4 ms·

> Why are Americans paying so much more for healthcare than they used to? It's a pretty obvious answer, to be honest. Because it's a poorly regulated industry

> Why are Americans paying so much more for healthcare than they used to? It's a pretty obvious answer, to be honest. Because it's a poorly regulated industry for the purposes of minimizing cost to individuals. Over time, industry participants will continue to expand rent seeking practices and because the demand for health is almost perfectly inelastic, they can continue to get away with it. Too many middlemen, too much needless complexity, not enough regulatory oversight. I'm a rabid defender of the free market, but healthcare is not a regular market because nobody chooses to purchase healthcare services. You take them at whatever price they are offered whenever you need them. It's why we call users of these services "patients", not "consumers". Consumers are best served by private companies competing against each other in a nearly perfectly free market to offer the best goods and services at the lowest prices. Patients are not. Patients are best served by a well regulated industry in a nearly perfect not-free market in which their needs are prioritized over profit. Healthcare, just like education and security, are the foremost duties of the State.

jmyeet 2y ago
There is no such thing as a "free market". Any such "free market" only exists because of government regulation, oversight and enforcement. People try and carve out an exception for healthcare because of inelastic demand. While I agree individual insurance and tying insurance to employment are terrible models and for-profit healthcare is a terrible idea, I just don't think healthcare is as exceptional free market defenders make it out to be.
- RajT88 2y ago
  A perfectly free market results in monopolies and oligopolies, which are hardly competitive.
  - stvltvs 2y ago
    In other words, a free market paradoxically requires a regulatory regime.
- airstrike 2y ago
  I'm not sure you're agreeing or disagreeing, so apologies in advance if I misread you and apologies in hindsight if I was unclear with my original comment. I didn't claim free markets exist out of thin air. They need to be created and enforced, there's no dispute there. I'm also not saying that healthcare should be a free market. I'm arguing for more regulation in Healthcare (and Education) than I would suggest is needed in regular markets. Security is even more regulated as the state must have a monopoly on the legal use of force, and with that comes the duty to protect its citizens.
- bad_haircut72 2y ago
  The biggest barrier to the operation of the free market in medicine is the medical licence, especially as being a legal and economic barrier to prescribing drugs, ordering tests or referrals to the actual specialist who can help you
  - stvltvs 2y ago
    If a free market requires unlicensed medicine, then no thanks! There are reasonable arguments for removing licensure from some other professions, but medicine isn't one of those. I'd argue that the US is actually too lax, allowing too many entities to practice medicine without adhering to professional standards.
  - nradov 2y ago
    Most prescription drugs have significant risks and side effects. Or in the case of antibiotics, overuse leads to resistant bacteria. That's why they're controlled instead of being sold over the counter. Some states do allow allied health practitioners such as physician assistants and nurse practitioners to prescribe certain drugs. You can order most lab tests yourself. Those might not be covered by your health plan. https://www.labcorp.com/patients/buy-or-request-test-online https://www.labcorp.com/patients/buy-or-request-test-online Primary care physicians can do a lot to help you. Jumping straight to a specialist is usually a waste of limited resources. But some types of health plans such as a PPO don't necessarily require a referral in order to pay for a specialist claim.
vernon99 2y ago
Isn't it the opposite of what you're saying? I always had an impression that the high cost is actually due to low supply of doctors and this low supply is due to overregulation driven by the doctor lobby. Where (if I remember correctly) there're limits on the number of new MDs education institutions produce, or a number of licenses, forgot what exactly. The demand is inelastic, the supply totally is elastic in a normal situation, but it is made inelastic by regulations, restrictions, etc.
- 0_____0 2y ago
  I think you could classify the shortage of doctors as being due to "poor regulation." Some brief reading suggests that the supply of physicians is constrained by a cap on public funding residency slots lobbied for by the AMA.
- nradov 2y ago
  There is no limit on the number of MD degrees that accredited schools can grant. The immediate bottleneck on producing new doctors is funding for residency program slots. Every year, some students graduate with an MD but are unable to practice medicine because they don't get matched to a residency program (some do get matched the next year). Most of the funding for residency programs comes from the federal government, specifically Medicare. (Other organizations are free to fund residency slots separately from Medicare.) Congress imposed a cap on that funding and hasn't significantly increased it in years. At one point the AMA lobbied for the cap but they have since reversed their position and now lobby for an increase. https://savegme.org/ https://savegme.org/ Licenses to practice medicine are granted by state medical boards. There's no limit on those as long as you meet the criteria.
ifyoubuildit 2y ago
When you say poorly regulated, you don't mean a lack of regulation right? Just that the heaping mass of regulations that do exist give us the trash system we have? Cause I wonder if some people might take "poorly regulated" to mean "just not regulated enough", which I think is probably not the issue.
- airstrike 2y ago
  "Poorly regulated" as in "inadequately regulated". There's no shortage of bureaucracy but it doesn't deliver the right outcomes, which would great and affordable healthcare, a healthier population that doesn't actually need as much healthcare, minimize rent seeking, limit lobbying and corruption, better drug availability (I'm looking at you, pseudoephedrine and phenylephrine)...
ryathal 2y ago
There's not a market for healthcare in America though, at least not accessible to the average person. There is a market for Companies and insurance providers, insurance providers and doctors, but essentially nothing for a person and a doctor. It's practically impossible to actually shop for most medical procedures, by price, service quality, outcome, or any other potential metric. It's a little better for prescription drugs as different companies offer different sets of discounted drugs, but consolidation has hurt that too. Using prescription coverage, the patient is once again far removed from any actual market.
- nradov 2y ago
  Every major health plan now has an online price comparison tool that makes it easy for members to shop for elective medical treatments by price. Have you tried the one offered by your insurer? https://www.cms.gov/healthplan-price-transparency/consumers https://www.cms.gov/healthplan-price-transparency/consumers Service quality and outcomes are almost impossible to assess in a way that would be useful to consumers. Like if you see that a heart surgeon has a high rate of patient deaths then that could mean he's a quack, or it could mean he's extremely skilled and takes on the hardest cases that other surgeons won't even attempt. One thing consumers can do is check state public records for disciplinary actions.
  - dsr_ 2y ago
    Nothing a heart surgeon does is "elective". Nearly nothing "elective" is ever covered at all by insurance.
    - nradov 2y ago
      You appear to have confused elective with cosmetic. Most non-emergency procedures (including most heart surgeries) are classified as elective. There is some flexibility in choosing a provider and scheduling. These procedures are covered by insurance.
Beijinger 2y ago
Are there no (private) non-profit health care providers in the US?
- nradov 2y ago
  Many of the largest provider organizations are private non-profit such as Ascension. A lot of them are churches. They aren't necessarily any cheaper or higher quality than the for-profit providers.
  - Fluorescence 2y ago
    Looking at Ascension... seems to shaft patients in the same rapacious pursuit of profits as the others. Complaints about understaffing and service closures yet: record pay for executives, $18 billion in cash reserves, for-profit subsidiaries including $41 billion in a private equity fund... State Senator Chris Larson called Ascension “a profit machine that punishes the sick and rewards the greedy.”.
edanm 2y ago
> Over time, industry participants will continue to expand rent seeking practices and because the demand for health is almost perfectly inelastic, they can continue to get away with it. > I'm a rabid defender of the free market, but healthcare is not a regular market because nobody chooses to purchase healthcare services. You take them at whatever price they are offered whenever you need them. It's why we call users of these services "patients", not "consumers". Part of your answer is based on the idea that demand for healthcare is "almost perfectly" inelastic. Do you have any evidence that this is true? I'm fairly certain this is just not true, at all. People given free ability to consume more healthcare will absolutely consume more of it, doing extra tests that might not be necessary, visiting the doctor for things that otherwise they wouldn't. Even more than that, if you have a terrible toothache at 2am, would you wait til morning or pay extra to visit a 24-hour dentist, if one exists? Different people will answer this differently, and I assume price factors into this quite a bit. Which services are available 24/7 is very elastic, how fast services are available is elastic, etc. In fact, one possible answer to "Why are Americans paying so much more for healthcare" is because Americans are richer, and are paying more for everything.

jmyeet 2y ago

There is no such thing as a "free market". Any such "free market" only exists because of government regulation, oversight and enforcement. People try and carve out an exception for healthcare because of inelastic demand. While I agree individual insurance and tying insurance to employment are terrible models and for-profit healthcare is a terrible idea, I just don't think healthcare is as exceptional free market defenders make it out to be.

RajT88 2y ago
A perfectly free market results in monopolies and oligopolies, which are hardly competitive.
- stvltvs 2y ago
  In other words, a free market paradoxically requires a regulatory regime.
airstrike 2y ago
I'm not sure you're agreeing or disagreeing, so apologies in advance if I misread you and apologies in hindsight if I was unclear with my original comment. I didn't claim free markets exist out of thin air. They need to be created and enforced, there's no dispute there. I'm also not saying that healthcare should be a free market. I'm arguing for more regulation in Healthcare (and Education) than I would suggest is needed in regular markets. Security is even more regulated as the state must have a monopoly on the legal use of force, and with that comes the duty to protect its citizens.
bad_haircut72 2y ago
The biggest barrier to the operation of the free market in medicine is the medical licence, especially as being a legal and economic barrier to prescribing drugs, ordering tests or referrals to the actual specialist who can help you
- stvltvs 2y ago
  If a free market requires unlicensed medicine, then no thanks! There are reasonable arguments for removing licensure from some other professions, but medicine isn't one of those. I'd argue that the US is actually too lax, allowing too many entities to practice medicine without adhering to professional standards.
- nradov 2y ago
  Most prescription drugs have significant risks and side effects. Or in the case of antibiotics, overuse leads to resistant bacteria. That's why they're controlled instead of being sold over the counter. Some states do allow allied health practitioners such as physician assistants and nurse practitioners to prescribe certain drugs. You can order most lab tests yourself. Those might not be covered by your health plan. https://www.labcorp.com/patients/buy-or-request-test-online https://www.labcorp.com/patients/buy-or-request-test-online Primary care physicians can do a lot to help you. Jumping straight to a specialist is usually a waste of limited resources. But some types of health plans such as a PPO don't necessarily require a referral in order to pay for a specialist claim.

vernon99 2y ago

Isn't it the opposite of what you're saying? I always had an impression that the high cost is actually due to low supply of doctors and this low supply is due to overregulation driven by the doctor lobby. Where (if I remember correctly) there're limits on the number of new MDs education institutions produce, or a number of licenses, forgot what exactly. The demand is inelastic, the supply totally is elastic in a normal situation, but it is made inelastic by regulations, restrictions, etc.

0_____0 2y ago
I think you could classify the shortage of doctors as being due to "poor regulation." Some brief reading suggests that the supply of physicians is constrained by a cap on public funding residency slots lobbied for by the AMA.
nradov 2y ago
There is no limit on the number of MD degrees that accredited schools can grant. The immediate bottleneck on producing new doctors is funding for residency program slots. Every year, some students graduate with an MD but are unable to practice medicine because they don't get matched to a residency program (some do get matched the next year). Most of the funding for residency programs comes from the federal government, specifically Medicare. (Other organizations are free to fund residency slots separately from Medicare.) Congress imposed a cap on that funding and hasn't significantly increased it in years. At one point the AMA lobbied for the cap but they have since reversed their position and now lobby for an increase. https://savegme.org/ https://savegme.org/ Licenses to practice medicine are granted by state medical boards. There's no limit on those as long as you meet the criteria.

ifyoubuildit 2y ago

When you say poorly regulated, you don't mean a lack of regulation right? Just that the heaping mass of regulations that do exist give us the trash system we have? Cause I wonder if some people might take "poorly regulated" to mean "just not regulated enough", which I think is probably not the issue.

airstrike 2y ago
"Poorly regulated" as in "inadequately regulated". There's no shortage of bureaucracy but it doesn't deliver the right outcomes, which would great and affordable healthcare, a healthier population that doesn't actually need as much healthcare, minimize rent seeking, limit lobbying and corruption, better drug availability (I'm looking at you, pseudoephedrine and phenylephrine)...

ryathal 2y ago

There's not a market for healthcare in America though, at least not accessible to the average person. There is a market for Companies and insurance providers, insurance providers and doctors, but essentially nothing for a person and a doctor. It's practically impossible to actually shop for most medical procedures, by price, service quality, outcome, or any other potential metric. It's a little better for prescription drugs as different companies offer different sets of discounted drugs, but consolidation has hurt that too. Using prescription coverage, the patient is once again far removed from any actual market.

nradov 2y ago
Every major health plan now has an online price comparison tool that makes it easy for members to shop for elective medical treatments by price. Have you tried the one offered by your insurer? https://www.cms.gov/healthplan-price-transparency/consumers https://www.cms.gov/healthplan-price-transparency/consumers Service quality and outcomes are almost impossible to assess in a way that would be useful to consumers. Like if you see that a heart surgeon has a high rate of patient deaths then that could mean he's a quack, or it could mean he's extremely skilled and takes on the hardest cases that other surgeons won't even attempt. One thing consumers can do is check state public records for disciplinary actions.
- dsr_ 2y ago
  Nothing a heart surgeon does is "elective". Nearly nothing "elective" is ever covered at all by insurance.
  - nradov 2y ago
    You appear to have confused elective with cosmetic. Most non-emergency procedures (including most heart surgeries) are classified as elective. There is some flexibility in choosing a provider and scheduling. These procedures are covered by insurance.

Beijinger 2y ago

Are there no (private) non-profit health care providers in the US?

nradov 2y ago
Many of the largest provider organizations are private non-profit such as Ascension. A lot of them are churches. They aren't necessarily any cheaper or higher quality than the for-profit providers.
- Fluorescence 2y ago
  Looking at Ascension... seems to shaft patients in the same rapacious pursuit of profits as the others. Complaints about understaffing and service closures yet: record pay for executives, $18 billion in cash reserves, for-profit subsidiaries including $41 billion in a private equity fund... State Senator Chris Larson called Ascension “a profit machine that punishes the sick and rewards the greedy.”.

edanm 2y ago

> Over time, industry participants will continue to expand rent seeking practices and because the demand for health is almost perfectly inelastic, they can continue to get away with it. > I'm a rabid defender of the free market, but healthcare is not a regular market because nobody chooses to purchase healthcare services. You take them at whatever price they are offered whenever you need them. It's why we call users of these services "patients", not "consumers". Part of your answer is based on the idea that demand for healthcare is "almost perfectly" inelastic. Do you have any evidence that this is true? I'm fairly certain this is just not true, at all. People given free ability to consume more healthcare will absolutely consume more of it, doing extra tests that might not be necessary, visiting the doctor for things that otherwise they wouldn't. Even more than that, if you have a terrible toothache at 2am, would you wait til morning or pay extra to visit a 24-hour dentist, if one exists? Different people will answer this differently, and I assume price factors into this quite a bit. Which services are available 24/7 is very elastic, how fast services are available is elastic, etc. In fact, one possible answer to "Why are Americans paying so much more for healthcare" is because Americans are richer, and are paying more for everything.