8 ms·

I thought "free markets" where supposed to facilitate fair value discovery?

by axlee 6y ago

elevenoh 6y ago
Look at Canada, we're spending tax $ on health care per capita each year, yet wait times & outcome success has plateued. This is about more than 'free markets', it's arguably more about regulatory capture by the major entities in health care. The health care industry is hand in hand with education as top of the 'scam index' industries. Yet criticism of health care is relatively 'off limits', and there's low competitive incentive to correct/draw attention to this. 'e.g. you're evil for wanting more efficient health care: why? doctors/nurses are already overworked & efficiency will mean jobs cuts of those at the lowest rung'
prostoalex 6y ago
It does for less regulated markets, which is why you get those promotional mailers with promotional prices on LASIC or teeth whitening. Medical lobby benefits from high barriers to entry, suppressed competition (from foreign doctors or medical tourism companies able to fly their customers abroad) and opaque pricing. Uninformed consumer forced to shop locally is rarely able to extract best pricing. You can look at the annual fear-mongering fairs where medical lobby has been attempting to insert itself as a rent-seeker into kidney dialysis services in California. It's not like those industries are run by altruists, but on TV concerned serious faces in white coats would tell you in alarmist tones how those centers are run without professional supervision and people with no medical training, but when you vote properly, some [highly paid] individual with medical credentials would make things so much better [albeit more expensive in the long run].
- techrat 6y ago
  Funny how it's only when regulation is involved that it begins to pull back the curtain.
  - maerF0x0 6y ago
    Consider that regulation makes a certain tier of solution effectively illegal. See https://www.youtube.com/watch?v=elq2mnHTFUY https://www.youtube.com/watch?v=elq2mnHTFUY I know this may look a little dystopian, but solutions of this sort would be illegal in the US and then folks would have no choice but to just go without any help at all. (Save for if charity/gov't step in). Same story with housing. Part of the reason we have homeless ness (or more realistically people living in cars) is because the homes they could afford are illegal. (Hence why somehow they can afford "home" with a motor).
    - techrat 6y ago
      Deregulation of telecoms. Now we have monopolies with no regulatory requirements to provide service to customers. Read: Verizon refusing to rebuild landline areas affected by severe storms. Removal of regulations for ISPs. Data caps. Throttling. Zero metering. Deep packet inspection. Data injection. Opt out (if you even can) tracking. Removal of oversight for agriculture and removal of animal welfare regulations. More contaminated products. More waste being dumped improperly. Like the argument about minimum wage. Wages aren't going to go up if they remove minimum wage as companies are already paying the least they can get away with. The "free market" simply cannot be trusted to regulate itself. The argument that this wouldn't happen in a "true free market" doesn't hold water. Nor that less regulations would make it easier for newer companies to compete: We've only seen the actual reality of such a policy. Less regulations make it easier for existing companies to fuck the consumer over. Regulations are written in blood. There is a reason they existed in the first place.
      - prostoalex 6y ago
        Whose blood was used in writing the regulations for the space program to ensure an exclusive vendor would get the contracts? https://www.extremetech.com/extreme/181469-spacex-sues-us-government-for-secretly-awarding-multi-billion-dollar-military-launch-contract-to-boeing-and-lockheed https://www.extremetech.com/extreme/181469-spacex-sues-us-go...
- ClumsyPilot 6y ago
  Ah another believer in infinite wisdom of free markets without regulation. This is a true believer, few people suggest we need no regulation in healthcare. How far are you willing to go, should we remove fire safety and return to the fun days where entire cities burned down like in the great fire of london. Should we deregulate the nuclear industry and let the market decide which reactor design is best and who should be allowed to enrich uranium
KoftaBob 6y ago
Yup, which shows that the healthcare system in the US is not even remotely a free market.
christophilus 6y ago
There hasn’t been a free market in US medicine in a long time.
Clubber 6y ago
Healthcare is an inelastic demand service. Also a free market requires an informed buyer. Lack of price transparency coupled with inelastic demand makes it highly resistant to traditional market forces. You've got other forces working on it like high barrier to entry to be a healthcare service provider, high upfront costs for equipment, very heavy (expensive) regulation, higher likelihood of legal costs, etc. It's like food. If you're starving, you'll do or pay whatever you have to to get nutrients.
- knightofmars 6y ago
  You are absolutely correct. Healthcare drives towards monopoly for the very reasons you describe.
datavirtue 6y ago
Because it was not a free market. Hospitals had the insurers by the balls, set the price, and forced them into secrecy contractually. It WAS a huge factor in Healthcare prices.
throw123123123 6y ago
The last thing I would call the healthcare market in the us is a free market.
EliRivers 6y ago
Slightly relevant historical aside; when Adam Smith was thinking about his famed free markets, it wasn't government regulation that he wanted them to be free of. They were to be made free BY government regulation and enforcement. What some markets seem to have become (such as this US medical market) are the self-same unfree markets that Adam Smith believed were so damaging. I for one would not be too upset to see the government hold a gun to the metaphorical heads of various bodies and organisations and tell them that they'd better start delivering a free market pretty damn quickly. Given a political class in the US that seems so obsessed with "free markets" (they're mostly not, of course - it's just sloganeering bullshit to enable weakening of protections and increased screwing over of everyone but the ruling classes), sure is a shitshow of captured, unfree markets.
randyrand 6y ago
The developing world often has a rather free market, and the prices are just that, cheap. In the US, it’s the most regulated service we offer. 1. the supply and instruction of doctors are regulated 2. the supply of hospitals are regulated (often by other hospitals!) 3. service for insurance is regulated 4. pharmaceuticals are regulated 5. physical medical tools are regulated 6. hospital facilities are regulated

I thought "free markets" where supposed to facilitate fair value discovery?

by axlee 6y ago

I thought "free markets" where supposed to facilitate fair value discovery?

Look at Canada, we're spending tax $ on health care per capita each year, yet wait times & outcome success has plateued. This is about more than 'free markets', it's arguably more about regulatory capture by the major entities in health care. The health care industry is hand in hand with education as top of the 'scam index' industries. Yet criticism of health care is relatively 'off limits', and there's low competitive incentive to correct/draw attention to this. 'e.g. you're evil for wanting more efficient health care: why? doctors/nurses are already overworked & efficiency will mean jobs cuts of those at the lowest rung'

prostoalex 6y ago

It does for less regulated markets, which is why you get those promotional mailers with promotional prices on LASIC or teeth whitening. Medical lobby benefits from high barriers to entry, suppressed competition (from foreign doctors or medical tourism companies able to fly their customers abroad) and opaque pricing. Uninformed consumer forced to shop locally is rarely able to extract best pricing. You can look at the annual fear-mongering fairs where medical lobby has been attempting to insert itself as a rent-seeker into kidney dialysis services in California. It's not like those industries are run by altruists, but on TV concerned serious faces in white coats would tell you in alarmist tones how those centers are run without professional supervision and people with no medical training, but when you vote properly, some [highly paid] individual with medical credentials would make things so much better [albeit more expensive in the long run].

techrat 6y ago
Funny how it's only when regulation is involved that it begins to pull back the curtain.
- maerF0x0 6y ago
  Consider that regulation makes a certain tier of solution effectively illegal. See https://www.youtube.com/watch?v=elq2mnHTFUY https://www.youtube.com/watch?v=elq2mnHTFUY I know this may look a little dystopian, but solutions of this sort would be illegal in the US and then folks would have no choice but to just go without any help at all. (Save for if charity/gov't step in). Same story with housing. Part of the reason we have homeless ness (or more realistically people living in cars) is because the homes they could afford are illegal. (Hence why somehow they can afford "home" with a motor).
  - techrat 6y ago
    Deregulation of telecoms. Now we have monopolies with no regulatory requirements to provide service to customers. Read: Verizon refusing to rebuild landline areas affected by severe storms. Removal of regulations for ISPs. Data caps. Throttling. Zero metering. Deep packet inspection. Data injection. Opt out (if you even can) tracking. Removal of oversight for agriculture and removal of animal welfare regulations. More contaminated products. More waste being dumped improperly. Like the argument about minimum wage. Wages aren't going to go up if they remove minimum wage as companies are already paying the least they can get away with. The "free market" simply cannot be trusted to regulate itself. The argument that this wouldn't happen in a "true free market" doesn't hold water. Nor that less regulations would make it easier for newer companies to compete: We've only seen the actual reality of such a policy. Less regulations make it easier for existing companies to fuck the consumer over. Regulations are written in blood. There is a reason they existed in the first place.
    - prostoalex 6y ago
      Whose blood was used in writing the regulations for the space program to ensure an exclusive vendor would get the contracts? https://www.extremetech.com/extreme/181469-spacex-sues-us-government-for-secretly-awarding-multi-billion-dollar-military-launch-contract-to-boeing-and-lockheed https://www.extremetech.com/extreme/181469-spacex-sues-us-go...
ClumsyPilot 6y ago
Ah another believer in infinite wisdom of free markets without regulation. This is a true believer, few people suggest we need no regulation in healthcare. How far are you willing to go, should we remove fire safety and return to the fun days where entire cities burned down like in the great fire of london. Should we deregulate the nuclear industry and let the market decide which reactor design is best and who should be allowed to enrich uranium

KoftaBob 6y ago

Yup, which shows that the healthcare system in the US is not even remotely a free market.

christophilus 6y ago

There hasn’t been a free market in US medicine in a long time.

Clubber 6y ago

Healthcare is an inelastic demand service. Also a free market requires an informed buyer. Lack of price transparency coupled with inelastic demand makes it highly resistant to traditional market forces. You've got other forces working on it like high barrier to entry to be a healthcare service provider, high upfront costs for equipment, very heavy (expensive) regulation, higher likelihood of legal costs, etc. It's like food. If you're starving, you'll do or pay whatever you have to to get nutrients.

knightofmars 6y ago
You are absolutely correct. Healthcare drives towards monopoly for the very reasons you describe.

datavirtue 6y ago

Because it was not a free market. Hospitals had the insurers by the balls, set the price, and forced them into secrecy contractually. It WAS a huge factor in Healthcare prices.

throw123123123 6y ago

The last thing I would call the healthcare market in the us is a free market.

EliRivers 6y ago

Slightly relevant historical aside; when Adam Smith was thinking about his famed free markets, it wasn't government regulation that he wanted them to be free of. They were to be made free BY government regulation and enforcement. What some markets seem to have become (such as this US medical market) are the self-same unfree markets that Adam Smith believed were so damaging. I for one would not be too upset to see the government hold a gun to the metaphorical heads of various bodies and organisations and tell them that they'd better start delivering a free market pretty damn quickly. Given a political class in the US that seems so obsessed with "free markets" (they're mostly not, of course - it's just sloganeering bullshit to enable weakening of protections and increased screwing over of everyone but the ruling classes), sure is a shitshow of captured, unfree markets.

randyrand 6y ago

The developing world often has a rather free market, and the prices are just that, cheap. In the US, it’s the most regulated service we offer. 1. the supply and instruction of doctors are regulated 2. the supply of hospitals are regulated (often by other hospitals!) 3. service for insurance is regulated 4. pharmaceuticals are regulated 5. physical medical tools are regulated 6. hospital facilities are regulated