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This is why these universal programs are coupled with monopsony leverage. Healthcare prices have exploded because the government has been intentionally hobbled

This is why these universal programs are coupled with monopsony leverage. Healthcare prices have exploded because the government has been intentionally hobbled at the bargaining table, legislatively blocked from using its weight to negotiate better deals for prescription drug prices. Tuition has exploded because a system of credit has been created that is untouchable by bankruptcy. These are solvable problems.

chillacy 7y ago
Agreed, they look pretty solvable and semi-obvious to me, but the pace of government has been slow (assuming they're not being incentivized against fixing these problems through lobbying in the first place). It's very sad to watch.
AnthonyMouse 7y ago
> This is why these universal programs are coupled with monopsony leverage. Healthcare prices have exploded because the government has been intentionally hobbled at the bargaining table, legislatively blocked from using its weight to negotiate better deals for prescription drug prices. "Monopsony leverage" and "bargaining" is just price controls. You don't even need single payer for that if you want to do it, you can just legislate prices. The problem is price controls have a long record of being problematic, because everybody wants lower prices but if you set the price too low you get shortages. This is complicated in this case by the fact that most of the cost is R&D, so the thing that isn't supplied isn't pills for already-developed drugs, it's research into new drugs. And then comparisons to other countries fall flat because it's a global market, so as long as anyone (i.e. the US) is paying a lot to create a return for R&D spending, the research gets done and the other countries get access to it. So one of the reasons we pay so much more than everybody else is that we subsidize medical R&D for the rest of the world. Solving that isn't just a matter of us paying less, it also has to somehow involve them paying more, unless we want a lot less R&D. Moreover, a lot of the costs basically amount to regulatory capture or drug companies outsmarting the government. It's them finding ways to limit competition for things that should be cheap commodities, or get patents on things that are only marginally better than the status quo, and use that to raise prices. So you have to find ways to distinguish that stuff from real medical advances that are actually worth paying higher costs to get. But if you can do that then you can restrain that type of behavior without actually regulating prices, so that genuine medical advances continue to get the funding they require to be developed. Which is really what we need to do, but easier said than done.
- omegaworks 7y ago
  >"Monopsony leverage" and "bargaining" is just price controls. You don't even need single payer for that if you want to do it, you can just legislate prices. No, monopsony leverage is not the same as a price control. The minimum price that monoposony can give you is the cost to produce the given drug. Price controls allow you to mandate a price lower than their cost to produce, hence the negative effects you mention. >This is complicated in this case by the fact that most of the cost is R&D This is also false. Marketing outweighs the R&D budgets at most private pharmaceutical companies. >a lot of the costs basically amount to regulatory capture or drug companies outsmarting the government It sounds like you’re advocating for the dismantling of the drug patent system, which is a far more radical proposal. I agree that regulatory/market failure also contributes to high costs, it’s why I believe the free market poorly maps onto the problem of providing healthcare.

chillacy 7y ago

Agreed, they look pretty solvable and semi-obvious to me, but the pace of government has been slow (assuming they're not being incentivized against fixing these problems through lobbying in the first place). It's very sad to watch.

AnthonyMouse 7y ago

> This is why these universal programs are coupled with monopsony leverage. Healthcare prices have exploded because the government has been intentionally hobbled at the bargaining table, legislatively blocked from using its weight to negotiate better deals for prescription drug prices. "Monopsony leverage" and "bargaining" is just price controls. You don't even need single payer for that if you want to do it, you can just legislate prices. The problem is price controls have a long record of being problematic, because everybody wants lower prices but if you set the price too low you get shortages. This is complicated in this case by the fact that most of the cost is R&D, so the thing that isn't supplied isn't pills for already-developed drugs, it's research into new drugs. And then comparisons to other countries fall flat because it's a global market, so as long as anyone (i.e. the US) is paying a lot to create a return for R&D spending, the research gets done and the other countries get access to it. So one of the reasons we pay so much more than everybody else is that we subsidize medical R&D for the rest of the world. Solving that isn't just a matter of us paying less, it also has to somehow involve them paying more, unless we want a lot less R&D. Moreover, a lot of the costs basically amount to regulatory capture or drug companies outsmarting the government. It's them finding ways to limit competition for things that should be cheap commodities, or get patents on things that are only marginally better than the status quo, and use that to raise prices. So you have to find ways to distinguish that stuff from real medical advances that are actually worth paying higher costs to get. But if you can do that then you can restrain that type of behavior without actually regulating prices, so that genuine medical advances continue to get the funding they require to be developed. Which is really what we need to do, but easier said than done.

omegaworks 7y ago
>"Monopsony leverage" and "bargaining" is just price controls. You don't even need single payer for that if you want to do it, you can just legislate prices. No, monopsony leverage is not the same as a price control. The minimum price that monoposony can give you is the cost to produce the given drug. Price controls allow you to mandate a price lower than their cost to produce, hence the negative effects you mention. >This is complicated in this case by the fact that most of the cost is R&D This is also false. Marketing outweighs the R&D budgets at most private pharmaceutical companies. >a lot of the costs basically amount to regulatory capture or drug companies outsmarting the government It sounds like you’re advocating for the dismantling of the drug patent system, which is a far more radical proposal. I agree that regulatory/market failure also contributes to high costs, it’s why I believe the free market poorly maps onto the problem of providing healthcare.