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I've always wondered which part of the medical supply chain is causing healthcare prices to rise so rapidly. There's no way these are natural market rates being

by jb775 6y ago

I've always wondered which part of the medical supply chain is causing healthcare prices to rise so rapidly. There's no way these are natural market rates being driven by supply/demand, it's gotta be something artificial. My guess is something along the lines of medical device companies colluding to prop up prices to hospitals.

jandrese 6y ago
It's not collusion, it's a natural consequence of the way healthcare billing is structured in the US. You don't get to comparison shop but also have a captive audience (you're not just going to decide to be blind right?) so there's no pressure to keep prices reasonable. This makes a lot of money for powerfully connected companies, so don't expect it to change anytime soon. This is why our congress and mass media treat Medicare For All as a joke or something to attack politicians on even though it's popular with a majority of Americans.
briandear 6y ago
No, it’s Medicare cross-subsidization as well as the EMTALA. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5769684/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5769684/
derivagral 6y ago
You might take a look at some things from e.g. this result[1] around what parts of USA healthcare are negotiatiable and which are fixed. The "$1500 for a gauze bandage" meme makes a little more sense if you view it from the perspective of "we can't charge market price for expensive things like an MRI since Medi___ pays a flat $1.5k/ea, so lets gouge everywhere we can to make up for it". In addition, the business setup of hospitals/providers and lack of a single customer-facing entity/provider that charges you for services makes these even more Kafkaesque. On top of this, my friends who work at (private, non-general) hospitals work a lot and are not paid what someone on HN might expect for what they put in. This isn't even necessarily ownership vs labor, since afaik the hospitals themselves are not usually in the best of places financially. To me, the short version is: can't easily negotiate, information asymmetry, and captured regulators. Imo, this isn't helped that in USA we say "healthcare insurance" but what we mean/want seems to actually be "healthcare subsidy/guarantee". [1] https://www.kff.org/medicare/issue-brief/whats-the-latest-on-medicare-drug-price-negotiations/ https://www.kff.org/medicare/issue-brief/whats-the-latest-on...
Analemma_ 6y ago
There is no one part, the excessive costs can only be analyzed as a symptom of the system as a whole. One fellow online dubbed this "Coasian hell" and has a good writeup explaining where it comes from: http://www.harrowell.org.uk/blog/2018/01/31/in-the-eternal-inferno-fiends-torment-ronald-coase-with-the-fate-of-his-ideas/ http://www.harrowell.org.uk/blog/2018/01/31/in-the-eternal-i...

by jb775 6y ago

jandrese 6y ago

It's not collusion, it's a natural consequence of the way healthcare billing is structured in the US. You don't get to comparison shop but also have a captive audience (you're not just going to decide to be blind right?) so there's no pressure to keep prices reasonable. This makes a lot of money for powerfully connected companies, so don't expect it to change anytime soon. This is why our congress and mass media treat Medicare For All as a joke or something to attack politicians on even though it's popular with a majority of Americans.

briandear 6y ago

No, it’s Medicare cross-subsidization as well as the EMTALA. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5769684/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5769684/

derivagral 6y ago

You might take a look at some things from e.g. this result[1] around what parts of USA healthcare are negotiatiable and which are fixed. The "$1500 for a gauze bandage" meme makes a little more sense if you view it from the perspective of "we can't charge market price for expensive things like an MRI since Medi___ pays a flat $1.5k/ea, so lets gouge everywhere we can to make up for it". In addition, the business setup of hospitals/providers and lack of a single customer-facing entity/provider that charges you for services makes these even more Kafkaesque. On top of this, my friends who work at (private, non-general) hospitals work a lot and are not paid what someone on HN might expect for what they put in. This isn't even necessarily ownership vs labor, since afaik the hospitals themselves are not usually in the best of places financially. To me, the short version is: can't easily negotiate, information asymmetry, and captured regulators. Imo, this isn't helped that in USA we say "healthcare insurance" but what we mean/want seems to actually be "healthcare subsidy/guarantee". [1] https://www.kff.org/medicare/issue-brief/whats-the-latest-on-medicare-drug-price-negotiations/ https://www.kff.org/medicare/issue-brief/whats-the-latest-on...

Analemma_ 6y ago

There is no one part, the excessive costs can only be analyzed as a symptom of the system as a whole. One fellow online dubbed this "Coasian hell" and has a good writeup explaining where it comes from: http://www.harrowell.org.uk/blog/2018/01/31/in-the-eternal-inferno-fiends-torment-ronald-coase-with-the-fate-of-his-ideas/ http://www.harrowell.org.uk/blog/2018/01/31/in-the-eternal-i...