16 ms·

Of course healthcare is special, it's not a normal market because of extreme demand inelasticity. Food is special too, but it manages to function as a market b

by jbooth 13y ago

Of course healthcare is special, it's not a normal market because of extreme demand inelasticity. Food is special too, but it manages to function as a market because we have a food surplus, a plethora of replacement goods within the food category and it's much less specialized to produce. This doesn't mean that people don't deserve to earn a living. The doctor in the article managed to find a way to make the man's procedure happen without taking a loss on it. But it's an inaccurate simplification to consider healthcare a market like any other -- inaccurate simplifications hurt any system and that's why our current 'market' system has more bureaucratic red tape, higher prices and worse outcomes than actual socialist systems in the rest of the western economies.

AlisdairSH 13y ago
Emergency medicine is inelastic and not conducive to price shopping and other research. But, what percentage of medicine falls into that category? For example, I currently have a shoulder injury. I'm meeting with an ortho specialist next week. And it will likely require surgery to correct. So, while I "need" the surgery, there's no real hurry. I could take an extra week to meet with several providers and ask about pricing. Of course, I won't do that, because my medical plan is paying the vast majority of the cost. I'll just get nickle-and-dimed with co-pays for the next 6 months.
- neltnerb 13y ago
  As another example, I'm very likely going to be switching to a medication that costs $60,000/year for a variety of reasons. It's slightly elective (my mother has the same issue, but has been okay) but highly probabilistic (my situation could be much worse if I don't take it). There are alternative medications, but they involve injections weekly or daily (which I've been doing), don't cost much less, and produce side effects that make it very difficult to work. The kicker? The active ingredient is DMF, which I can buy in bulk for 1000x less. I've looked up the pricing, so I feel like I am applying some amount of analysis in determining that it's worth the cost. But it does feel like, even accounting for need to recover expenses of doing medical trials, this is a bit ridiculous.
- jbooth 13y ago
  Non-emergency medicine, also inelastic. There's no hurry on your shoulder surgery, but there's also no point at which you say "Geez, at that price I'd rather not", like it's iMax tickets for Iron Man 3. Maybe there's a point at which you literally can't make it happen and are forced to live with it but it is not a Normal Good with Econ 101 supply/demand curves. I guess that one could contend that our current f'd up situation is a random historical accident rather than a somewhat predictable outcome from treating an essential good as a market good. But you certainly can't claim it's a functioning market, for any definition of functioning or market.
Retric 13y ago
What separates heathcare from a food is you know how hungry you are you have no idea what blood tests should be done. And the person ordering blood tests has no incentive to hold back as they make more money the more they do and can be suied if there to passive.
sseveran 13y ago
The RAND study clearly showed that much of the demand for healthcare is elastic.

by jbooth 13y ago

AlisdairSH 13y ago

Emergency medicine is inelastic and not conducive to price shopping and other research. But, what percentage of medicine falls into that category? For example, I currently have a shoulder injury. I'm meeting with an ortho specialist next week. And it will likely require surgery to correct. So, while I "need" the surgery, there's no real hurry. I could take an extra week to meet with several providers and ask about pricing. Of course, I won't do that, because my medical plan is paying the vast majority of the cost. I'll just get nickle-and-dimed with co-pays for the next 6 months.

neltnerb 13y ago
As another example, I'm very likely going to be switching to a medication that costs $60,000/year for a variety of reasons. It's slightly elective (my mother has the same issue, but has been okay) but highly probabilistic (my situation could be much worse if I don't take it). There are alternative medications, but they involve injections weekly or daily (which I've been doing), don't cost much less, and produce side effects that make it very difficult to work. The kicker? The active ingredient is DMF, which I can buy in bulk for 1000x less. I've looked up the pricing, so I feel like I am applying some amount of analysis in determining that it's worth the cost. But it does feel like, even accounting for need to recover expenses of doing medical trials, this is a bit ridiculous.
jbooth 13y ago
Non-emergency medicine, also inelastic. There's no hurry on your shoulder surgery, but there's also no point at which you say "Geez, at that price I'd rather not", like it's iMax tickets for Iron Man 3. Maybe there's a point at which you literally can't make it happen and are forced to live with it but it is not a Normal Good with Econ 101 supply/demand curves. I guess that one could contend that our current f'd up situation is a random historical accident rather than a somewhat predictable outcome from treating an essential good as a market good. But you certainly can't claim it's a functioning market, for any definition of functioning or market.

Retric 13y ago

What separates heathcare from a food is you know how hungry you are you have no idea what blood tests should be done. And the person ordering blood tests has no incentive to hold back as they make more money the more they do and can be suied if there to passive.

sseveran 13y ago

The RAND study clearly showed that much of the demand for healthcare is elastic.