just that it spends much more in private on top of that. I quickly found some numbers from 2008. All numbers are a percentage of GDP: US: 7.4% public, 8.5% private Switzerland: 6.3% public, 4.4% private Sweden: 7.7% public, 1.7% private France: 8.7% public, 2.5% private graphic: https://kaiserfamilyfoundation.files.wordpress.com/2011/04/health-care-spending-in-the-united-states-selected-oecd-countries_chart10.gif?w=675&h=349&zoom=2 https://kaiserfamilyfoundation.files.wordpress.com/2011/04/h... kff study: https://www.kff.org/health-costs/issue-brief/snapshots-health-care-spending-in-the-united-states-selected-oecd-countries/ https://www.kff.org/health-costs/issue-brief/snapshots-healt...
bko 8y ago
I would also add that the parent post is internally inconsistent. >> The goal for American healthcare companies is increasing shareholder value, not reducing costs Reducing costs increases shareholder value. The shareholders don't benefit from these inflated administrative costs. This is money that could be converted to profit and distributed to shareholders. This suggests something else is going on

nabla9 8y ago

Free market and well functioning market are not synonyms. Healthcare economy is naturally inefficient if free. Information asymmetries and other market failures emerge without good regulation and mechanism design.

cteague 8y ago
Every market has information asymmetry. Software is probably the biggest one today. Yet software keeps getting better and better... I agree there are needs for regulations--more like proper norms though and a good tort system.
- hannasanarion 8y ago
  No it doesn't. You can negotiate the price of software before you buy it, and you can shop around and choose between alternatives, or choose not to buy at all. If you need a piece of rebar removed from your chest, then you need a piece of rebar removed from your chest. The price doesn't matter, the choice of provider doesn't matter. The "consumer" is completely at the whim of whatever provider happens to be closest. That's not how free markets are supposed to work.
  - dsfyu404ed 8y ago
    There's plenty of industries where the customer often needs something done quickly or in an emergency and they still don't get screwed like they do in medical. Plumbers, septic pumping, auto repair, all have a substantial portion of their customers needing "emergency" services that they could charge whatever they want for. They don't though because there's price transparency and if you get screwed you'll never call them again and tell all your friends they ripped you off. With medical there's no way to know when you got ripped off because prices vary wildly for the same services and there's no price transparency. If I broke my leg doing something stupid you can bet your ass I'd call around and get quotes if I could. It only takes ~10min, far less than the EMT response time where I live. The problem is I can't even get quotes. Sometimes you have no options and you get screwed but the vast majority of medical care is not people who will bleed out if they don't go to the nearest hospital ASAP. If normal services didn't cost an arm and a leg and you could reasonably shop around then healthcare and therefore health insurance wouldn't cost nearly as much because the lions share of services would be priced competitively. Furthermore, price transparency is not incompatible with any other approach to healthcare since that information necessarily needs to exist.
    - dragonwriter 8y ago
      > If I broke my leg doing something stupid you can bet your ass I'd call around and get quotes if I could. Quotes for...what? Even with price transparency on actual services, “I broke my leg” doesn't tell you with much specificity what services you need. And that's not even to discuss, “I'm having chest pain and dizziness”.
      - dsfyu404ed 8y ago
        >Quotes for...what? Even with price transparency on actual services, “I broke my leg” doesn't tell you with much specificity what services you need. And that's not even to discuss, “I'm having chest pain and dizziness”. Sounds a lot like "my car is making a funny noise" or "my septic is backed up". Diagnosis should be cheap/free depending on how involved it is and then you get a quote for how much it will cost to fix and the quote usually includes some language like "and if X happens we'll stop work and call you/charge X to fix it as well". Figuring out what work needs to be done based on vague descriptions by people who don't know the subject matter is what professionals do. I don't see why doctors should be held to a lower standard.

matthewdgreen 8y ago

We know that there is an efficient model for delivering healthcare, which is a government provided/heavily-regulated healthcare market. We know this because dozens of industrialized nations successfully operate in this model, with dramatically lower costs than we have here in the US. An existence proof is usually the simplest kind of proof. Some people talk about a hypothetical second workable model, which involves a massively de-regulated free market system. It's important to note that nobody has successfully deployed this model in an industrialized nation, and it's not clear if it can even be implemented in practice -- for political as well as practical reasons (unregulated medical providers tend to kill people, so voters enact regulations, and then you're on your way out of the sweet spot.) Whatever your preferences, the important thing to keep in mind is that while both of these two points may exist, the points between them are highly suboptimal. Removing 10% or even 50% of the regulations on our current healthcare system is unlikely to produce a substantially more efficient system. It produces a new system with most of the weaknesses and entry-barriers of our current approach, but replete with massive new profit-taking opportunities and substantially worse protection for patients. This is why two decades of political infighting in the US have failed to fix healthcare. There is literally zero chance that the working, de-regulated system is going to come into existence. There is some probability that we can get closer to regulated single-payer, since we already have Medicare and it's much more efficient than private insurance, even though politicians have restricted its bargaining power. There is an overwhelming probability that in the process of trying to deregulate the current system, you end up making everything substantially worse.

bko 8y ago
The US already spends a large percentage of GDP on public health care (medicare and medicaid). It's just that it spends much more in private on top of that. I quickly found some numbers from 2008. All numbers are a percentage of GDP: US: 7.4% public, 8.5% private Switzerland: 6.3% public, 4.4% private Sweden: 7.7% public, 1.7% private France: 8.7% public, 2.5% private graphic: https://kaiserfamilyfoundation.files.wordpress.com/2011/04/health-care-spending-in-the-united-states-selected-oecd-countries_chart10.gif?w=675&h=349&zoom=2 https://kaiserfamilyfoundation.files.wordpress.com/2011/04/h... kff study: https://www.kff.org/health-costs/issue-brief/snapshots-health-care-spending-in-the-united-states-selected-oecd-countries/ https://www.kff.org/health-costs/issue-brief/snapshots-healt...

bko 8y ago

I would also add that the parent post is internally inconsistent. >> The goal for American healthcare companies is increasing shareholder value, not reducing costs Reducing costs increases shareholder value. The shareholders don't benefit from these inflated administrative costs. This is money that could be converted to profit and distributed to shareholders. This suggests something else is going on