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What people don't like to admit is that free markets don't work for healthcare. What is the price you're willing to pay for curing that tumor in your gut? Every

What people don't like to admit is that free markets don't work for healthcare. What is the price you're willing to pay for curing that tumor in your gut? Everything you have. There is no supply vs. demand. Only supply vs infinity. What would happen to the food market were it not for the generally high supply of food? It wouldn't be pretty. Because of that, some sort of non-market intervention is simply unavoidable. As are the inefficiencies that go along with price controls and other similar endeavors. Ugly stuff, this healthcare business.

tptacek 16y ago
This is a weird summary of how "free markets" and "supply and demand" work. Yes, you will pay everything you have for a cure. But the guy who will offer you a cure for "everything you have minus one dollar" is going to get your business.
- damoncali 16y ago
  That's not exactly encouraging.
  - deleted 16y ago
    [deleted]
    - damoncali 16y ago
      Sorry - I was joking. Perhaps I should have added a smiley. I get what you're saying. I also think that: 1. the medical industries/professions work very hard at discouraging price competition. 2. price competition is not sufficient to create a healthcare marketplace that works well for society. I'd like to see people without means have at least some access to medical technology/services, even at the cost of inefficiency. But that's just me. Like I said - it's a beast.
  - tptacek 16y ago
    You're not encouraged that there's price competition in health care, or you don't believe that there's price competition in health care?
    - lolno 16y ago
      I don't believe it exists in a meaningful way, and I say that as somebody who paid for cancer treatment out of pocket. In emergency situations, you really just go for 'closest competent solution' and don't spend time negotiating with more distant hospitals. In non-emergency situations, you're still limited to a fairly small number of competent providers who are near your family/friends, and have the right skills. And frankly, it's not like you can get a binding estimate anyway. The only thing you know the cost of, for sure, are the procedures they've already performed. But there's no certainty about whether the "cheap" place might recommend this or that and end up deeper in your pockets than the "expensive" place. So not only is it nearly impossible to compare the costs, you're doing so while really only concerned about whether or not you'll die. I hope you're lucky enough to remain an ignorant fool who believes that there is meaningful competition in the sector. But if you aren't, you'll quickly realize that you believe some retarded bullshit.
- joe_the_user 16y ago
  But the guy who will offer you a cure for "everything you have minus one dollar" is going to get your business. Not necessarily. Suppose you have a deadly condition. Your information is extremely limited as non-professional. Would ... you can pay all your money now for the cure your doctor offers or you can wander over to an unknown provider for the best price? The quality of unknown providers is ... unknown and your doctor is known. And he knows he's got by the genitalia and will charge accordingly since with even a thousand unknown providers, your real choices are very limited. Just as much. Presently, no American hospital publishes its price list. I believe there's no regulation about this. Why hasn't "the market" impelled these providers to publish their prices.
  - Zak 16y ago
    Presently, no American hospital publishes its price list. Almost every American hospital publishes its price list to its primary customers: the insurance companies. The problem as I see it is that the insurance companies are the only entities that can get fair prices for health care, and they want to keep it that way. A potential solution would be to ban insurance discounts; a health-care provider could charge any price it wants, but it would be required to charge all customers the same price. Insurance companies would still negotiate for lower prices, so it would benefit all of us.
    - cookiecaper 16y ago
      My experience has been that if you don't have insurance, the hospital will cut a big chunk out of your bill immediately. Their "negotiated rates" are all just made up things they put on the insurance bill because insurers can pay a lot of money. The insurer calls and says "Hello, I would like a discount". And the guy says "Ah, yes, our standard rate is cash rate + $1000, but for you, I'll take off $500". For instance, a podiatrist I know charges $350 to the insurance company (which shows this as the discounted, negotiated rate) but $150 cash to remove an ingrown toenail. I'm sure there are exceptions.
      - caseysoftware 16y ago
- StudyAnimal 16y ago
  No he wont. The next guy that comes along and offers a cure for "everything you have minus TWO dollars" gets the business, and so on, until an equilibrium is reached where it is not worth being in the business by offering cheaper prices.
- danssig 16y ago
  What are we discussing here? Do you not know the difference between elastic and inelastic markets? Health Care cannot ever be a free market because it is utterly inelastic.
  - cdavid 16y ago
    By that argument, food, water cannot be a free market either. I am not saying that health care works best in a free market or not, but whether it is elastic/inelastic is not the only factor. Also, depending on which health care we are talking about, it is certainly elastic: sure, if you just got shot and are mortally wounded, you are pretty much ready to pay anything you can to get treated, but maybe that private room or new cancer treatment twice as expensive without proved benefits is not that necessary.
- noodle 16y ago
  that is true for certain procedures, and not true for others. you don't have time to shop around for services while unconscious in the back of an ambulance.
dualogy 16y ago
"What would happen to the food market were it not for the generally high supply of food? It wouldn't be pretty." You turned cause and effect upside down. You think the free market for food "works" because food supply is "abundant"? Think again. The supply is high because it's market is "free" (not really but fairly) globally and (sorta) works.
- 100k 16y ago
  If only doctors were as easy to grow as carrots...
  - rdtsc 16y ago
    They sure are not more expensive to grow than good engeers or teachers? And of course, they will grow better if they eat their carrots ;-)
maxharris 16y ago
Few will admit that we don't have anything close to a free market in healthcare today (or for the past several decades). A truly free market is one unfettered by the FDA, medicare, medicaid, doctor regulations, hospital regulations, HMO regulations, insurance regulations, etc. All of these controls were ostensibly put in place to protect patients, but in actuality they serve to slow innovation and true access to medicine to a crawl. It is true that some people will choose badly when left to their own devices, but that's better than forcing the same dumb rule on everyone. Each of us is an end in ourselves. So long as we do not violate the negative rights of others, we are responsible only for our own lives, not the lives of our brothers.
- danssig 16y ago
  For someone who puts so much faith in free markets you don't appear to understand how they work. In your studies, look up "market elasticity" for a clue.
  - iwwr 16y ago
    How is that relevant here?
    - danssig 16y ago
      Health care is, by definition, an inelastic market.
      - iwwr 16y ago
        The point being? Sorry if I'm being dense, but no market is truly elastic.
        danssig 16y ago
        Not true. I don't have to buy a smart phone, for example. I can live a wonderfully productive life with a normal cell phone. This means the price we see for a smart phone tracks very close to its value. You cannot do without health care. If you get sick you will pay any and every price to get well. If you die, your money is worthless anyway. A market you cannot opt out of is inelastic and normal free market forces wont be able to find the correct price as they would in a more elastic market.
speleding 16y ago
> free markets don't work for healthcare Healthcare can be broken up into a lot of smaller markets, and for a lot of those the free market works just fine. The market for coffee in the cafeteria of the hospital works fine as a free market. Do you know what percentage of healthcare cost pertain to the cost of the actual treatment itself? (hint: it's a very small part)
- danssig 16y ago
  Could you please cite somewhere in the world where the free market is working for health care? Every other first world country either has socialized medicine or a tightly regulated health industry.
  - Tyrannosaurs 16y ago
    Singapore - arguably the most efficient healthcare system in the world. Tim Harford talks about it in his excellent book "The Undercover Economist" (worth commenting that he's not rampantly free market - he spends time putting the boot into the US system too as well as praising the UK's NHS). Basically everyone has to maintain a fund (the government pay into it for the poorest) for healthcare. This is what they spend when they have healthcare needs. Because the people are making the purchasing decisions themselves (as opposed to the insurance company doing it) they have a far stronger incentive to demand value and to be informed, and you get genuine competition between providers (as if you don't like them this time you'll go elsewhere next time with no insurance company mandating who you can see). The government then picks up the few areas that aren't well catered for by this system. I think it costs about 40% of what the US system costs (possibly even less) and Singapore has a typical life expectancy of 80.
    - jasonwocky 16y ago
      Basically everyone has to maintain a fund... And with that, you're no longer in a free market.
      - Tyrannosaurs 16y ago
dalore 16y ago
The free market does work in healthcare, you just need a government option as a baseline. If someone wants better care then the socialized healthcare, they are free to pay. That's the system in England and Australia.

tptacek 16y ago

This is a weird summary of how "free markets" and "supply and demand" work. Yes, you will pay everything you have for a cure. But the guy who will offer you a cure for "everything you have minus one dollar" is going to get your business.

damoncali 16y ago
That's not exactly encouraging.
- deleted 16y ago
  [deleted]
  - damoncali 16y ago
    Sorry - I was joking. Perhaps I should have added a smiley. I get what you're saying. I also think that: 1. the medical industries/professions work very hard at discouraging price competition. 2. price competition is not sufficient to create a healthcare marketplace that works well for society. I'd like to see people without means have at least some access to medical technology/services, even at the cost of inefficiency. But that's just me. Like I said - it's a beast.
- tptacek 16y ago
  You're not encouraged that there's price competition in health care, or you don't believe that there's price competition in health care?
  - lolno 16y ago
    I don't believe it exists in a meaningful way, and I say that as somebody who paid for cancer treatment out of pocket. In emergency situations, you really just go for 'closest competent solution' and don't spend time negotiating with more distant hospitals. In non-emergency situations, you're still limited to a fairly small number of competent providers who are near your family/friends, and have the right skills. And frankly, it's not like you can get a binding estimate anyway. The only thing you know the cost of, for sure, are the procedures they've already performed. But there's no certainty about whether the "cheap" place might recommend this or that and end up deeper in your pockets than the "expensive" place. So not only is it nearly impossible to compare the costs, you're doing so while really only concerned about whether or not you'll die. I hope you're lucky enough to remain an ignorant fool who believes that there is meaningful competition in the sector. But if you aren't, you'll quickly realize that you believe some retarded bullshit.
joe_the_user 16y ago
But the guy who will offer you a cure for "everything you have minus one dollar" is going to get your business. Not necessarily. Suppose you have a deadly condition. Your information is extremely limited as non-professional. Would ... you can pay all your money now for the cure your doctor offers or you can wander over to an unknown provider for the best price? The quality of unknown providers is ... unknown and your doctor is known. And he knows he's got by the genitalia and will charge accordingly since with even a thousand unknown providers, your real choices are very limited. Just as much. Presently, no American hospital publishes its price list. I believe there's no regulation about this. Why hasn't "the market" impelled these providers to publish their prices.
- Zak 16y ago
  Presently, no American hospital publishes its price list. Almost every American hospital publishes its price list to its primary customers: the insurance companies. The problem as I see it is that the insurance companies are the only entities that can get fair prices for health care, and they want to keep it that way. A potential solution would be to ban insurance discounts; a health-care provider could charge any price it wants, but it would be required to charge all customers the same price. Insurance companies would still negotiate for lower prices, so it would benefit all of us.
  - cookiecaper 16y ago
    My experience has been that if you don't have insurance, the hospital will cut a big chunk out of your bill immediately. Their "negotiated rates" are all just made up things they put on the insurance bill because insurers can pay a lot of money. The insurer calls and says "Hello, I would like a discount". And the guy says "Ah, yes, our standard rate is cash rate + $1000, but for you, I'll take off $500". For instance, a podiatrist I know charges $350 to the insurance company (which shows this as the discounted, negotiated rate) but $150 cash to remove an ingrown toenail. I'm sure there are exceptions.
    - caseysoftware 16y ago
StudyAnimal 16y ago
No he wont. The next guy that comes along and offers a cure for "everything you have minus TWO dollars" gets the business, and so on, until an equilibrium is reached where it is not worth being in the business by offering cheaper prices.
danssig 16y ago
What are we discussing here? Do you not know the difference between elastic and inelastic markets? Health Care cannot ever be a free market because it is utterly inelastic.
- cdavid 16y ago
  By that argument, food, water cannot be a free market either. I am not saying that health care works best in a free market or not, but whether it is elastic/inelastic is not the only factor. Also, depending on which health care we are talking about, it is certainly elastic: sure, if you just got shot and are mortally wounded, you are pretty much ready to pay anything you can to get treated, but maybe that private room or new cancer treatment twice as expensive without proved benefits is not that necessary.
noodle 16y ago
that is true for certain procedures, and not true for others. you don't have time to shop around for services while unconscious in the back of an ambulance.

dualogy 16y ago

"What would happen to the food market were it not for the generally high supply of food? It wouldn't be pretty." You turned cause and effect upside down. You think the free market for food "works" because food supply is "abundant"? Think again. The supply is high because it's market is "free" (not really but fairly) globally and (sorta) works.

100k 16y ago
If only doctors were as easy to grow as carrots...
- rdtsc 16y ago
  They sure are not more expensive to grow than good engeers or teachers? And of course, they will grow better if they eat their carrots ;-)

maxharris 16y ago

Few will admit that we don't have anything close to a free market in healthcare today (or for the past several decades). A truly free market is one unfettered by the FDA, medicare, medicaid, doctor regulations, hospital regulations, HMO regulations, insurance regulations, etc. All of these controls were ostensibly put in place to protect patients, but in actuality they serve to slow innovation and true access to medicine to a crawl. It is true that some people will choose badly when left to their own devices, but that's better than forcing the same dumb rule on everyone. Each of us is an end in ourselves. So long as we do not violate the negative rights of others, we are responsible only for our own lives, not the lives of our brothers.

danssig 16y ago
For someone who puts so much faith in free markets you don't appear to understand how they work. In your studies, look up "market elasticity" for a clue.
- iwwr 16y ago
  How is that relevant here?
  - danssig 16y ago
    Health care is, by definition, an inelastic market.
    - iwwr 16y ago
      The point being? Sorry if I'm being dense, but no market is truly elastic.
      - danssig 16y ago
        Not true. I don't have to buy a smart phone, for example. I can live a wonderfully productive life with a normal cell phone. This means the price we see for a smart phone tracks very close to its value. You cannot do without health care. If you get sick you will pay any and every price to get well. If you die, your money is worthless anyway. A market you cannot opt out of is inelastic and normal free market forces wont be able to find the correct price as they would in a more elastic market.

speleding 16y ago

> free markets don't work for healthcare Healthcare can be broken up into a lot of smaller markets, and for a lot of those the free market works just fine. The market for coffee in the cafeteria of the hospital works fine as a free market. Do you know what percentage of healthcare cost pertain to the cost of the actual treatment itself? (hint: it's a very small part)

danssig 16y ago
Could you please cite somewhere in the world where the free market is working for health care? Every other first world country either has socialized medicine or a tightly regulated health industry.
- Tyrannosaurs 16y ago
  Singapore - arguably the most efficient healthcare system in the world. Tim Harford talks about it in his excellent book "The Undercover Economist" (worth commenting that he's not rampantly free market - he spends time putting the boot into the US system too as well as praising the UK's NHS). Basically everyone has to maintain a fund (the government pay into it for the poorest) for healthcare. This is what they spend when they have healthcare needs. Because the people are making the purchasing decisions themselves (as opposed to the insurance company doing it) they have a far stronger incentive to demand value and to be informed, and you get genuine competition between providers (as if you don't like them this time you'll go elsewhere next time with no insurance company mandating who you can see). The government then picks up the few areas that aren't well catered for by this system. I think it costs about 40% of what the US system costs (possibly even less) and Singapore has a typical life expectancy of 80.
  - jasonwocky 16y ago
    Basically everyone has to maintain a fund... And with that, you're no longer in a free market.
    - Tyrannosaurs 16y ago

dalore 16y ago

The free market does work in healthcare, you just need a government option as a baseline. If someone wants better care then the socialized healthcare, they are free to pay. That's the system in England and Australia.