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>Why aren't there more Hospitals? In most states building or expanding a hospital requires getting a Certificate of Need establishing that you won't be competi

>Why aren't there more Hospitals? In most states building or expanding a hospital requires getting a Certificate of Need establishing that you won't be competing with existing providers. >Why aren't more companies producing medical goods? If you're competing with one of the big guys and they don't like you they can find some FDA reg you might plausibly be violating and sue the FDA to get them to shut you down. They generally have more expensive lawyers than the FDA can afford so they'll often get their way if their case it even only vaguely plausible. Or at least this is why the US doesn't have epinephrine injectors competing with EpiPen, I'm not sure it's the main reason. The same feedback-by-lawsuit mechanisms work fairly well in other regulatory contexts, though. >Why aren't there more insurance providers. Insurance provider profits are capped by law so I'm not sure adding more of them would actually help. Especially since they all have a pretty hefty fixed overhead in terms of negotiating rates with hospitals.

basch 8y ago
> Insurance provider profits are capped by law Doesn't that give them incentive to make things cost more, as their profit is capped as a percentage? "Oh I can only have 2% profit, fine we will lobby and push for new tech that make surgery b cost 10x as much.
Symmetry 8y ago
A lot of the restrictions on supply in the US medical system were actually put there as a way to keep down costs, especially by the Nixon administration. Ideally you would find some way to lower the price of a unit of medical care but that would tend to lower doctors' and nurses' wages and the public likes doctors more than politicians so that wouldn't have been the easy way. If your only concern is lowering spending then restricting supply will in fact do that. Per unit cost will go up but the total amount that the public would be willing to pay for a low supply is lower than what the public would pay for a high supply. It's just that other politicians saw the problem with limited access and decided to solve it by subsidizing healthcare or in some cases just paying for it. Removing restrictions on supply would, again, have cut into doctors' and nurses' wages. The US government requires hospitals to treat the indigent for free and to treat Medicare recipients at cost but that just means that the hospital has to make back its costs elsewhere if it wants to stay in business. I'm honestly half convinced that the only way we'll ever fix our mess is nationalization. But because the government finds it so hard to cut wages and because it also finds it hard to appoint "death panels" to decide which treatments are cost effective I'm doubtful that even that will do much to hold down costs.

basch 8y ago

> Insurance provider profits are capped by law Doesn't that give them incentive to make things cost more, as their profit is capped as a percentage? "Oh I can only have 2% profit, fine we will lobby and push for new tech that make surgery b cost 10x as much.

Symmetry 8y ago

A lot of the restrictions on supply in the US medical system were actually put there as a way to keep down costs, especially by the Nixon administration. Ideally you would find some way to lower the price of a unit of medical care but that would tend to lower doctors' and nurses' wages and the public likes doctors more than politicians so that wouldn't have been the easy way. If your only concern is lowering spending then restricting supply will in fact do that. Per unit cost will go up but the total amount that the public would be willing to pay for a low supply is lower than what the public would pay for a high supply. It's just that other politicians saw the problem with limited access and decided to solve it by subsidizing healthcare or in some cases just paying for it. Removing restrictions on supply would, again, have cut into doctors' and nurses' wages. The US government requires hospitals to treat the indigent for free and to treat Medicare recipients at cost but that just means that the hospital has to make back its costs elsewhere if it wants to stay in business. I'm honestly half convinced that the only way we'll ever fix our mess is nationalization. But because the government finds it so hard to cut wages and because it also finds it hard to appoint "death panels" to decide which treatments are cost effective I'm doubtful that even that will do much to hold down costs.