4 ms·

Extremely high barrier to entry + (necessary) complex regulatory structure = industry with fewer players. And in that situation, you've basically got breeding

Extremely high barrier to entry + (necessary) complex regulatory structure = industry with fewer players. And in that situation, you've basically got breeding grounds for cartels and price-fixing. Even if not all the players hold the line, prices will take a long time to come down rather than how quickly they would in a high-competition market. Heck look at how long it took carriers to stop charging insane money for SMS! It did eventually happen, but over the course of years as each carrier in turn put through small incremental price reductions to show growth for shareholders.

mschuster91 6y ago
> Extremely high barrier to entry + (necessary) complex regulatory structure = industry with fewer players. > And in that situation, you've basically got breeding grounds for cartels and price-fixing. In Germany, we have the same situation (high barrier to entry - pharmacists need to study almost as much as doctors - and an insanely complex regulatory and billing scheme)... but we don't have issues that are relevant for the patients like the US has, because we have what the US lacks: a framework that has other people (=insurances + the government negotiating with pharma companies + government setting rates for medical services, the "GoÄ" ruleset) deal with the bullshit. A person under government-mandated insurance (88% of Germans) won't ever see a bill for prescribed treatments (although there are tiny co-pays for medicine like 5-10€ per pack, and 10€ a day for hospital stays limited to 280€ a year). People financially disadvantaged (= receiving government aid, Hartz IV) are limited to 42€ a year in total medical co-pay, everything above that is waived.
- johnzim 6y ago
  I agree, but I'd note that as you've pointed out, Germany essentially has systems in place to mitigate the default behavior that arises out of the 'few players' problem. Almost all countries do. The US has plenty of healthcare regulations but none that successfully tackle cost. Nowhere near enough work is done to force price transparency, and it's not just that this data is known but not displayed (like a Pharmacy's formulary) but rather that it's often _not known at all_ because there's so much money sloshing around, people just stick their finger into the wind and pencil in their best guess. I think the German model is actually the easiest for the US to achieve and one with the best outcome - a public option under the ACA would be a great start. A *default* public option under the same scheme would be pretty much all we'd need to have the same framework to build from. I think I read that 75% of Germans choose the non-government option and the rest stick with it. That seems like a very healthy balance.
nashalo_nighly 6y ago
In a lot of countries there are even more regulations and yet the US pricing seems quite uniquely high

mschuster91 6y ago

> Extremely high barrier to entry + (necessary) complex regulatory structure = industry with fewer players. > And in that situation, you've basically got breeding grounds for cartels and price-fixing. In Germany, we have the same situation (high barrier to entry - pharmacists need to study almost as much as doctors - and an insanely complex regulatory and billing scheme)... but we don't have issues that are relevant for the patients like the US has, because we have what the US lacks: a framework that has other people (=insurances + the government negotiating with pharma companies + government setting rates for medical services, the "GoÄ" ruleset) deal with the bullshit. A person under government-mandated insurance (88% of Germans) won't ever see a bill for prescribed treatments (although there are tiny co-pays for medicine like 5-10€ per pack, and 10€ a day for hospital stays limited to 280€ a year). People financially disadvantaged (= receiving government aid, Hartz IV) are limited to 42€ a year in total medical co-pay, everything above that is waived.

johnzim 6y ago
I agree, but I'd note that as you've pointed out, Germany essentially has systems in place to mitigate the default behavior that arises out of the 'few players' problem. Almost all countries do. The US has plenty of healthcare regulations but none that successfully tackle cost. Nowhere near enough work is done to force price transparency, and it's not just that this data is known but not displayed (like a Pharmacy's formulary) but rather that it's often _not known at all_ because there's so much money sloshing around, people just stick their finger into the wind and pencil in their best guess. I think the German model is actually the easiest for the US to achieve and one with the best outcome - a public option under the ACA would be a great start. A *default* public option under the same scheme would be pretty much all we'd need to have the same framework to build from. I think I read that 75% of Germans choose the non-government option and the rest stick with it. That seems like a very healthy balance.

nashalo_nighly 6y ago

In a lot of countries there are even more regulations and yet the US pricing seems quite uniquely high