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> Personal responsibility is "hard" so no wonder those who tend to outsource it get fleeced. What is the effect on the market when everyone engages in "persona

by geofft 8y ago

> Personal responsibility is "hard" so no wonder those who tend to outsource it get fleeced. What is the effect on the market when everyone engages in "personal responsibility"? If everyone finds out about Lenox Hill Radiology and goes there instead of to hospitals for MRI, won't the effect be that demand goes up without supply obviously going up, causing increased prices and wait times? What will be the effect on hospitals that were subsidizing their other business by pricing their MRIs higher? The reason people don't like "personal responsibility" as a general-case solution is not that it's hard, but that it's not a general-case solution. This article is talking about an actual general-case solution.

DuskStar 8y ago
Or the effect could be that Lenox Hill Radiology discovers it's getting a ton of MRI patients, has utilization above 85%, and can now afford to get another machine. A group doing a thing well getting more business is typically not a bad thing. Yes, if it's a loss leader then bad things can happen - but that doesn't seem to be the case here. "Personal Responsibility" is just "making the market actually be a market". Markets are great - but situations where the person paying isn't the person choosing or receiving the benefit tend to be horrible in some dimension.
notyourday 8y ago
> What is the effect on the market when everyone engages in "personal responsibility"? If everyone finds out about Lenox Hill Radiology and goes there instead of to hospitals for MRI, won't the effect be that demand goes up without supply obviously going up, causing increased prices and wait times? The current situation for the same MRI is: Mount Sinai - cost $2800, wait to schedule 5 days, wait for read out 5 more days. Lennox Hill - cost $600, wait to schedule ~1.5 hours, wait for read out, next business day. Distance between two locations: opposite side of an avenue and half a block. Realized savings by crossing a road: $2,200. Where else is it possible for two identical products to be offered in that close proximity at that kind of a price difference and have people defend the pricing of the more expensive one while complaining that the services that include this product cost too much? But here's what I think should happen: Lennox Hill would slowly increase its prices and Mount Sinai would drop its prices until it would not be possible to save $2,200 by crossing an Ave and walking for five minutes. Of course if we are to look around this is not current more likely outcome - rather Mount Sinai would buy Lennox Hill Radiology which is an independent radiology center, make it a part of the Mount Sinai hospital chain and increase Lennox Hill' price to whatever level that it currently charges ( hospital chains have been buying up independent centers hurting their cash cows for years ). Unfortunately for hospital chains radiology centers now are a proven way to make money so new ones are popping up more and more. > What will be the effect on hospitals that were subsidizing their other business by pricing their MRIs higher? I have never heard of this argument being used by any of the hospital chains to justify high prices for the services that can be done out of hospital and it is definitely the kind of argument that should get traction had it been possible for any hospital to bend some numbers to make it remotely plausible so I would say it is unlikely to be the case.

by geofft 8y ago

DuskStar 8y ago

Or the effect could be that Lenox Hill Radiology discovers it's getting a ton of MRI patients, has utilization above 85%, and can now afford to get another machine. A group doing a thing well getting more business is typically not a bad thing. Yes, if it's a loss leader then bad things can happen - but that doesn't seem to be the case here. "Personal Responsibility" is just "making the market actually be a market". Markets are great - but situations where the person paying isn't the person choosing or receiving the benefit tend to be horrible in some dimension.

notyourday 8y ago

> What is the effect on the market when everyone engages in "personal responsibility"? If everyone finds out about Lenox Hill Radiology and goes there instead of to hospitals for MRI, won't the effect be that demand goes up without supply obviously going up, causing increased prices and wait times? The current situation for the same MRI is: Mount Sinai - cost $2800, wait to schedule 5 days, wait for read out 5 more days. Lennox Hill - cost $600, wait to schedule ~1.5 hours, wait for read out, next business day. Distance between two locations: opposite side of an avenue and half a block. Realized savings by crossing a road: $2,200. Where else is it possible for two identical products to be offered in that close proximity at that kind of a price difference and have people defend the pricing of the more expensive one while complaining that the services that include this product cost too much? But here's what I think should happen: Lennox Hill would slowly increase its prices and Mount Sinai would drop its prices until it would not be possible to save $2,200 by crossing an Ave and walking for five minutes. Of course if we are to look around this is not current more likely outcome - rather Mount Sinai would buy Lennox Hill Radiology which is an independent radiology center, make it a part of the Mount Sinai hospital chain and increase Lennox Hill' price to whatever level that it currently charges ( hospital chains have been buying up independent centers hurting their cash cows for years ). Unfortunately for hospital chains radiology centers now are a proven way to make money so new ones are popping up more and more. > What will be the effect on hospitals that were subsidizing their other business by pricing their MRIs higher? I have never heard of this argument being used by any of the hospital chains to justify high prices for the services that can be done out of hospital and it is definitely the kind of argument that should get traction had it been possible for any hospital to bend some numbers to make it remotely plausible so I would say it is unlikely to be the case.