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It turns out markets are a great solution to some kinds of problems and not so much for others. There's a lot of reasons why healthcare doesn't approximate a fr

by eloff 6y ago

It turns out markets are a great solution to some kinds of problems and not so much for others. There's a lot of reasons why healthcare doesn't approximate a free market very well, and why government intervention here tends to do better than the US system. Yes I know there is plenty of government intervention in the US healthcare system - it's just not the right kind of intervention. The US is actually the only developed nation without a public healthcare system, it also has the highest healthcare costs of any nation on earth. Coincidence? It seems like a pretty big mess at the moment.

bravo22 6y ago
You are assuming that healthcare is a free market. There is tremendous regulation, encouraged by incumbants, to keep away the competition. You should look at historical healthcare expenditure by the US. The problem isn't providing healthcare for all... it is the method and the cost. Universal payer is one way. It is not the best way and in fact Medicare is one reason costs are currently high. It is a bit like a car that used to get 30MPG and now gets 15MPG, and getting worse, and the solution being offered is for all of us to collectively chip in and buy gas for those who can't -- which is not tenable in the longterm because you're spending more and more of the GDP on transportation. There are other ways of giving everyone coverage. One scheme, would be giving people money. Enough to cover average cost of healthcare plans and say education plans. The individual is then responsible for their own healthcare and has the funds to purchase health insurance. Then you have a healthy market and have mechanisms for the costs to come down.
- luma 6y ago
  A free market involves a customer that has the option to simply not buy what is on offer. Healthcare can never be a free market in this sense, because the customer is faced with a choice of "buy service and/or product" or "be dead". That is entirely unlike the choice involved in buying something like a refrigerator and seriously skews the applicability of traditional free market thinking to the problem.
  - bravo22 6y ago
    That's not entirely accurate and that's not even the meaning of free market. Water is also a necessity as is food and you can have a free market for those. The questions are: 1. Does the buyer have enough choices or alternatives to choose from when it comes to healthcare? 2. Do those who offer services have a monopoly on the service? When you look at the US market you'll find that it doesn't meet those criterias. Market forces are prevented from acting and being able to reduce costs. The fact that there is a captive audience, as you suggest, means that we cannot just shovel money into it. You end up exactly where you are. Costs go up because it is a necessity. Same reason food prices go up when there is a shortage. It is not a luxury.
    - mizay7 6y ago
      I think you are making a more articulate defense of private/market based health care than i usually hear. but i think fundamentally health care has too many forces that make it untenable for a market. there is no real satiation point in care, people are price inelastic, many services cannot be priced before delivery, there is little opportunity to do repeated business for most of the costliest services, comparison between providers is very difficult, most of the choice happens under incredible duress when you are your weakest point. health care is just not a consumer good that responds well to market mechanisms.
      - bravo22 6y ago
        I suppose it all depends on how you define market mechanisms. What I've found -- after personally studying the subject -- is what a lot of people consider free market is the opposite of what the literature considers it to be. To answer your point: Most/all of the issues you raised are met by "pooling" aka insurance. The need arises at random and when it does there is a massive cost and you urgently need the service. This is what insurance is for. What I was suggesting isn't that people go and pay the doctor out of pocket -- although they can. Rather that they purchase insurance. Those who can't get $$ indexed to some national average or whatever scheme you prefer. The point is everyone gets to purchase insurance if they so prefer. The problem is that choice of insurance providers is artifically limited right now and the choice of healthcare providers is as well. So you have a system where you are captive to the need and those who provide the service have a monpoly. Naturally costs will rise. Putting political preassure on government to increase spending is easy way out but that will only shovel more money from the pockets of the many into the pockets of the few. In fact this was predicted when Medicare was first introduced, and here we are. It is not like doctors and providers magically became greedy capitalists in the last 40 years. Also to be very clear this isn't an issue of "profits". Insurance companies don't have huge profit margins. They make their "wealth" by being a monopoly. The execs make their money on the rise in stock prices which isn't sensitive to their 3-5% profit margin.
- eloff 6y ago
  I'm not assuming anything. I'm starting that even in theory healthcare isn't very amenable to a market solution. I think you disagree with that. It's possible to have a reasonable position on both sides, I don't think it's a solved problem. Where I think we both agree is that the current disastrous mix of regulation and free markets in the present US system is a terrible solution.
  - bravo22 6y ago
    I entirely agree with you on the above!
starik36 6y ago
The costs are high across the system, including government sponsored programs like Medicare. It's a systemic problem and even touches software. https://maxwelljordan.medium.com/why-healthcare-in-us-is-so-expensive-from-the-perspective-of-a-software-developer-45bc5db72e34 https://maxwelljordan.medium.com/why-healthcare-in-us-is-so-...
bhupy 6y ago
> The US is actually the only developed nation without a public healthcare system, That's false on multiple counts. First of all, the US does have a public healthcare system, Medicare and Medicaid. Second of all, there exists other developed nations with fantastic healthcare systems that are driven by purely private systems: namely Switzerland (widely regarded to be one of the best healthcare systems on the planet) and the Netherlands. Even more perfectly fine developed nations operate on public/private mixes, including Germany and Belgium. > it also has the highest healthcare costs of any nation on earth. Coincidence? In this case, it is indeed a coincidence. In order to attribute "privateness" to the high cost, you have to show a causal relationship. Unfortunately, there's a lot of evidence that makes it very difficult to draw that causal line: private Medicare Advantage plans are about 39% cheaper than the public "Original Medicare" (https://healthpayerintelligence.com/news/medicare-advantage-costs-40-less-than-fee-for-service-medicare https://healthpayerintelligence.com/news/medicare-advantage-...), while also being of higher quality (https://healthpayerintelligence.com/news/medicare-advantage-enrollment-quality-continue-upward-trend https://healthpayerintelligence.com/news/medicare-advantage-...). In urban areas, the private Medicare Advantage plans cost less to administer per capita than the public "Original Medicare" (https://www.commonwealthfund.org/publications/issue-briefs/2016/jan/does-medicare-advantage-cost-less-traditional-medicare https://www.commonwealthfund.org/publications/issue-briefs/2...).

by eloff 6y ago

bravo22 6y ago

You are assuming that healthcare is a free market. There is tremendous regulation, encouraged by incumbants, to keep away the competition. You should look at historical healthcare expenditure by the US. The problem isn't providing healthcare for all... it is the method and the cost. Universal payer is one way. It is not the best way and in fact Medicare is one reason costs are currently high. It is a bit like a car that used to get 30MPG and now gets 15MPG, and getting worse, and the solution being offered is for all of us to collectively chip in and buy gas for those who can't -- which is not tenable in the longterm because you're spending more and more of the GDP on transportation. There are other ways of giving everyone coverage. One scheme, would be giving people money. Enough to cover average cost of healthcare plans and say education plans. The individual is then responsible for their own healthcare and has the funds to purchase health insurance. Then you have a healthy market and have mechanisms for the costs to come down.

luma 6y ago
A free market involves a customer that has the option to simply not buy what is on offer. Healthcare can never be a free market in this sense, because the customer is faced with a choice of "buy service and/or product" or "be dead". That is entirely unlike the choice involved in buying something like a refrigerator and seriously skews the applicability of traditional free market thinking to the problem.
- bravo22 6y ago
  That's not entirely accurate and that's not even the meaning of free market. Water is also a necessity as is food and you can have a free market for those. The questions are: 1. Does the buyer have enough choices or alternatives to choose from when it comes to healthcare? 2. Do those who offer services have a monopoly on the service? When you look at the US market you'll find that it doesn't meet those criterias. Market forces are prevented from acting and being able to reduce costs. The fact that there is a captive audience, as you suggest, means that we cannot just shovel money into it. You end up exactly where you are. Costs go up because it is a necessity. Same reason food prices go up when there is a shortage. It is not a luxury.
  - mizay7 6y ago
    I think you are making a more articulate defense of private/market based health care than i usually hear. but i think fundamentally health care has too many forces that make it untenable for a market. there is no real satiation point in care, people are price inelastic, many services cannot be priced before delivery, there is little opportunity to do repeated business for most of the costliest services, comparison between providers is very difficult, most of the choice happens under incredible duress when you are your weakest point. health care is just not a consumer good that responds well to market mechanisms.
    - bravo22 6y ago
      I suppose it all depends on how you define market mechanisms. What I've found -- after personally studying the subject -- is what a lot of people consider free market is the opposite of what the literature considers it to be. To answer your point: Most/all of the issues you raised are met by "pooling" aka insurance. The need arises at random and when it does there is a massive cost and you urgently need the service. This is what insurance is for. What I was suggesting isn't that people go and pay the doctor out of pocket -- although they can. Rather that they purchase insurance. Those who can't get $$ indexed to some national average or whatever scheme you prefer. The point is everyone gets to purchase insurance if they so prefer. The problem is that choice of insurance providers is artifically limited right now and the choice of healthcare providers is as well. So you have a system where you are captive to the need and those who provide the service have a monpoly. Naturally costs will rise. Putting political preassure on government to increase spending is easy way out but that will only shovel more money from the pockets of the many into the pockets of the few. In fact this was predicted when Medicare was first introduced, and here we are. It is not like doctors and providers magically became greedy capitalists in the last 40 years. Also to be very clear this isn't an issue of "profits". Insurance companies don't have huge profit margins. They make their "wealth" by being a monopoly. The execs make their money on the rise in stock prices which isn't sensitive to their 3-5% profit margin.
eloff 6y ago
I'm not assuming anything. I'm starting that even in theory healthcare isn't very amenable to a market solution. I think you disagree with that. It's possible to have a reasonable position on both sides, I don't think it's a solved problem. Where I think we both agree is that the current disastrous mix of regulation and free markets in the present US system is a terrible solution.
- bravo22 6y ago
  I entirely agree with you on the above!

starik36 6y ago

The costs are high across the system, including government sponsored programs like Medicare. It's a systemic problem and even touches software. https://maxwelljordan.medium.com/why-healthcare-in-us-is-so-expensive-from-the-perspective-of-a-software-developer-45bc5db72e34 https://maxwelljordan.medium.com/why-healthcare-in-us-is-so-...

bhupy 6y ago

> The US is actually the only developed nation without a public healthcare system, That's false on multiple counts. First of all, the US does have a public healthcare system, Medicare and Medicaid. Second of all, there exists other developed nations with fantastic healthcare systems that are driven by purely private systems: namely Switzerland (widely regarded to be one of the best healthcare systems on the planet) and the Netherlands. Even more perfectly fine developed nations operate on public/private mixes, including Germany and Belgium. > it also has the highest healthcare costs of any nation on earth. Coincidence? In this case, it is indeed a coincidence. In order to attribute "privateness" to the high cost, you have to show a causal relationship. Unfortunately, there's a lot of evidence that makes it very difficult to draw that causal line: private Medicare Advantage plans are about 39% cheaper than the public "Original Medicare" (https://healthpayerintelligence.com/news/medicare-advantage-costs-40-less-than-fee-for-service-medicare https://healthpayerintelligence.com/news/medicare-advantage-...), while also being of higher quality (https://healthpayerintelligence.com/news/medicare-advantage-enrollment-quality-continue-upward-trend https://healthpayerintelligence.com/news/medicare-advantage-...). In urban areas, the private Medicare Advantage plans cost less to administer per capita than the public "Original Medicare" (https://www.commonwealthfund.org/publications/issue-briefs/2016/jan/does-medicare-advantage-cost-less-traditional-medicare https://www.commonwealthfund.org/publications/issue-briefs/2...).