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Dictating prices is better done from a government panel than a corporate board. Medicare sometimes sets payouts below "cost", but sometimes costs are out of con

by dv_dt 7y ago

Dictating prices is better done from a government panel than a corporate board. Medicare sometimes sets payouts below "cost", but sometimes costs are out of control. The article below touches on this and goes through some data, and concludes that some segments of over-cost hospitals should maybe come down in price, while also suggesting that primary care physicians are underpaid via Medicare. Regardless of the over/under, that's a better discussion to have in the open publically, than behind closed negotiating doors - leading to systemic over costs (comparing between the US and other nations). http://voices.washingtonpost.com/ezra-klein/2009/07/does_medicare_pay_below_cost_w.html http://voices.washingtonpost.com/ezra-klein/2009/07/does_med...

AnthonyMouse 7y ago
The issue is that prices shouldn't be dictated at all. The way health insurance should ideally work for non-emergency care is that the insurance pays the amount charged by the lowest cost provider, but the patient can choose any provider they like and pay the difference themselves. Then if one provider has bigger rooms or is less of a commute or has better ratings on some ratings service, the patient is the one deciding whether or not the benefit is worth the additional cost, instead of some functionary who is neither the patient nor the recipient of the bill.
- dv_dt 7y ago
  This assumes that the health insurance plans are an effective check on cost, that there is any sort of shoppable market for medical services, and that the patient has the knowledge to shop with at the level of sophistication of medical professionals. None of that happens in the current healthcare market where we pay over double all other modern nations, nor does it happen in the many other nations that effectively control medical costs via setting a schedule of prices for drugs and medical procedures.
  - AnthonyMouse 7y ago
    > This assumes that the health insurance plans are an effective check on cost, that there is any sort of shoppable market for medical services, and that the patient has the knowledge to shop with at the level of sophistication of medical professionals. The check on cost in this case would be the patient, because outside of any other reason to choose one provider over the other, they would choose the least expensive one and save money. Which gives every provider the incentive to either be the least expensive one or provide tangibly more benefit to justify a higher price. Yes, for it to work it would have to be combined with some functioning price transparency, but so let's do that then. And the last isn't actually required. If patients can discern no meaningful difference between providers then they'll just choose the least expensive one, leading to price competition as intended. Though you can imagine that repeat patients will still have good knowledge of how big the patient rooms are, how soft the beds are, how much time they find themselves spending in the waiting room, how far the office is from their house, etc. > None of that happens in the current healthcare market where we pay over double all other modern nations, nor does it happen in the many other nations that effectively control medical costs via setting a schedule of prices for drugs and medical procedures. Nobody thinks the current US healthcare market is cost efficient. The existing regulatory environment is bad and promotes a lack of competition. But why is the only solution price controls, instead of fixing the bad rules that impair competition?

by dv_dt 7y ago

AnthonyMouse 7y ago

The issue is that prices shouldn't be dictated at all. The way health insurance should ideally work for non-emergency care is that the insurance pays the amount charged by the lowest cost provider, but the patient can choose any provider they like and pay the difference themselves. Then if one provider has bigger rooms or is less of a commute or has better ratings on some ratings service, the patient is the one deciding whether or not the benefit is worth the additional cost, instead of some functionary who is neither the patient nor the recipient of the bill.

dv_dt 7y ago
This assumes that the health insurance plans are an effective check on cost, that there is any sort of shoppable market for medical services, and that the patient has the knowledge to shop with at the level of sophistication of medical professionals. None of that happens in the current healthcare market where we pay over double all other modern nations, nor does it happen in the many other nations that effectively control medical costs via setting a schedule of prices for drugs and medical procedures.
- AnthonyMouse 7y ago
  > This assumes that the health insurance plans are an effective check on cost, that there is any sort of shoppable market for medical services, and that the patient has the knowledge to shop with at the level of sophistication of medical professionals. The check on cost in this case would be the patient, because outside of any other reason to choose one provider over the other, they would choose the least expensive one and save money. Which gives every provider the incentive to either be the least expensive one or provide tangibly more benefit to justify a higher price. Yes, for it to work it would have to be combined with some functioning price transparency, but so let's do that then. And the last isn't actually required. If patients can discern no meaningful difference between providers then they'll just choose the least expensive one, leading to price competition as intended. Though you can imagine that repeat patients will still have good knowledge of how big the patient rooms are, how soft the beds are, how much time they find themselves spending in the waiting room, how far the office is from their house, etc. > None of that happens in the current healthcare market where we pay over double all other modern nations, nor does it happen in the many other nations that effectively control medical costs via setting a schedule of prices for drugs and medical procedures. Nobody thinks the current US healthcare market is cost efficient. The existing regulatory environment is bad and promotes a lack of competition. But why is the only solution price controls, instead of fixing the bad rules that impair competition?