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The thing about employer-funded healthcare after WWII is that for a few decades, that health care was restricted to the Blue Cross/Blueso Shield monopoly [1], w

The thing about employer-funded healthcare after WWII is that for a few decades, that health care was restricted to the Blue Cross/Blueso Shield monopoly [1], which functioned as a semi-socialized monopolies in the sense that network members would take anyone and prices were somewhat controlled. This situation gradually broke down in the 1970s and 80s as other insurance companies entered the health care field and offered insurance to only the healthiest individuals. Eventually, Blue Cross' nonprofit status was revoked and insurance became a free-for-all (where those with existing conditions were effectively thrown under the bus). People don't realize that a lot of American industry in 1960s and 70s was "regulated monopolies" (Health care, airlines, trucking, telephone, etc). These provide a lot of the benefits that social democracy provides in Europe but was less obviously "socialized". And similarly, the huge sea change that happened with Reagan breaking regulated industries wasn't and isn't noticed as the huge change that it was (and it is still reverberating through this society). The thing is, health care is "natural monopoly", it's a situation where competition is meaningless at the point when a person shows up bleed at the emergency room. The process of "opening health care for competition" from the 1970s onward grew a hundred poisonous rent-seeks in every part of supply chain, from medical equipment operators to hospitals to insurance companies. Blaming just insurance companies is a bit misguided after all this. Certainly they play a part but the basic structure of private health care just naturally goes this way unless it either seriously regulated or nationalized. [1] https://en.wikipedia.org/wiki/Blue_Cross_Blue_Shield_Association#History https://en.wikipedia.org/wiki/Blue_Cross_Blue_Shield_Associa...

krupan 8y ago
"The thing is, health care is 'natural monopoly', it's a situation where competition is meaningless at the point when a person shows up bleed at the emergency room." This is a bit of a false narrative. 99% of healthcare is not emergency room, imminent bleeding out. I believe we should have government provided true emergency care for everyone (just like we have fire and police, right?), but for non-emergency stuff (which is most of healthcare), people do have time to shop around and find the best deal for them. The best deal might involve joining a health club like Aetna or Kaiser (these are not insurance, by the way), or it might be saving your money in a bank and paying for stuff piece by piece by yourself, just like we do for just about everything else we need to survive in this world.
- peteey 8y ago
  The bleeding example makes costs seems like random accidents, but most spending is on genetic illness and the elderly. A lifetime supply of insulin is much more expensive than setting a broken bone. We are not all equally likely to have cancer or respiratory disease.
  - krupan 8y ago
    Supply and demand should take care of this though. A lifetime supply of food is pretty reasonable these days. A lifetime supply of common medications should be about the same, right? Too much regulation restricts supply and too much health care bureaucracy screws up demand. Of course people should still have insurance (possibly government provided?) for the very rare and expensive surprises (just like a house fire is rare and expensive).
    - jwbwater 8y ago
      Much easier for consumers to control food spending than drug spending. Lots of cheap food to choose from. Many chronic illnesses require medications for which there is no good substitute. Too much regulation is not responsible for high drug prices, deregulation is. Companies are allowed to buy their competitors and then raise prices.
      - bhupy 8y ago
        Okay then what’s stopping someone from starting another company and selling the same product at a lower price?
        mvid 8y ago
        Entry costs, regulatory capture, intellectual property?
        bhupy 8y ago
        > Too much regulation is not responsible for high drug prices, deregulation is > regulatory capture, intellectual property Ostensibly would seem that relaxing regulation and (more importantly) abolishing or heavily weakening medical patents would help drive down costs. Can you imagine if tech companies could patent their products the same way medical companies do today? Uber would no longer have to worry about finding a moat, their moat would simply be their patent on "digital ride sharing provided by dynamic pricing to predict demand and position supply" (or some similar conceit). Smartphones would all be expensive and Apple would have a monopoly on multi-touch phones with capacitive displays and built-in app-stores. If food companies could patent food the same way drug companies can patent drugs that they prepare, bread would be expensive and you wouldn't have store brands and generics to keep the price of the fancy Whole Foods bread in check.
wuliwong 8y ago
>The thing is, health care is "natural monopoly", it's a situation where competition is meaningless at the point when a person shows up bleed at the emergency room Your natural monopoly claim is incorrect. People have choices as to where they get their healthcare, at least in the US. You can always claim a monopoly if you make the criteria strict enough but obviously in the US today people have a great deal of choice as to which healthcare providers they use. Even in an emergency (at least in larger metro areas) ambulances actually have choices as to which hospital they take the patient. >The thing about employer-funded healthcare after WWII is that for a few decades, that health care was restricted to the Blue Cross/Blueso Shield monopoly [1] You link to a wikipedia article which says > In the 1960s the U.S. government chose to partner with Blue Cross and Blue Shield companies to administer Medicare.[6] What about the 20 years before that?
- QuercusMax 8y ago
  If somebody finds me unconscious on the sidewalk, bleeding from a head wound, they're going to rifle through my belongings to find my insurance card, and then magically know which ER to take me to?

krupan 8y ago

"The thing is, health care is 'natural monopoly', it's a situation where competition is meaningless at the point when a person shows up bleed at the emergency room." This is a bit of a false narrative. 99% of healthcare is not emergency room, imminent bleeding out. I believe we should have government provided true emergency care for everyone (just like we have fire and police, right?), but for non-emergency stuff (which is most of healthcare), people do have time to shop around and find the best deal for them. The best deal might involve joining a health club like Aetna or Kaiser (these are not insurance, by the way), or it might be saving your money in a bank and paying for stuff piece by piece by yourself, just like we do for just about everything else we need to survive in this world.

peteey 8y ago
The bleeding example makes costs seems like random accidents, but most spending is on genetic illness and the elderly. A lifetime supply of insulin is much more expensive than setting a broken bone. We are not all equally likely to have cancer or respiratory disease.
- krupan 8y ago
  Supply and demand should take care of this though. A lifetime supply of food is pretty reasonable these days. A lifetime supply of common medications should be about the same, right? Too much regulation restricts supply and too much health care bureaucracy screws up demand. Of course people should still have insurance (possibly government provided?) for the very rare and expensive surprises (just like a house fire is rare and expensive).
  - jwbwater 8y ago
    Much easier for consumers to control food spending than drug spending. Lots of cheap food to choose from. Many chronic illnesses require medications for which there is no good substitute. Too much regulation is not responsible for high drug prices, deregulation is. Companies are allowed to buy their competitors and then raise prices.
    - bhupy 8y ago
      Okay then what’s stopping someone from starting another company and selling the same product at a lower price?
      - mvid 8y ago
        Entry costs, regulatory capture, intellectual property?
        bhupy 8y ago
        > Too much regulation is not responsible for high drug prices, deregulation is > regulatory capture, intellectual property Ostensibly would seem that relaxing regulation and (more importantly) abolishing or heavily weakening medical patents would help drive down costs. Can you imagine if tech companies could patent their products the same way medical companies do today? Uber would no longer have to worry about finding a moat, their moat would simply be their patent on "digital ride sharing provided by dynamic pricing to predict demand and position supply" (or some similar conceit). Smartphones would all be expensive and Apple would have a monopoly on multi-touch phones with capacitive displays and built-in app-stores. If food companies could patent food the same way drug companies can patent drugs that they prepare, bread would be expensive and you wouldn't have store brands and generics to keep the price of the fancy Whole Foods bread in check.

wuliwong 8y ago

>The thing is, health care is "natural monopoly", it's a situation where competition is meaningless at the point when a person shows up bleed at the emergency room Your natural monopoly claim is incorrect. People have choices as to where they get their healthcare, at least in the US. You can always claim a monopoly if you make the criteria strict enough but obviously in the US today people have a great deal of choice as to which healthcare providers they use. Even in an emergency (at least in larger metro areas) ambulances actually have choices as to which hospital they take the patient. >The thing about employer-funded healthcare after WWII is that for a few decades, that health care was restricted to the Blue Cross/Blueso Shield monopoly [1] You link to a wikipedia article which says > In the 1960s the U.S. government chose to partner with Blue Cross and Blue Shield companies to administer Medicare.[6] What about the 20 years before that?

QuercusMax 8y ago
If somebody finds me unconscious on the sidewalk, bleeding from a head wound, they're going to rifle through my belongings to find my insurance card, and then magically know which ER to take me to?