5 ms·

This is probably a good example why naive market economics thinking is problematic. Any "ideal market" assumes some kind of demand elasticity, i.e. people will

by hannob 3y ago

This is probably a good example why naive market economics thinking is problematic. Any "ideal market" assumes some kind of demand elasticity, i.e. people will buy more when it's cheap and less when it's expensive. But for cancer drugs, that really shouldn't be the case. The amount of drugs a patient takes should be determined by the best science, not some market mechanism.

changoplatanero 3y ago
I don’t understand how you can ignite market forces in health care. How else can you balance priorities for all the different uses that people’s financial resources can be used for? What does it even mean to let science decide? No cap on spending?
- mathgeek 3y ago
  > What does it even mean to let science decide? In the case of cancer, it means a patient should be given the appropriate dose for their diagnosis, as determined by what science has shown to be effective.
  - MoreSEMI 3y ago
    This principle would just be summed up as an inelastic good in economic terms. Market forces apply wether or not we want them too. To me it seems, this would result in us being willing to pay any price for it, which may even be the correct principle. It should however, then not be surprising when cancer treatments cost 100s of thousands.
  - changoplatanero 3y ago
    Like imagine a few decades ago when it could have cost more than 1 billion dollars to sequence the dna of a cancer tumor. If science could show that it is effective in treating cancer to have the dna sequenced should the tax payers have paid 1 billion dollars to save one persons life? That would plainly be absurd.
- tialaramex 3y ago
  > What does it even mean to let science decide? No cap on spending? Typically, QALYs, Quality Adjusted Life Years. We decide how much (in dollar terms if you're just that fundamentalist about it, but person hours or other metrics are fine too) a QALY is worth, and we will spend no more than that on healthcare interventions. The set of situations where there's a viable intervention but it's too expensive isn't empty, but it's not large either, so, you just build a bureaucracy to handle those cases.
  - candiodari 3y ago
    For the love of God, don't do this. This will mean MBA's do 2 things: 1) on the medical provider end, find every possible excuse to charge 1% more and pay it out to themselves, not using it for patient care 2) on the insurance/government end, find every possible way to charge 1% less, no matter the cost So yes "let science decide" means to let doctors decide what care to provide (meaning you'd need a difficult admissions test for this class of people). Yes, they will cheat, which will benefit themselves, but also patients. And there's a limit, because doctors are fundamentally limited. And then you just eat the cost, and have a board (IMPORTANT: of doctors) weed out the worst abusers on a regular basis. And yes, if a doctor says "spend X on this patient", then we spend X on that patient. End of discussion. And yes, this is probably "mercantilist" instead of capitalist, and provides a fundamentally unfair advantage in the economy to people who manage to get the degree of medical doctor. In trade, you get good health care.
chii 3y ago
> But for cancer drugs, that really shouldn't be the case. The elasticity isn't in the amount, but in whether the patient obtains the drug. If there are few patients, the demand would be low.
josu 3y ago
Medicine is the textbook example of perfectly inelastic demand.
- bootsmann 3y ago
  Its not at all, customers can still use substitute products (which is what generics are in the first place). If demand was perfectly inelastic we would not be having the problem of generics manufacturers having to close down because their margins are too thin.
bregma 3y ago
Well obviously the enlightened consumer would simply choose not to have cancer when the price of treatment is too high or the supply too low, thus keeping everything in balance and the theory working perfectly. Ceteris paribus of course.
- ethanbond 3y ago
  Indeed! ”Now let’s assume a perfectly spherical cancer patient…”
- seventhson 3y ago
  "Ooo, the drugs for this cancer are cheap and plentiful. I'll choose this cancer for my terminal disease."
- LordShredda 3y ago
  That's kind of the point of regular health check ups
- jareklupinski 3y ago
  to be fair, it should be possible to study rates of cancer incidence for a given population and predict which drugs would be needed based on typical progression rates, with a national reserve of the ones that are less common to supply shortfalls as needed
someonewhocar3s 3y ago
[dead]
varispeed 3y ago
It's interesting how FED and central banks use naive market economics thinking to "fight" current inflation. Inflation up? Rates up. Zero consideration for what is actually causing it. That's grossly negligent and yet the execs get paid handsome money for this rubbish and won't face any consequences of ruining people's lives.
- credit_guy 3y ago
  > Zero consideration for what is actually causing it. You probably never listened to a Jerome Powell press conference. He spends so much time explaining what the causes of inflation are, and what the Fed can do about some of them. > yet the execs get paid handsome money for this rubbish What execs get paid handsome money? The Fed employees are government employees, their salary is public. Jerome Powell makes $200k/year [1]. The other Fed board members make less. Is that handsome money? [1] https://markets.businessinsider.com/news/stocks/jerome-powell-salary-fed-chairman-fair-central-bank-chief-economy-2023-2 https://markets.businessinsider.com/news/stocks/jerome-powel...
throwaway22032 3y ago
The actual scarcity of real materials, machinery, and labour in the world is not merely "some market mechanism". It's indirect and inexact, but it's not random.

by hannob 3y ago

changoplatanero 3y ago

I don’t understand how you can ignite market forces in health care. How else can you balance priorities for all the different uses that people’s financial resources can be used for? What does it even mean to let science decide? No cap on spending?

mathgeek 3y ago
> What does it even mean to let science decide? In the case of cancer, it means a patient should be given the appropriate dose for their diagnosis, as determined by what science has shown to be effective.
- MoreSEMI 3y ago
  This principle would just be summed up as an inelastic good in economic terms. Market forces apply wether or not we want them too. To me it seems, this would result in us being willing to pay any price for it, which may even be the correct principle. It should however, then not be surprising when cancer treatments cost 100s of thousands.
- changoplatanero 3y ago
  Like imagine a few decades ago when it could have cost more than 1 billion dollars to sequence the dna of a cancer tumor. If science could show that it is effective in treating cancer to have the dna sequenced should the tax payers have paid 1 billion dollars to save one persons life? That would plainly be absurd.
tialaramex 3y ago
> What does it even mean to let science decide? No cap on spending? Typically, QALYs, Quality Adjusted Life Years. We decide how much (in dollar terms if you're just that fundamentalist about it, but person hours or other metrics are fine too) a QALY is worth, and we will spend no more than that on healthcare interventions. The set of situations where there's a viable intervention but it's too expensive isn't empty, but it's not large either, so, you just build a bureaucracy to handle those cases.
- candiodari 3y ago
  For the love of God, don't do this. This will mean MBA's do 2 things: 1) on the medical provider end, find every possible excuse to charge 1% more and pay it out to themselves, not using it for patient care 2) on the insurance/government end, find every possible way to charge 1% less, no matter the cost So yes "let science decide" means to let doctors decide what care to provide (meaning you'd need a difficult admissions test for this class of people). Yes, they will cheat, which will benefit themselves, but also patients. And there's a limit, because doctors are fundamentally limited. And then you just eat the cost, and have a board (IMPORTANT: of doctors) weed out the worst abusers on a regular basis. And yes, if a doctor says "spend X on this patient", then we spend X on that patient. End of discussion. And yes, this is probably "mercantilist" instead of capitalist, and provides a fundamentally unfair advantage in the economy to people who manage to get the degree of medical doctor. In trade, you get good health care.

chii 3y ago

> But for cancer drugs, that really shouldn't be the case. The elasticity isn't in the amount, but in whether the patient obtains the drug. If there are few patients, the demand would be low.

josu 3y ago

Medicine is the textbook example of perfectly inelastic demand.

bootsmann 3y ago
Its not at all, customers can still use substitute products (which is what generics are in the first place). If demand was perfectly inelastic we would not be having the problem of generics manufacturers having to close down because their margins are too thin.

bregma 3y ago

Well obviously the enlightened consumer would simply choose not to have cancer when the price of treatment is too high or the supply too low, thus keeping everything in balance and the theory working perfectly. Ceteris paribus of course.

ethanbond 3y ago
Indeed! ”Now let’s assume a perfectly spherical cancer patient…”
seventhson 3y ago
"Ooo, the drugs for this cancer are cheap and plentiful. I'll choose this cancer for my terminal disease."
LordShredda 3y ago
That's kind of the point of regular health check ups
jareklupinski 3y ago
to be fair, it should be possible to study rates of cancer incidence for a given population and predict which drugs would be needed based on typical progression rates, with a national reserve of the ones that are less common to supply shortfalls as needed

someonewhocar3s 3y ago

[dead]

varispeed 3y ago

It's interesting how FED and central banks use naive market economics thinking to "fight" current inflation. Inflation up? Rates up. Zero consideration for what is actually causing it. That's grossly negligent and yet the execs get paid handsome money for this rubbish and won't face any consequences of ruining people's lives.

credit_guy 3y ago
> Zero consideration for what is actually causing it. You probably never listened to a Jerome Powell press conference. He spends so much time explaining what the causes of inflation are, and what the Fed can do about some of them. > yet the execs get paid handsome money for this rubbish What execs get paid handsome money? The Fed employees are government employees, their salary is public. Jerome Powell makes $200k/year [1]. The other Fed board members make less. Is that handsome money? [1] https://markets.businessinsider.com/news/stocks/jerome-powell-salary-fed-chairman-fair-central-bank-chief-economy-2023-2 https://markets.businessinsider.com/news/stocks/jerome-powel...

throwaway22032 3y ago

The actual scarcity of real materials, machinery, and labour in the world is not merely "some market mechanism". It's indirect and inexact, but it's not random.