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How would higher hospital density help quell healthcare costs, though? Isn't that just more infrastructure, administration overhead and staffing that victims h

How would higher hospital density help quell healthcare costs, though? Isn't that just more infrastructure, administration overhead and staffing that victims have to pay for, in the end?

wat10000 1y ago
Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one?
- ceejayoz 1y ago
  I mean, that depends. A town with ten people and five grocery stores will be inefficient, and probably have very expensive produce as a result.
  - wat10000 1y ago
    A town with ten people won't have five grocery stores in the first place. Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it.
    - ceejayoz 1y ago
      > Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it. Tell that to the waves of cupcake shops, craft breweries, and now cannabis dispensaries in my area.
      - wat10000 1y ago
        Right, luxury items are definitely an apt analogy here. Man, people really do love to argue, huh.
        ceejayoz 1y ago
        The point is that business decisions aren't magically correct. People can, and do, open stores in oversaturated markets. When your cupcake shop flops, that's sad; when hospitals close, that can be devastating to a community. It makes at least theoretical sense for states to try and prevent that impact.
        wat10000 1y ago
        Avoid the impact from hospital closures by preventing them from opening in the first place? Hospital closures are devastating if they're the only one in the area, or remaining facilities don't have enough slack. They aren't devastating in an oversaturated market.
        ceejayoz 1y ago
        > Avoid the impact from hospital closures by preventing them from opening in the first place? Yes? That's the idea. I won't say it always works, but it's the idea; preventing the existing facilities from closing. > They aren't devastating in an oversaturated market. It certainly can be, if the oversaturation puts all of them on shaky financial grounds.
    - goodpoint 1y ago
      There is such thing as market failure due to oversaturation.
- palmotea 1y ago
  > Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one? I'm not defending the "Certificate of Need" regulations, but your thinking is sloppy: healthcare is not a product like bananas. That analogy will mislead more than it will inform. If every person has to buy 10 bananas a day or they will die, the town with 5 stores may have more expensive bananas, because they can just raise prices to cover the excess capacity and people will pay.
  - wat10000 1y ago
    If we look at "food" more generically, rather than bananas specifically, we are literally in that situation where every person has to have X amount per day or they will die. And competition still works great. There are two things that set healthcare apart here. One is that sometimes people need unusual treatments to stay alive that are extremely expensive, and our desire not to let people die is at odds with the normal market mechanism where products that cost too much just don't get purchased. The other is that sometimes people have emergencies so urgent they can't really choose their provider. But the vast majority of healthcare doesn't fall into those categories, and normal market mechanisms work fine for those. Competition would lower prices for most healthcare just like it does for food and everything else.
  - ajmurmann 1y ago
    They can't just raise the prices because people will bring their business to the competition. I've personally done this for CT scans. In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k. The same works for non-emergency surgery as well. Take a look at https://surgerycenterok.com/ https://surgerycenterok.com/ it's such a breath of fresh air to see the full price for each procedure right there. People travel there from all over the country to get needed procedures. So competition clearly works but the system doesn't really enable it. For example insurers don't want to work with the linked center because they won't give them rebates but charge everyone the same price. More details: https://www.econtalk.org/keith-smith-on-free-market-health-care/ https://www.econtalk.org/keith-smith-on-free-market-health-c...
    - 1y ago
- h2zizzle 1y ago
  The town where you can see the banana prices on the shelves, if not online, and where there's a collective refusal to pay (perhaps through an organizer payer) if the price is too high.
- cogman10 1y ago
  In the town closest to central america. The labor to produce, ship, and shelve the banana determine it's cost along with whatever margin the store that sells the banana is willing to take. Walmart, for example, could be perfectly willing to sell a banana at a loss if they think that will get you in to buy a TV. This is why dollar stores exist and often kill off local grocers. They can sell a lot of non-perishable goods at a loss and win back by understaffing the location and overcharging on non-perishable goods. I live in a city with probably around 50 different clinics, but they are all associated with 3 major medical groups. It isn't a lack of buildings that's preventing competition.
- anubistheta 1y ago
  Exactly. The more suppliers are in a market, the more competition there is. Thus lower prices and a better selection. People don't like a monopoly is other areas of life. Healthcare is no different.
- myrmidon 1y ago
  I don't think that is a good comparison at all. Unlike grocery stores, hospital ERs don't get frequent repeat customer interaction, so that makes the competition aspect basically completely inapplicable. As typical ER visitor, - You wont know what "quality" of care you are going to get beforehand - You will have very limited capability of selecting the hospital - You will be unable to compare prices beforehand So why would any of those 5 hypothetical hospitals decrease prices? More competitors won't do shit if the market is uncompetitive by design.
  - wat10000 1y ago
    An ER is only a small part of what a typical hospital provides. And life-threatening, must-get-treatment-immediately-or-die emergencies are only a small part of what a typical ER provides. Yes, there are some kinds of care that aren't very amenable to competitive market forces, but the vast majority is.
    - deleted 1y ago
      [deleted]
  - esafak 1y ago
    That's what reviews and word of mouth are for. Don't you do research before picking a hospital and doctor? We do need price transparency though.
    - myrmidon 1y ago
      > Don't you do research before picking a hospital and doctor? No. Preventing rapid unplanned end of life is the main purpose of hospitals in my view. Enough time to make a choice of hospitals (or even to collect information on specific hospitals) is a luxury that I would not expect patients to have.
      - esafak 1y ago
        For every emergency I plan a visit to the hospital at least 10-20 times. Emergencies are the exception, by definition. I think everyone with health insurance, which the Census Bureau says is 92% of Americans, since they will not go directly to the ER.
- jasonlotito 1y ago
  1. One accepts only Visa, one only MC, one only Amex, one only cash, and one only accept bitcoin. 2. One offers bananas to walk in visitors, but the others have a minimum wait time of 1 month to a year. 3. One is a mile away. One is an hour away. Still in the same county. 4. None of them offer an easy to understand menu. You can't just order a banana. You ahve to order Banana Services and meet with Banana specialists. You can't take the banana home. 5. You wake up in a banana shop and you didn't get a chance to shop around before being presented with a bill. They don't take your payment of choice, so it's 10 times as expensive. 6. Some won't let you buy a banana. Instead, you have to buy a banana service. Per banana pricing is the lowest here, but the total cost is higher if you just want a banana. Which banana store do you buy from? A, B, C, D, or E? I'll take the first choice you make and let you know if you picked correctly. Anything other than the correct choice is a failure.
- taeric 1y ago
  My expectation on cost of banana will be more on how much it costs to ship to said town? Similarly, which town has higher tax burden to cover? Assuming any sort of health inspection on places that store food, the town with more stores has a higher burden. Which is all to say, my gut is it is far more complicated than that allows for. Not a useless model, but also not a very actionable one.
pfdietz 1y ago
But the victims don't have to pay for it -- excess infrastructure is a bad investment that those who built it pay for. The builders are not guaranteed a return on their investment.
- myrmidon 1y ago
  I don't really get it. If you are arguing that the customer is not paying for inefficient providers, then I strongly disagree. Customers always end up paying for inefficient supply chains. If you end up with an inefficient allocation of hospitals/doctors (local overprovisioning), it's always gonna be the patients that are gonna pick up the bill for this in the end through higher average prices. Inefficiencies are doubly bad because you potentially don't just pay the pure cost for the inefficiency (middlemen, waste etc.) you even pay for margins on top. I think the assumption that such inefficiencies could lead to actual savings for customers (by magically making the providers decrease their profit margins) is highly overoptimistic.
  - pfdietz 1y ago
    > Customers always end up paying for inefficient supply chains. Obviously not. There is nothing that compels a customer to do business with an inferior competitor, if there is an alternative. The end result of having a sufficiently inefficient supply chain can be that the company involved goes out of business, as it cannot operate at a profit.
vlovich123 1y ago
No, actually it would be lower for the same reason competition always leads to lower prices. Uncompetitive hospitals that can’t meet need would naturally go out of business. A “need” certificate is similar to the cap that med schools have - it’s effectively a pricing cartel to keep salaries/revenue high
- milesskorpen 1y ago
  There are extremely high fixed costs + we require hospitals to do unprofitable work (they aren't allowed to turn anyone away from the ED, for example). In many small regional chains, their profitable hospitals in one area fund unprofitable hospitals in other regions. Overall we have a crisis of hospitals shutting down, not a crisis of oversupply.
- jplrssn 1y ago
  > competition always leads to lower prices I don't see how this could be true for emergency visits. Would an ambulance drive you to the cheapest hospital within some fixed radius?
  - hamdingers 1y ago
    Hospitals typically lose money on emergency visits and make it back on scheduled inpatient care and outpatient services. This would accelerate a poor performing hospital's demise, because ambulances will go to the closest one but patients who have options will look elsewhere.
  - theptip 1y ago
    If you now have two ERs within driving range, you have the choice to go to the cheaper one if you are conscious and in a stable enough condition to reflect. This is the sort of thing people already think about in the US.
- thunderfork 1y ago
  [dead]
opo 1y ago
Here is a summary of a number of studies of the effects of Certificates of Need: https://ij.org/report/striving-for-better-care/overwhelming-evidence-shows-that-con-laws-lead-to-higher-health-care-spending/ https://ij.org/report/striving-for-better-care/overwhelming-...

How would higher hospital density help quell healthcare costs, though? Isn't that just more infrastructure, administration overhead and staffing that victims have to pay for, in the end?

wat10000 1y ago

Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one?

ceejayoz 1y ago
I mean, that depends. A town with ten people and five grocery stores will be inefficient, and probably have very expensive produce as a result.
- wat10000 1y ago
  A town with ten people won't have five grocery stores in the first place. Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it.
  - ceejayoz 1y ago
    > Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it. Tell that to the waves of cupcake shops, craft breweries, and now cannabis dispensaries in my area.
    - wat10000 1y ago
      Right, luxury items are definitely an apt analogy here. Man, people really do love to argue, huh.
      - ceejayoz 1y ago
        The point is that business decisions aren't magically correct. People can, and do, open stores in oversaturated markets. When your cupcake shop flops, that's sad; when hospitals close, that can be devastating to a community. It makes at least theoretical sense for states to try and prevent that impact.
        wat10000 1y ago
        Avoid the impact from hospital closures by preventing them from opening in the first place? Hospital closures are devastating if they're the only one in the area, or remaining facilities don't have enough slack. They aren't devastating in an oversaturated market.
        ceejayoz 1y ago
        > Avoid the impact from hospital closures by preventing them from opening in the first place? Yes? That's the idea. I won't say it always works, but it's the idea; preventing the existing facilities from closing. > They aren't devastating in an oversaturated market. It certainly can be, if the oversaturation puts all of them on shaky financial grounds.
  - goodpoint 1y ago
    There is such thing as market failure due to oversaturation.
palmotea 1y ago
> Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one? I'm not defending the "Certificate of Need" regulations, but your thinking is sloppy: healthcare is not a product like bananas. That analogy will mislead more than it will inform. If every person has to buy 10 bananas a day or they will die, the town with 5 stores may have more expensive bananas, because they can just raise prices to cover the excess capacity and people will pay.
- wat10000 1y ago
  If we look at "food" more generically, rather than bananas specifically, we are literally in that situation where every person has to have X amount per day or they will die. And competition still works great. There are two things that set healthcare apart here. One is that sometimes people need unusual treatments to stay alive that are extremely expensive, and our desire not to let people die is at odds with the normal market mechanism where products that cost too much just don't get purchased. The other is that sometimes people have emergencies so urgent they can't really choose their provider. But the vast majority of healthcare doesn't fall into those categories, and normal market mechanisms work fine for those. Competition would lower prices for most healthcare just like it does for food and everything else.
- ajmurmann 1y ago
  They can't just raise the prices because people will bring their business to the competition. I've personally done this for CT scans. In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k. The same works for non-emergency surgery as well. Take a look at https://surgerycenterok.com/ https://surgerycenterok.com/ it's such a breath of fresh air to see the full price for each procedure right there. People travel there from all over the country to get needed procedures. So competition clearly works but the system doesn't really enable it. For example insurers don't want to work with the linked center because they won't give them rebates but charge everyone the same price. More details: https://www.econtalk.org/keith-smith-on-free-market-health-care/ https://www.econtalk.org/keith-smith-on-free-market-health-c...
  - 1y ago
h2zizzle 1y ago
The town where you can see the banana prices on the shelves, if not online, and where there's a collective refusal to pay (perhaps through an organizer payer) if the price is too high.
cogman10 1y ago
In the town closest to central america. The labor to produce, ship, and shelve the banana determine it's cost along with whatever margin the store that sells the banana is willing to take. Walmart, for example, could be perfectly willing to sell a banana at a loss if they think that will get you in to buy a TV. This is why dollar stores exist and often kill off local grocers. They can sell a lot of non-perishable goods at a loss and win back by understaffing the location and overcharging on non-perishable goods. I live in a city with probably around 50 different clinics, but they are all associated with 3 major medical groups. It isn't a lack of buildings that's preventing competition.
anubistheta 1y ago
Exactly. The more suppliers are in a market, the more competition there is. Thus lower prices and a better selection. People don't like a monopoly is other areas of life. Healthcare is no different.
myrmidon 1y ago
I don't think that is a good comparison at all. Unlike grocery stores, hospital ERs don't get frequent repeat customer interaction, so that makes the competition aspect basically completely inapplicable. As typical ER visitor, - You wont know what "quality" of care you are going to get beforehand - You will have very limited capability of selecting the hospital - You will be unable to compare prices beforehand So why would any of those 5 hypothetical hospitals decrease prices? More competitors won't do shit if the market is uncompetitive by design.
- wat10000 1y ago
  An ER is only a small part of what a typical hospital provides. And life-threatening, must-get-treatment-immediately-or-die emergencies are only a small part of what a typical ER provides. Yes, there are some kinds of care that aren't very amenable to competitive market forces, but the vast majority is.
  - deleted 1y ago
    [deleted]
- esafak 1y ago
  That's what reviews and word of mouth are for. Don't you do research before picking a hospital and doctor? We do need price transparency though.
  - myrmidon 1y ago
    > Don't you do research before picking a hospital and doctor? No. Preventing rapid unplanned end of life is the main purpose of hospitals in my view. Enough time to make a choice of hospitals (or even to collect information on specific hospitals) is a luxury that I would not expect patients to have.
    - esafak 1y ago
      For every emergency I plan a visit to the hospital at least 10-20 times. Emergencies are the exception, by definition. I think everyone with health insurance, which the Census Bureau says is 92% of Americans, since they will not go directly to the ER.
jasonlotito 1y ago
1. One accepts only Visa, one only MC, one only Amex, one only cash, and one only accept bitcoin. 2. One offers bananas to walk in visitors, but the others have a minimum wait time of 1 month to a year. 3. One is a mile away. One is an hour away. Still in the same county. 4. None of them offer an easy to understand menu. You can't just order a banana. You ahve to order Banana Services and meet with Banana specialists. You can't take the banana home. 5. You wake up in a banana shop and you didn't get a chance to shop around before being presented with a bill. They don't take your payment of choice, so it's 10 times as expensive. 6. Some won't let you buy a banana. Instead, you have to buy a banana service. Per banana pricing is the lowest here, but the total cost is higher if you just want a banana. Which banana store do you buy from? A, B, C, D, or E? I'll take the first choice you make and let you know if you picked correctly. Anything other than the correct choice is a failure.
taeric 1y ago
My expectation on cost of banana will be more on how much it costs to ship to said town? Similarly, which town has higher tax burden to cover? Assuming any sort of health inspection on places that store food, the town with more stores has a higher burden. Which is all to say, my gut is it is far more complicated than that allows for. Not a useless model, but also not a very actionable one.

pfdietz 1y ago

But the victims don't have to pay for it -- excess infrastructure is a bad investment that those who built it pay for. The builders are not guaranteed a return on their investment.

myrmidon 1y ago
I don't really get it. If you are arguing that the customer is not paying for inefficient providers, then I strongly disagree. Customers always end up paying for inefficient supply chains. If you end up with an inefficient allocation of hospitals/doctors (local overprovisioning), it's always gonna be the patients that are gonna pick up the bill for this in the end through higher average prices. Inefficiencies are doubly bad because you potentially don't just pay the pure cost for the inefficiency (middlemen, waste etc.) you even pay for margins on top. I think the assumption that such inefficiencies could lead to actual savings for customers (by magically making the providers decrease their profit margins) is highly overoptimistic.
- pfdietz 1y ago
  > Customers always end up paying for inefficient supply chains. Obviously not. There is nothing that compels a customer to do business with an inferior competitor, if there is an alternative. The end result of having a sufficiently inefficient supply chain can be that the company involved goes out of business, as it cannot operate at a profit.

vlovich123 1y ago

No, actually it would be lower for the same reason competition always leads to lower prices. Uncompetitive hospitals that can’t meet need would naturally go out of business. A “need” certificate is similar to the cap that med schools have - it’s effectively a pricing cartel to keep salaries/revenue high

milesskorpen 1y ago
There are extremely high fixed costs + we require hospitals to do unprofitable work (they aren't allowed to turn anyone away from the ED, for example). In many small regional chains, their profitable hospitals in one area fund unprofitable hospitals in other regions. Overall we have a crisis of hospitals shutting down, not a crisis of oversupply.
jplrssn 1y ago
> competition always leads to lower prices I don't see how this could be true for emergency visits. Would an ambulance drive you to the cheapest hospital within some fixed radius?
- hamdingers 1y ago
  Hospitals typically lose money on emergency visits and make it back on scheduled inpatient care and outpatient services. This would accelerate a poor performing hospital's demise, because ambulances will go to the closest one but patients who have options will look elsewhere.
- theptip 1y ago
  If you now have two ERs within driving range, you have the choice to go to the cheaper one if you are conscious and in a stable enough condition to reflect. This is the sort of thing people already think about in the US.
thunderfork 1y ago
[dead]

opo 1y ago

Here is a summary of a number of studies of the effects of Certificates of Need: https://ij.org/report/striving-for-better-care/overwhelming-evidence-shows-that-con-laws-lead-to-higher-health-care-spending/ https://ij.org/report/striving-for-better-care/overwhelming-...