4 ms·

Why is Health Care So Expensive?

6 points by fogus 15y ago

jianshen 15y ago
As an aside, I'm curious who all the startups/disruptors are in the consumer healthcare industry? Closing the information asymmetry in consumer healthcare seems like an obvious opportunity.
ctdonath 15y ago
Because, understandably, everyone wants the very best (usually equating to the most expensive) health care services & products available. We would self-limit this to reflect our income, assets and credit limits, but as that still doesn't buy the care we want/need/demand, we all pool our resources into insurance funds so those of us needing more than we can afford can buy it (trust me, I know, having gone from "you need heart surgery" to the O.R. in 10 days flat). This increases the demand for expensive services, and the ability to pay for them. By sharing the costs, we all can access more expensive services as needed - and, by the way, we find the overall costs rising as a consequence. It's the natural supply-and-demand consequence of spreading costs to achieve manageable payments, same as mortgages (would you buy a quarter-million-dollar house for cash? how about paying over 30 years, plus a little interest?) and student loans (would you sign up for a degree program if you couldn't pay for it now? if you could pay over 20 years?) People make arrangements to pay for what they otherwise couldn't afford (thank you, accountants), which has the natural consequence of raising the prices since more people can now afford limited resources. Prices keep going up until the supply-and-demand equilibrium is reached, which changes every time there's a new way for people to finagle payments so they can get what they couldn't before.
- petervandijck 15y ago
  Expensive services aren't the reason health-care is so expensive. Not only is it a circular argument, it's also easy to disprove: look at other countries, where people get the same "expensive services" much cheaper.
Hyena 15y ago
It's worth noting that healthcare hasn't seen the kind of productivity explosion other areas have. It's still in many cases a more "artisanal" discipline vis-a-vis manufacturing, etc. The major bright spot has been pharmaceuticals, which are industrialized; I think we know the broad outlines of how to industrialized medicine, but also that the technical hurdles are among the largest ever faced.
DrJ 15y ago
>4. Let them get sick Never use preventative care I guess

6 points by fogus 15y ago

As an aside, I'm curious who all the startups/disruptors are in the consumer healthcare industry? Closing the information asymmetry in consumer healthcare seems like an obvious opportunity.

ctdonath 15y ago

Because, understandably, everyone wants the very best (usually equating to the most expensive) health care services & products available. We would self-limit this to reflect our income, assets and credit limits, but as that still doesn't buy the care we want/need/demand, we all pool our resources into insurance funds so those of us needing more than we can afford can buy it (trust me, I know, having gone from "you need heart surgery" to the O.R. in 10 days flat). This increases the demand for expensive services, and the ability to pay for them. By sharing the costs, we all can access more expensive services as needed - and, by the way, we find the overall costs rising as a consequence. It's the natural supply-and-demand consequence of spreading costs to achieve manageable payments, same as mortgages (would you buy a quarter-million-dollar house for cash? how about paying over 30 years, plus a little interest?) and student loans (would you sign up for a degree program if you couldn't pay for it now? if you could pay over 20 years?) People make arrangements to pay for what they otherwise couldn't afford (thank you, accountants), which has the natural consequence of raising the prices since more people can now afford limited resources. Prices keep going up until the supply-and-demand equilibrium is reached, which changes every time there's a new way for people to finagle payments so they can get what they couldn't before.

petervandijck 15y ago
Expensive services aren't the reason health-care is so expensive. Not only is it a circular argument, it's also easy to disprove: look at other countries, where people get the same "expensive services" much cheaper.

Hyena 15y ago

It's worth noting that healthcare hasn't seen the kind of productivity explosion other areas have. It's still in many cases a more "artisanal" discipline vis-a-vis manufacturing, etc. The major bright spot has been pharmaceuticals, which are industrialized; I think we know the broad outlines of how to industrialized medicine, but also that the technical hurdles are among the largest ever faced.

DrJ 15y ago

>4. Let them get sick Never use preventative care I guess