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What the commenter suggested is exactly the situation right now: the hospital sets the prices as astronomically high as possible because they can get away with

What the commenter suggested is exactly the situation right now: the hospital sets the prices as astronomically high as possible because they can get away with it, because the patients aren't paying it. Don't you think introducing patient choice into the equation would put some downward pressure on prices? And certainly if it puts any downward pressure on prices, it's a better situation than we have now.

Smudge 13y ago
If you're having a heart attack, are you really in a position to negotiate on price? At all? I get that there might be some downward pressure, but what prevents the hospital from just laying an absurd bill on you after the procedure?
- duskwuff 13y ago
  It's somewhat akin to emergency non-medical services - say, a tow truck, locksmith, or plumber. Many of these services cost quite a bit more than they should. Why? Because the people who need them are in no position to shop around.
- nsxwolf 13y ago
  The hope with a real free market is that you wouldn't have to negotiate in that situation, the prices would already be reasonable.
  - dragonwriter 13y ago
    > The hope with a real free market is that you wouldn't have to negotiate in that situation, the prices would already be reasonable. The theoretical efficiency of a real "real free market" depends on the ability to evaluate and choose options in a competitive market for purchasing goods and services based on perfect knowledge of the costs of and utility from each purchase. There's a whole lot of reasons that a deregulated market for "purchasing treatment for a heart attack you are currently experiencing" is not likely to have the features that theoretically create efficiency in a "real free market".
    - nsxwolf 13y ago
      Also, a heart attack is a rare event, and presumably one that would be covered by a real insurance policy.
dragonwriter 13y ago
> Don't you think introducing patient choice into the equation would put some downward pressure on prices? If you could magically make healthcare look like an Econ 101 market where rational choice theory and perfect competition both were even remotely reasonable models of what was going on, sure. But "patients don't pay directly for services" isn't even close to the only way that healthcare doesn't look like an Econ 101 market. Rational choice theory is a deeply and fundamentally flawed model to start with, but its a tolerable approximation of behavior in lots of important cases (mostly, classes of products which are frequently purchased and used and whose utilities are very clear upon use, allowing any misperceptions about expected utility to be resolved so that most purchase decisions are in fact made with reasonably strong information about costs and utilities.) Look, the rest of the developed world does as good or better (by most measures) healthcare than the US at vastly lower cost (whether measured per capita or per GDP), and they don't do it by making patient pay directly for services. The whole idea that we have to resort to abstract Econ 101 theory to determine how to control prices in healthcare ignores the fact that the rest of the developed world exists.

Smudge 13y ago

If you're having a heart attack, are you really in a position to negotiate on price? At all? I get that there might be some downward pressure, but what prevents the hospital from just laying an absurd bill on you after the procedure?

duskwuff 13y ago
It's somewhat akin to emergency non-medical services - say, a tow truck, locksmith, or plumber. Many of these services cost quite a bit more than they should. Why? Because the people who need them are in no position to shop around.
nsxwolf 13y ago
The hope with a real free market is that you wouldn't have to negotiate in that situation, the prices would already be reasonable.
- dragonwriter 13y ago
  > The hope with a real free market is that you wouldn't have to negotiate in that situation, the prices would already be reasonable. The theoretical efficiency of a real "real free market" depends on the ability to evaluate and choose options in a competitive market for purchasing goods and services based on perfect knowledge of the costs of and utility from each purchase. There's a whole lot of reasons that a deregulated market for "purchasing treatment for a heart attack you are currently experiencing" is not likely to have the features that theoretically create efficiency in a "real free market".
  - nsxwolf 13y ago
    Also, a heart attack is a rare event, and presumably one that would be covered by a real insurance policy.

dragonwriter 13y ago

> Don't you think introducing patient choice into the equation would put some downward pressure on prices? If you could magically make healthcare look like an Econ 101 market where rational choice theory and perfect competition both were even remotely reasonable models of what was going on, sure. But "patients don't pay directly for services" isn't even close to the only way that healthcare doesn't look like an Econ 101 market. Rational choice theory is a deeply and fundamentally flawed model to start with, but its a tolerable approximation of behavior in lots of important cases (mostly, classes of products which are frequently purchased and used and whose utilities are very clear upon use, allowing any misperceptions about expected utility to be resolved so that most purchase decisions are in fact made with reasonably strong information about costs and utilities.) Look, the rest of the developed world does as good or better (by most measures) healthcare than the US at vastly lower cost (whether measured per capita or per GDP), and they don't do it by making patient pay directly for services. The whole idea that we have to resort to abstract Econ 101 theory to determine how to control prices in healthcare ignores the fact that the rest of the developed world exists.