5 ms·

> You're describing inelasticity of demand, which has nothing to do with whether or not a market is free in the economic sense (that is, whether supplier compet

> You're describing inelasticity of demand, which has nothing to do with whether or not a market is free in the economic sense (that is, whether supplier competition and consumer substitution are possible) Next time when a bone in broken in your body, go comparison shopping because it's a free market and you should get the best deal while your bones hang freely. Health care is a special case not comparable with any other market.

jyrkesh 7y ago
It's semantics, but they're important when you're talking about economics. You're describing inelasticity of demand, which is to say that I need the good irrespective of the price (and it may mean irrespective of the geographic inefficiency). In a free market, I can open a hospital across the street from your hospital and charge whatever I want for similar (or completely different) services. Presumably, our hospitals would also have a brand reputation: I know lots of folks who say "I'll never go to X HMO again, it's so much better at Y public hospital" and would gladly drive an extra mile or two with their broken arm kid if it means they're fairly certain they'll save a few grand (or more). A similar example is that I'm halfway down a 200 mile highway, and I need gasoline. There could be one gas station, there could be five, but the fact that I'm allowed to open a gas station next to the sole one that exists means it's a free market. If the government says "there shall be one [or two, or ten]" gas stations here, or that "all gas stations here shall charge this rate", then it's less of a free market. You may be trying to describe the concept of perfect competition[1]. If so, I'd agree with you that health care can almost never achieve perfect competition because perfect information becomes harder to obtain as situations become more expedient or dire. [1] https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
Fjolsvith 7y ago
In my community in western Kansas, there are two hospitals nearly equidistant from us. An ambulance crew asks which one do we want to go to. Why would cost not play a role in that decision?
- jjwhitaker 7y ago
  Cost should play a role but I don't think it should ever cross your mind or need to be a decision you have to make. In your anecdotal situation let's say you fell and broke your arm and are now sitting in the back of the ambulance when they ask that question. North or South hospital? With your one good arm are will you load up a cost comparison of services between the hospitals, checking what the procedure might be if the break is impacted, if muscle tissue is torn or needs to be repaired surgically, what followups or cast removal costs, and building a spreadsheet of possible scenarios based on the underlying medical statistics combined with the risk factors of your incident? Ar you comparing that against hospital ratings for those departments and doctors and their success rates combined with education or training in line with best practices or regulations? Then are you compiling this data to make a decision based on which hospital is the most viable economically vs the standard of care for your suspected injury and reaching a decision? Are you going to do this for every viable healthcare situation in advance so you're aware of updated costs at South or the new star surgeon hired at North hospital? There's certainly a market for that analysis but I don't think it's analogous to real life. Most people are going to call 911, get in the ambulance if needed, and go to the closest hospital with capacity. The price, quality, and other checks need to happen at a higher level while still be transparent and open. Medicare has tools to solve this just like how the FDA us meant to resolve food safety questions and other governing bodies are there to regulate and enforce standards. Unfortunately it's not as simple libertarian as "North or South?"
  - Fjolsvith 7y ago
    Well, in our community, we know which hospital costs more before we break our arms.
  - wkearney99 7y ago
    This greatly ignores the reality that in a community, when prices are known, there's a collective understanding of which places (regardless of industry) are more expensive than others. And whether the cost difference are justified based on, again, collective experience. So, no, of course no one is going to fire up the equivalent of GasBuddy when they're in an ambulance. You no doubt already know this, so why make such a ludicrous argument?
com2kid 7y ago
> Next time when a bone in broken in your body, go comparison shopping because it's a free market and you should get the best deal while your bones hang freely. Or already know the price of how much it costs to get a bone set at different local providers and make your pick ahead of time. Why assume people aren't going to shop around until something happens? "Hey ambulance driver, my preferred clinic is such and such take me there please." Most medical situations are non-emergency.
- CathedralBorrow 7y ago
  Would you keep a mental record of every service at hospitals? Seems like a gigantic waste of effort for everyone to have to know that a bone fracture is cheapest at hospital A, but C is best for head injuries. Unless of course you aren't conscious enough to direct the ambulance driver at all.
  - com2kid 7y ago
    > Seems like a gigantic waste of effort for everyone to have to know that a bone fracture is cheapest at hospital A, but C is best for head injuries. Imagine a world where prices are openly advertised, and as a result they start to drop. Take laser eye surgery as an example. Prices are insanely competitive! They have been going down for years, and equipment manufacturers have been hard at work making more reliable and cheaper to operate equipment that has less side effects! We have a free market for literally curing blindness and it works really well. Now take more urgent but not life threatening cases. Last couple times I broke something, it was of the "well that sucks and it is kind of swollen but whatever" type, and I got to choose where to get an X-Ray at. That is a perfect case where open pricing would drive the market price down and save me money. As another example, physical therapy prices are often advertised on the open market. So are therapeutic massage prices. Both are price competitive markets. Sure life threatening emergencies will still be subject to price gouging, but if the entire medical system is running more efficiently then even emergency services may see a reduction in costs in places. Maybe not for the trauma center, but for the hospital stay outside the ICU, why not?
    - 7y ago
grahamburger 7y ago
> Next time when a bone in broken in your body I definitely would, why wouldn't you? Broken bones are urgent but usually not life threatening - in that situation I'd definitely take a few minutes to decide how exactly to handle the situation - call an ambulance, or have a friend drive me to the hospital? ER, urgent care, or GP? Lots of options with different trade-offs, even if cost wasn't one of them! Urgent, life and death situations are obviously a special case but are also a pretty small percentage of medical care at least IME. My wife has had quite a bit of medical care over the last few years including having 3 kids and several unrelated, important but not immediately life or death surgeries. In every case we evaluated several options before picking a Dr and a hospital. We looked at price, recs from friends, distance from home, reviews, etc just like picking a restaurant or a new car. Even in the few urgent life/death ER visits we've had we still picked where to go, we just picked ahead of time - when we get a new insurance plan we usually glance through it to make sure we know what are the closest ERs and urgent cares that are covered, and if there are multiple options we'll pick a default. Again I don't know why someone wouldn't do that, even if our healthcare were free we'd still compare on other metrics.

jyrkesh 7y ago

It's semantics, but they're important when you're talking about economics. You're describing inelasticity of demand, which is to say that I need the good irrespective of the price (and it may mean irrespective of the geographic inefficiency). In a free market, I can open a hospital across the street from your hospital and charge whatever I want for similar (or completely different) services. Presumably, our hospitals would also have a brand reputation: I know lots of folks who say "I'll never go to X HMO again, it's so much better at Y public hospital" and would gladly drive an extra mile or two with their broken arm kid if it means they're fairly certain they'll save a few grand (or more). A similar example is that I'm halfway down a 200 mile highway, and I need gasoline. There could be one gas station, there could be five, but the fact that I'm allowed to open a gas station next to the sole one that exists means it's a free market. If the government says "there shall be one [or two, or ten]" gas stations here, or that "all gas stations here shall charge this rate", then it's less of a free market. You may be trying to describe the concept of perfect competition[1]. If so, I'd agree with you that health care can almost never achieve perfect competition because perfect information becomes harder to obtain as situations become more expedient or dire. [1] https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition

Fjolsvith 7y ago

In my community in western Kansas, there are two hospitals nearly equidistant from us. An ambulance crew asks which one do we want to go to. Why would cost not play a role in that decision?

jjwhitaker 7y ago
Cost should play a role but I don't think it should ever cross your mind or need to be a decision you have to make. In your anecdotal situation let's say you fell and broke your arm and are now sitting in the back of the ambulance when they ask that question. North or South hospital? With your one good arm are will you load up a cost comparison of services between the hospitals, checking what the procedure might be if the break is impacted, if muscle tissue is torn or needs to be repaired surgically, what followups or cast removal costs, and building a spreadsheet of possible scenarios based on the underlying medical statistics combined with the risk factors of your incident? Ar you comparing that against hospital ratings for those departments and doctors and their success rates combined with education or training in line with best practices or regulations? Then are you compiling this data to make a decision based on which hospital is the most viable economically vs the standard of care for your suspected injury and reaching a decision? Are you going to do this for every viable healthcare situation in advance so you're aware of updated costs at South or the new star surgeon hired at North hospital? There's certainly a market for that analysis but I don't think it's analogous to real life. Most people are going to call 911, get in the ambulance if needed, and go to the closest hospital with capacity. The price, quality, and other checks need to happen at a higher level while still be transparent and open. Medicare has tools to solve this just like how the FDA us meant to resolve food safety questions and other governing bodies are there to regulate and enforce standards. Unfortunately it's not as simple libertarian as "North or South?"
- Fjolsvith 7y ago
  Well, in our community, we know which hospital costs more before we break our arms.
- wkearney99 7y ago
  This greatly ignores the reality that in a community, when prices are known, there's a collective understanding of which places (regardless of industry) are more expensive than others. And whether the cost difference are justified based on, again, collective experience. So, no, of course no one is going to fire up the equivalent of GasBuddy when they're in an ambulance. You no doubt already know this, so why make such a ludicrous argument?

com2kid 7y ago

> Next time when a bone in broken in your body, go comparison shopping because it's a free market and you should get the best deal while your bones hang freely. Or already know the price of how much it costs to get a bone set at different local providers and make your pick ahead of time. Why assume people aren't going to shop around until something happens? "Hey ambulance driver, my preferred clinic is such and such take me there please." Most medical situations are non-emergency.

CathedralBorrow 7y ago
Would you keep a mental record of every service at hospitals? Seems like a gigantic waste of effort for everyone to have to know that a bone fracture is cheapest at hospital A, but C is best for head injuries. Unless of course you aren't conscious enough to direct the ambulance driver at all.
- com2kid 7y ago
  > Seems like a gigantic waste of effort for everyone to have to know that a bone fracture is cheapest at hospital A, but C is best for head injuries. Imagine a world where prices are openly advertised, and as a result they start to drop. Take laser eye surgery as an example. Prices are insanely competitive! They have been going down for years, and equipment manufacturers have been hard at work making more reliable and cheaper to operate equipment that has less side effects! We have a free market for literally curing blindness and it works really well. Now take more urgent but not life threatening cases. Last couple times I broke something, it was of the "well that sucks and it is kind of swollen but whatever" type, and I got to choose where to get an X-Ray at. That is a perfect case where open pricing would drive the market price down and save me money. As another example, physical therapy prices are often advertised on the open market. So are therapeutic massage prices. Both are price competitive markets. Sure life threatening emergencies will still be subject to price gouging, but if the entire medical system is running more efficiently then even emergency services may see a reduction in costs in places. Maybe not for the trauma center, but for the hospital stay outside the ICU, why not?
  - 7y ago

grahamburger 7y ago

> Next time when a bone in broken in your body I definitely would, why wouldn't you? Broken bones are urgent but usually not life threatening - in that situation I'd definitely take a few minutes to decide how exactly to handle the situation - call an ambulance, or have a friend drive me to the hospital? ER, urgent care, or GP? Lots of options with different trade-offs, even if cost wasn't one of them! Urgent, life and death situations are obviously a special case but are also a pretty small percentage of medical care at least IME. My wife has had quite a bit of medical care over the last few years including having 3 kids and several unrelated, important but not immediately life or death surgeries. In every case we evaluated several options before picking a Dr and a hospital. We looked at price, recs from friends, distance from home, reviews, etc just like picking a restaurant or a new car. Even in the few urgent life/death ER visits we've had we still picked where to go, we just picked ahead of time - when we get a new insurance plan we usually glance through it to make sure we know what are the closest ERs and urgent cares that are covered, and if there are multiple options we'll pick a default. Again I don't know why someone wouldn't do that, even if our healthcare were free we'd still compare on other metrics.