5 ms·

> Health care is an unusual product in that it is difficult, and sometimes impossible, for the customer to say “no.” But there are other products that we absol

by ef4 14y ago

> Health care is an unusual product in that it is difficult, and sometimes impossible, for the customer to say “no.” But there are other products that we absolutely need to stay alive that don't suffer the runaway prices we see in healthcare. The best example is food. You can't say no to buying food. So why don't food sellers have us over a barrel? Because consumers see prices and force the many providers to bid competitively against each other. My point is that inelastic demand is not the fundamental cause of high costs in healthcare. It has much more to do with the many layers of abstraction we place between patient and provider that prevent price signals from passing through.

sliverstorm 14y ago
Food and healthcare are both inelastic demands, yes. But that doesn't mean they are comparable. I have 8 hours between hunger spikes; plenty of time to shop around. I know when I am going to be hungry, and I will be hungry again soon. The issue as I see it with healthcare is the the nature of the beast itself. When you are bleeding from the femoral artery, you don't have time to shop around, and you don't know when it will happen. Additionally, it is a rare event, unlike your drive for food.
- MoreMoschops 14y ago
  When you have one of the big ticket items that they make the big money on, such as cancer, you have a lot of time to shop around.
- InclinedPlane 14y ago
  I disagree that healthcare is an inelastic demand, it's obviously quite elastic. There are levels of service and of care. Take something like a broken femur for example. One person may opt for a cast and crutches and little else while someone else may opt for a motorized wheelchair and extensive hands-on rehabilitation therapy afterward. Or look at, say, prosthetics. There are amazing cutting-edge almost bionic prosthetic hands and legs these days, but does it make sense to bankrupt the public in order to guarantee everyone access to those who might want them? Or just look at something as simple as diet and exercise (what we know to have one of the biggest impacts on health), one person may be able to afford a personal chef and dietitian who can plan all their meals and to hire a personal trainer to keep them in shape, but many wouldn't be able to afford that or even necessarily want it. The notion that everyone should be guaranteed equal health outcomes is a very seductive one, but once you start digging into the details it falls apart quite rapidly.
  - LeeHunter 14y ago
    "The notion that everyone should be guaranteed equal health outcomes is a very seductive one, but once you start digging into the details it falls apart quite rapidly." Falls apart exactly how? Seems to work fine in just about every country that's tried it (which is most of the first world). Mind you, it's not really the health outcome that's guaranteed (obviously that's going to depend on individual constitution, age and lifestyle) but access to the same level of care is seen as a given. In my town recently there was a minor scandal when a pro hockey player showed up with a game injury at a local emergency ward and went to the head of the line. The hospital had to scramble to explain that his injury went through normal triage. You talk about bankrupting the public, but clearly it's the far more expensive US system that is bankrupting the public (along with providing worse outcomes overall). For those of use who have grown up with publicly funded healthcare, a fully private system seems primitive, barbaric and inhumane equivalent to having firefighting or police services exclusively for those who can afford it.
    - InclinedPlane 14y ago
      This explains why Canadians, including MPs, sometimes come to the US for care, and why the Queen of England went to a private hospital when she developed gastroenteritis, right? It's silly to imagine that there isn't or shouldn't be a relationship between level of care and cost of care, even if we desire for the costs of most common life-saving care to be "socialized" in some way. Demanding that all care be the best possible care is a non-starter because that's clearly not financially feasible. Some folks can afford to spend multiples of the average per capita GDP on their health care, and that's just not physically possible for everyone to do. As for your straw man about a "fully private system", I made no mention of that, nor have I advocated such. I was merely making an isolated point. You can put your pitchforks back in the shed and put down your "libertarianism = somalia!" signs. Our system is clearly broken, but the idea that other systems aren't also broken in various ways is naive. There's no silver bullet that will solve the problems of cost and access to health care, and that includes the extraordinarily naive idea of just making "government" pay for it all.
- snowwrestler 14y ago
  This is where the concept of health care "insurance" makes sense. We have car insurance and homeowner insurance for the same reason--to cover sudden, unexpected events. But modern health care "insurance" also covers the payment of goods and services that do NOT meet sudden and unexpected events. A huge portion of the health care industry services chronic ailments. Hunger could be considered a chronic ailment--it is not urgent, but must be managed at all times.
  - sliverstorm 14y ago
    Yeah, I agree. Things like birth control seem entirely at odds with the "insurance" model. I haven't a problem with subsidized birth control, but maybe such services should be part of a separate program?
Klinky 14y ago
The true costs of food are hidden in the heavy toll it takes on our environment, the poor or illegal labor situations used to harvest it, and the subsidies given out by the the government.
abstractbill 14y ago
One doesn't generally have a sudden and unexpected need for a very particular type of food that only relatively few specialists know how to produce.
- snowwrestler 14y ago
  But this is not where the vast majority of health care costs come from. They mostly come from the care of chronic ailments.
- jpdoctor 14y ago
  Exactly. As an example: One does not comparison shop for an ambulance service after a car accident, nor a surgeon after arriving at the hospital. And those charges for blood transfusions: Anyone up for a startup to find the lowest bidder?
- ef4 14y ago
  The relevant question is: what is keeping the supply of specialists from growing to meet the demand? The AMA is essentially a guild. Everything it does in the name of quality is also a highly-effective way to keep wages high for its members. And that's hardly a coincidence. Could an innovative medical school train a particular kind of specialist to be just as effective in half the time, at half the cost? We'll never know, because that kind of innovation is illegal. The balance between cost and quality is not black and white. Plenty of patients might very well prefer to trade off one for the other. Today they have no choice -- there is only one standard, and the providers have every incentive to make that standard as expensive as possible.
danielweber 14y ago
The very next sentence points out that the customer may be passed out and unable to form any opinion. Just reading your quote, though, (I read the comments before the article) I thought that the article was going to talk about how hard it is for even informed people to opt-out of expensive procedures. There was a news story just a week or two ago about a nurse refusing to perform CPR despite 911 demands, but the home the patient was in was set up to explicitly not perform CPR. Ezra Klein has linked before to "How Doctors Die". Here is the last HN talk about it https://news.ycombinator.com/item?id=5104430 https://news.ycombinator.com/item?id=5104430 (it has links to the prior talk on HN) Even doctors have to jump through incredible hoops to avoid ending up getting drastic procedures done on them, and even then there is no guarantee that the doctor in charge won't override your wishes and hook you up instead.

by ef4 14y ago

sliverstorm 14y ago

Food and healthcare are both inelastic demands, yes. But that doesn't mean they are comparable. I have 8 hours between hunger spikes; plenty of time to shop around. I know when I am going to be hungry, and I will be hungry again soon. The issue as I see it with healthcare is the the nature of the beast itself. When you are bleeding from the femoral artery, you don't have time to shop around, and you don't know when it will happen. Additionally, it is a rare event, unlike your drive for food.

MoreMoschops 14y ago
When you have one of the big ticket items that they make the big money on, such as cancer, you have a lot of time to shop around.
InclinedPlane 14y ago
I disagree that healthcare is an inelastic demand, it's obviously quite elastic. There are levels of service and of care. Take something like a broken femur for example. One person may opt for a cast and crutches and little else while someone else may opt for a motorized wheelchair and extensive hands-on rehabilitation therapy afterward. Or look at, say, prosthetics. There are amazing cutting-edge almost bionic prosthetic hands and legs these days, but does it make sense to bankrupt the public in order to guarantee everyone access to those who might want them? Or just look at something as simple as diet and exercise (what we know to have one of the biggest impacts on health), one person may be able to afford a personal chef and dietitian who can plan all their meals and to hire a personal trainer to keep them in shape, but many wouldn't be able to afford that or even necessarily want it. The notion that everyone should be guaranteed equal health outcomes is a very seductive one, but once you start digging into the details it falls apart quite rapidly.
- LeeHunter 14y ago
  "The notion that everyone should be guaranteed equal health outcomes is a very seductive one, but once you start digging into the details it falls apart quite rapidly." Falls apart exactly how? Seems to work fine in just about every country that's tried it (which is most of the first world). Mind you, it's not really the health outcome that's guaranteed (obviously that's going to depend on individual constitution, age and lifestyle) but access to the same level of care is seen as a given. In my town recently there was a minor scandal when a pro hockey player showed up with a game injury at a local emergency ward and went to the head of the line. The hospital had to scramble to explain that his injury went through normal triage. You talk about bankrupting the public, but clearly it's the far more expensive US system that is bankrupting the public (along with providing worse outcomes overall). For those of use who have grown up with publicly funded healthcare, a fully private system seems primitive, barbaric and inhumane equivalent to having firefighting or police services exclusively for those who can afford it.
  - InclinedPlane 14y ago
    This explains why Canadians, including MPs, sometimes come to the US for care, and why the Queen of England went to a private hospital when she developed gastroenteritis, right? It's silly to imagine that there isn't or shouldn't be a relationship between level of care and cost of care, even if we desire for the costs of most common life-saving care to be "socialized" in some way. Demanding that all care be the best possible care is a non-starter because that's clearly not financially feasible. Some folks can afford to spend multiples of the average per capita GDP on their health care, and that's just not physically possible for everyone to do. As for your straw man about a "fully private system", I made no mention of that, nor have I advocated such. I was merely making an isolated point. You can put your pitchforks back in the shed and put down your "libertarianism = somalia!" signs. Our system is clearly broken, but the idea that other systems aren't also broken in various ways is naive. There's no silver bullet that will solve the problems of cost and access to health care, and that includes the extraordinarily naive idea of just making "government" pay for it all.
snowwrestler 14y ago
This is where the concept of health care "insurance" makes sense. We have car insurance and homeowner insurance for the same reason--to cover sudden, unexpected events. But modern health care "insurance" also covers the payment of goods and services that do NOT meet sudden and unexpected events. A huge portion of the health care industry services chronic ailments. Hunger could be considered a chronic ailment--it is not urgent, but must be managed at all times.
- sliverstorm 14y ago
  Yeah, I agree. Things like birth control seem entirely at odds with the "insurance" model. I haven't a problem with subsidized birth control, but maybe such services should be part of a separate program?

Klinky 14y ago

The true costs of food are hidden in the heavy toll it takes on our environment, the poor or illegal labor situations used to harvest it, and the subsidies given out by the the government.

abstractbill 14y ago

One doesn't generally have a sudden and unexpected need for a very particular type of food that only relatively few specialists know how to produce.

snowwrestler 14y ago
But this is not where the vast majority of health care costs come from. They mostly come from the care of chronic ailments.
jpdoctor 14y ago
Exactly. As an example: One does not comparison shop for an ambulance service after a car accident, nor a surgeon after arriving at the hospital. And those charges for blood transfusions: Anyone up for a startup to find the lowest bidder?
ef4 14y ago
The relevant question is: what is keeping the supply of specialists from growing to meet the demand? The AMA is essentially a guild. Everything it does in the name of quality is also a highly-effective way to keep wages high for its members. And that's hardly a coincidence. Could an innovative medical school train a particular kind of specialist to be just as effective in half the time, at half the cost? We'll never know, because that kind of innovation is illegal. The balance between cost and quality is not black and white. Plenty of patients might very well prefer to trade off one for the other. Today they have no choice -- there is only one standard, and the providers have every incentive to make that standard as expensive as possible.

danielweber 14y ago

The very next sentence points out that the customer may be passed out and unable to form any opinion. Just reading your quote, though, (I read the comments before the article) I thought that the article was going to talk about how hard it is for even informed people to opt-out of expensive procedures. There was a news story just a week or two ago about a nurse refusing to perform CPR despite 911 demands, but the home the patient was in was set up to explicitly not perform CPR. Ezra Klein has linked before to "How Doctors Die". Here is the last HN talk about it https://news.ycombinator.com/item?id=5104430 https://news.ycombinator.com/item?id=5104430 (it has links to the prior talk on HN) Even doctors have to jump through incredible hoops to avoid ending up getting drastic procedures done on them, and even then there is no guarantee that the doctor in charge won't override your wishes and hook you up instead.