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How to Charge $546 for Six Liters of Saltwater

175 points by zdean 13y ago

kumarski 13y ago
I keep getting that feeling that something must be done. Any suggestions HN readers?
- csense 13y ago
  Turn healthcare into a government bureaucracy. Because that's an effective way to combat waste, inefficiency, and overcharging </sarcasm>
  - dnautics 13y ago
    at least all our patient data will be private. If we keep all of our private information in the hands of the HMOs and other corporations, the NSA might install a backdoor.
    - indefatigable 13y ago
      In other words, we should trust the DHHS and the IRS with information that the NSA can't be trusted to access? Am I reading that correctly?
    - ohWhatever 13y ago
      It's funny, because you seem to think that health care professionals, with their myriad Excel spreadsheets and mammoth stacks of Steelcase® file cabinets brimming with rainbow color-coordinated folders containing paper files seem to know the first thing about information security. These are non-technical people, who went to school mostly for biology and chemistry, or for the lowly clerks, and secretaries in your doctor's office, maybe two years of community college, with an associates degree in communications maybe. On average, take a random sample of the people who do the paper work for the lofty, priest-like physicians. Ask them what AES is, or what a SHA hash is, or even what SSL and TLS are. I guarantee you, that you'll get a blank stare. They know how to use the systems they're provided with, like they know how to open a bag of Oreo cookies. The doctors know how to pay IT professionals for services, like they know how to write a check, and know to procure electronic systems like they know how to make down payments on their Mercedes. You can be sure that they know how to shred all those e-mails that they print out and read over their morning coffee. It's only as private insofar as no one is supposed to look. This protects people under the law, in that, as a rule, certain information is not to be used as criteria for making certain business decisions. But this is merely a bureaucratic honor system, and it doesn't mean that people aren't aware of things they aren't supposed to know about. The information itself, frequently, isn't particularly "secure" according to more strenuous information security standards. Your credit card transactions are safer than your HIPAA information by a longshot, but mostly because there really isn't any sort of criminal profit motive behind obtaining and using that sort of information.
      - jes 13y ago
        You come down quite hard on healthcare professionals, with the comments about biology and chemistry being non-technical. Your comments about doctors also seem unrepresentative of what a modern doctor must actually know and accomplish in order to be a practicing physician.
  - tibbon 13y ago
    Clearly, its a problem a free market will efficiently fix and prices will stay low. </sarcasm>
    - chrismonsanto 13y ago
      At least price transparency worked for surgeries in a hospital in Oklahoma: https://news.ycombinator.com/item?id=6014794 https://news.ycombinator.com/item?id=6014794 Perhaps a similar approach could work for IVs.
    - dnautics 13y ago
      the best solution is obviously some kind of public-private partnership, so that we can get the best parts of the public sector with the best parts of the private sector. There's no way we'll wind up with the worst parts of both.
  - mapt 13y ago
    Turns out, it is. Even if one is willing to accept them into one's general worldview... First principles - like "government is wasteful" - only go so far in the face of conflicting data. And there is a lot of it on the topic of healthcare systems.
  - chasing 13y ago
    Whelp, the private sector sure seems to be fuckin' it up, so maybe it's time we give the government a shot.
    - acheron 13y ago
      Which private sector is that? Because our current healthcare system is nowhere near "private".
      - mpyne 13y ago
        Well it's also nowhere near "public". For the most part we're talking about private hospitals and private insurance companies, the combination of which have failed to bring U.S. healthcare costs in line with the rest of the world. Don't simply blame "regulation" either. Many industries are regulated, some heavily so, and still manage to produce companies that are profitable and efficiently deliver good products. I don't think we'll see a real solution to the healthcare system in America until we stop treating it like it's just like any other industry.
  - derleth 13y ago
    Only fools and ideologues argue against systems which have been demonstrated to work.
  - noonespecial 13y ago
    The government is wasteful and inefficient, but it is not the most wasteful and inefficient system possible. Politics is the art of figuring out when to burn the extra resources on the government method because all of the other available methods are even worse.
- chrismealy 13y ago
  Copy the health care system of any other rich country. They all get about the same results for half the price or less.
  - dnautics 13y ago
    We could kill about 9/10 of the population and get down to their size and ethnic homogeneity, as part of the copying process.
    - w1ntermute 13y ago
      I'm not sure why the overall size of the population is relevant here. If it works for countries with populations of 5 million (Norway), 63 million (UK), 82 million (Germany), and 126 million (Japan), I think it's completely reasonable to at least try it in a country of 319 million.
      - dnautics 13y ago
        Ethnic homogeneity is also an issue. If you think that an arab living in france gets the same quality of healthcare as a european french person at the same poverty level, you're kidding yourself. Not that the US doesn't have these problems. Ultimately, different ethnicities get different diseases, too, so the bureaucrats in charge of deciding what gets covered and to what extent are basically institutionalizing racial privilege. However, naive grass-is-greenerism is more of what I was railing against.
        brohee 13y ago
        As someone that spent quite a bit of time in French hospitals visiting relatives recently, I have no reason whatsoever to think access to care is limited in anyway whether on ethnic or socioeconomic background... Do you care to cite some sources?
        ucha 13y ago
        That is absolutely false. All French citizens and even foreigners enrolled in the "securite sociale" scheme have access to the same facilities, procedures and doctors. There is no discrimination in the public service. Any claims to the contrary are at best unfamiliarity with the subject if not deliberate misinformation.
- uptown 13y ago
  I'm nowhere near having an answer, but pricing transparency needs to be a major part of the solution. I realize OPEC isn't exactly a popular entity, but I wonder whether a similar model might have some benefits here. Form a group comprised of representatives from interested parties tasked with establishing pricing for services rendered that is consistent across the entire nation. Perhaps allow regional adjustments based on cost-of-living deviations, or some other relevant metric - but cap how much those deviations can actually influence the price of care. End the idiotic "billed rate" vs. the "negotiated rate" nonsense. Include patient transportation in the equation. If singular pricing isn't attainable, a local hospital's care is too expensive, and the patient can receive similar care at an alternate location in a cost-effective way - cover the transportation cost under their insurance. Tort reform. Liability insurance premiums for health care professionals is as crazy as the price for the care they provide. This is as big a problem as the price of a bag of saline. I know these aren't the answers - but pricing of services is key to the problem, and the Affordable Care Act did little to get that under control beyond attempting to move more individuals under the umbrella of insurance and outside of emergency care.
- lifeformed 13y ago
  What would happen if a hospital opened up that just had reasonable rates? It wouldn't make any deals with insurance companies other than to take payments. It posts all it's prices online and transparently for everyone to see. You can shop for treatments on their website. Could they make money this way?
  - fnordfnordfnord 13y ago
    Apparently, a bidding war. Fancy that. http://kfor.com/2013/07/08/okc-hospital-posting-surgery-prices-online/ http://kfor.com/2013/07/08/okc-hospital-posting-surgery-pric...
- angersock 13y ago
  Start making the negative externalities of this pricing known to the bureaucrats in those hospital systems. Preferably with a lead pipe.
DanielBMarkham 13y ago
It's always in the seller's interest to create a complex and opaque system of pricing, especially when the buyer doesn't even pay for the services. This is why free markets aren't the answer to everything. It's free and open markets that drive efficiency out of any process. The problem here is one of incentives. If I promise to pay you for mowing your neighbor's lawn, and he rarely reviews what you're doing and I rarely check with him, suddenly mowing the lawn gets really complicated and expensive. If, on the other hand, you walk next door and solicit the neighbor to mow his lawn, suddenly it's a very simple transaction. The difference is one of incentives. If the goal is to provide mowed lawns, the neighbor is the guy responsible. If the goal is to provide a rationale for writing a check? Heck, I got all kinds of easy rationales handy. I can play this game all day. It should be illegal for anybody to pay a medical bill except for the person receiving treatment. If you want universal coverage, that's fine: pay the patient and have the patient pay the hospital and doctor. Once you begin to incentivize other players besides the patient, you're going to create a mess. I'd also recommend completely unbundling hospital services. Patients should be able to buy materials and services on the open market -- and keep the savings they make doing so. Hospitals should provide clean, sterile rooms for independent specialists to work, not form a pricing cabal controlling anything that happens inside the walls and incentivized to game the system.
- dopamean 13y ago
  > This is why free markets aren't the answer to everything. Perhaps I've misunderstood you here but in my opinion the way healthcare works is sort of the opposite of a free market and if a free marketplace for health services were allowed to exist then things like $500 bags of saline solution wouldn't exist.
  - thrownaway2424 13y ago
    It is not possible to have a "free market" in health care because the "customers" are often on the brink of death, or not even conscious.
    - tapp 13y ago
refurb 13y ago
One of the big reasons for this problem is Medicare. The reimbursement that Medicare offers is often far less than it costs the hospital. Why does Medicare not cover the cost of a procedure? Usually because it did cover it in the past (to the point of generosity) and providers reacted by shifting their services to maximize the profits. A good example is the infusion of drugs. Medicare pays ASP+4% (just cut from +6% due to sequestration). If you're a clinic that doesn't get a discount on their drugs (mostly community based clinics) you're often paying more for the drug than the gov't pays you (it's a net loss every time you prescribe the drug). However, the gov't does pay a lot to infuse the drug. The result? Providers everywhere were starting their own infusion clinics and making a ton of money on it. The profit from infusion clinics would be used to offset the loss from the purchase of the drug. CMS clamped down on reimbursement for infusion services recently, but it's still a profit center. This happens all the time in the US healthcare system. So what do hospitals do? They jack up the price on every item they possibly can. Of course insurance companies know what is up, so they negotiate much better rates for all of the items. However, for those who are uninsured, they pay the charge master rate which is very inflated. The problem with the US healthcare system is not that's a free market, because it isn't. The problem is that's not a free market and it's not a fully regulated market, it's something in between. So what happens is that some regulations are put in place, some of which cause certain procedures to be unprofitable, so providers simply shift those costs to the un-(or less) regulated prices.
- smokinn 13y ago
  Sounds like the problem isn't actually medicare, sounds more like it's adding a capitalistic, profit-maximizing middleman into the system.
  - jes 13y ago
    With respect, what does capitalism mean to you? Lassiez-Faire or something different?
    - AsymetricCom 13y ago
      I'm sure competition fits in there somewhere.
yalogin 13y ago
So this is by design isn't it? The fact that insurance covers everything and the hospitals do not have to eat up any costs begs for this to happen. If the majority of customers (patients) pay out of their pocket then the hospitals would be incetivized to make themselves attractive to patients. Else why the hell do they care? In fact they mark up prices multiple times to offset any unforeseen costs of eating up costs as well. There is no incentive in price transparency, no incentive to compete among hospitals. Honestly if you are covered then as an individual you don't care either. I am not sure what the solution is here.
- carbocation 13y ago
  Serious question: why do you think that hospitals don't have to eat costs? It's a loaded question in the sense that I've been at various hospitals and they always talk about their budget shortfall which is in part due to non-reimbursed care provided to those who cannot pay and/or have no insurance. But it's also not a loaded question in the sense that I want to understand why people would think hospitals don't eat costs.
  - yalogin 13y ago
    Oops, I was thinking something and typed something else entirely. I meant to say that since the insured pay for the uninsured (through marked up prices), the hospitals are incentivized to jack up prices.
dude3 13y ago
I think there are 2 big factors that always seem to be missing from these investigations. The high costs offsets individuals who don't pay for their healthcare. Keep in mind that the hospital must treat anybody who walks in the door and they frequently do not get reimbursed by the government. Also keep in mind that the solution must be perfect when it physically cannot be. Because if there is a .0001 percent chance of failure, every doctor that treated the patient gets sued, the hospital gets sued for several million, the manufacturers gets sued, the middle man gets sued, heck the receptionists probably gets sued too. Think of the costs of insurance for every party involved. Obstetricians often pay $85,000 to as much as $200,000 for malpractice insurance. That's just the doctor. Reduce the malpractice payouts and shield doctors like other countries do. Make the government absorb more of the costs for care. The price could probably be cut by 200 to 300 bucks.
- thrownaway2424 13y ago
  (U.S.) states where malpractice damages are limited do not have lower health care costs.
  - deleted 13y ago
    [deleted]
- swalkergibson 13y ago
  > Obstetricians often pay $85,000 to as much as $200,000 for malpractice insurance. [Citation needed]
elstevo 13y ago
Not to defend the costs or the state of the system, but the justification for the prices of medications in hospitals usually includes the time of the nurses, pharmacists, and techs that make the whole administration process happen safely. Also, hospitals will bill whatever amount they can get reimbursed. Most insurance companies have contracts with hospitals where they only get a fraction of the billed amount. The rest is written off by the hospital. Uninsured patients can usually work out payment plans for lower amounts as well. That said, healthcare in the US is still pretty damn expensive.
coenhyde 13y ago
The problem with having healthcare under private enterprise is that these healthcare providers do not operate under the free market conditions we assume they do. There is no "perfect information" allowing consumers to choose the cheapest price. As the article points out the pricing structure is very opaque. Not to mention the "consumers" want the best product regardless of cost, after all we are talking about their lives here. Given the lack of free market conditions operating on these healthcare providers it is only logical that they would behave like the extortion rackets they are.
- ekianjo 13y ago
  They dont operate in a free market. Everything is closely regulated and the patient cannot compare costs. Companies which would like to provide lower costs services would not be allowed to advertise them.
- rogerbinns 13y ago
  It is even worse than that. Lets say you want to open a medical facility that will lower costs. This will end up taking away business from other facilities where patients don't find the higher costs to provide value. In a free market, the new facility goes up, existing facilities have to compete, and consumers benefit. In 35 states you can't do that. Existing facilities are protected, and you'll need to establish a certificate of need[1] showing that business won't be taken away from existing facilities. The somewhat tortured logic is that they would then have to charge remaining patients more which would raise costs for everyone so this is a cost saving measure. Like many parts of US business it is good old fashioned protectionism, and not free markets. [1] http://en.wikipedia.org/wiki/Certificate_of_need http://en.wikipedia.org/wiki/Certificate_of_need
- moocowduckquack 13y ago
  There is never perfect information in any market. The continual problem with free market economics is that according to the definition, there has never been a free market anywhere in history. It is ideology with a thin veneer of mathematics.
microcolonel 13y ago
They don't clarify though, the costs of running a sufficiently-advanced multiple-effect distiller, dealing with the FDA, WHO and whomever else forces them to... these costs could definitely add up, no? What do you think the bar is for entering the market of providing water for injection? Who's there to make it costlier, maybe the insurance oligopoly can hold some of the blame for this as well...
- zdean 13y ago
  Apparently the bar isn't too high: http://www.zorotools.com/g/00107210/k-G4226537?utm_source=google_shopping&utm_medium=cpc&utm_campaign=Google_Shopping_Feed&kw={keyword}&gclid=COXYmb3vmbkCFVNo7AodNCYA5g http://www.zorotools.com/g/00107210/k-G4226537?utm_source=go...
- icegreentea 13y ago
  They list the manufacturer sale price right there ($1.07 a liter). The manufacturer is the one who has to go through the certifications, capital costs, and part of the overhead. All the remaining cost (the remaining 89 dollars) is overhead from the hospital, middle distributors (if they exist) and the such. The the majority of the cost of capital, dealing with regulation, and other "justified" increases is absorbed into the manufacturer sale price.
- fnordfnordfnord 13y ago
  It couldn't add up to more than the cost of a bottle of cheap vodka.
nikatwork 13y ago
Many in this thread are claiming that price fixing wouldn't occur in a "truly free" market. This is misty-eyed naivety. In a completely deregulated free market, it is even more in the hospitals' interest to form a price-fixing cartel. Any new player in the market trying to set reasonable market prices could be excluded through market pressure tactics (eg, tell distributors don't sell to them or our cartel will no longer use you). It seems to me that the parlous state of the US healthcare system is in fact a perfect demonstration of the dangers of a completely free market, and claims that "oh no it's not actually free enough" are merely handwaving.
- mattstocum 13y ago
  Even if there were perfect competition, it doesn't matter much, people don't comparison shop for ERs. If you are having a heart attack, you're not in a position to compare prices at local hospitals.
  - zdean 13y ago
    Well, I think it would have to start somewhere. I'd be happy to be able to comparison shop for routine, non-emergency stuff...let's say dentists to start off with. I have a feeling that once you start chipping away at it, the outlying examples would get taken care of as well. There was a similar thread a few weeks back: https://news.ycombinator.com/item?id=6258597 https://news.ycombinator.com/item?id=6258597 It'd be great if the HN community started throwing out some ideas for disrupting this behemoth.
    - iyulaev 13y ago
      I think people already cross-shop dentists. When I had a root canal done I inquired at two places. And I'm not even very sensitive to it since I have dental insurance. Good luck with the same at hospitals though...
      - aestra 13y ago
        I would be nervous to do that. I trust my dentist, I know he does a good job, and is sensitive to my comfort, that's why I go there. I've been to a few terrible dentists before, and I've had to get dental work redone because it didn't last. Dentists seem to be so hit and miss. Doctors can be the same way, price isn't the only consideration.
socialized 13y ago
After spending six months in the hospital for orthopedic care for my news it became very apparent that unless you had a negotiated rate with your HMO or were on Medicare, pricing was the wild west. If you could discern what the bills were for via the medical codes, you would become outraged by the overhead. The best part is that hospitals get to hide behind HIPAA as they gouge and steal.
newsmaster 13y ago
What's the price of water in the desert? Somebody clearly realized this and appplied it to US healthcare system. Way to go capitalism.
hop 13y ago
What a baffling industry. Wish great things to any startup that tries to get through the bureaucratic/legal/insurance hurdles to take a crack at some of this.
- joseph_cooney 13y ago
  With centuries of regulatory capture, powerful, politically-connected vested interests with huge war-chests, and a deck full of trump-cards like 'safety' they can play, they might need more than just good wishes.
ucha 13y ago
Health expenditure per country (as a fraction of their GDP). The US spends 50% more than France while in France, health care is free and universal. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2225rank.html https://www.cia.gov/library/publications/the-world-factbook/...
jostmey 13y ago
And herein lies the true problem of medicine in America. We have the worst possible healthcare system. It is a privately run industry without any real competition. Almost anything would be better - either public healthcare or real competition. Instead, what we practice in America is an exercise in insanity played out on sick and injured.
- sourc3 13y ago
  I agree. When it comes to your or your family's health you will not go with "cheap" even if it is the same level or better service/outcome. This is why the entire system needs to first create a nice feedback loop. Right now there are no metrics on how well certain hospitals are doing that can drive patient selection. Usually, the patient just ends up going to the specialist their primary care provider referred them to or the closest one home. Until the quality/outcome data is made public there is no hope in steering people to better hospitals/providers. There are some attempts lately in freeing up this information but I guess only time will tell how effective they will become. On the bright side, it will only take one good health insurance company (I am thinking more like the type of disruption that a "Virgin" like company may bring to the table) to start using this data and driving some meaningful change.
angersock 13y ago
There was a really, really good (depressing) article I'd read about a year or two ago talking about how group purchasing organizations worked to influence the costs of devices. The example case was a guy who'd developed an auto-retracting needle, and was screwed out of business by some major manufacturers pressuring hospitals not to buy it. Does anyone have a link to that article?
- t0dd 13y ago
  Is this the article you refer to? "How the medical supply industry blocks device startups from selling to hospitals" http://www.washingtonmonthly.com/features/2010/1007.blake.html http://www.washingtonmonthly.com/features/2010/1007.blake.ht...
  - angersock 13y ago
    Yep! Good find!
karlkatzke 13y ago
OT: It's truly a sad day when I have to check to make sure that I'm reading something in a news section and not the op/ed section of the grey lady.
dr_ 13y ago
Free market decisions will work when the patient has a choice. For example, when going for an outpatient visit to a doctors office that is scheduled in advance. One could argue that the patient has time to review their choices, call different providers and come to a decision. This is not the case when the patient is being urgently hospitalized. They are typically rushed to the closest medical center and are subject to the prices it charges and it's providers charge. Given that they have no choice, whatever system it is that leads to these high prices is unlikely to change - if you are forced to buy something from me, why wouldn't i charge you as much as i feel like for it? The government could get involved and force hospitals to adhere to a certain fee schedule - but why should for profit institutions have to adhere to this? In a truly capitalistic society they really shouldn't. The best ways to deal with this is to maximize insurance coverage, which is one goal of the affordable care act, and then to really use it as insurance and not to pay for every possible medical service a patient may require. Insurance companies will negotiate reasonable rates for hospitalizations. And if it's really being used as insurance and not to cover regular outpatient services, premiums would remain low as well. So would there still be stories of the $4 Tylenol tablet dispensed in the hospital? Probably - but in the grand scheme of things, it wouldn't matter as much.
Questioneer 13y ago
Near the end of my father's life, he needed medical equipment at home. The equipment was provided by a company that has deals worked out with all the local hospitals. The price for one oxygen condenser is covered after a victim(patient) pays for the device for around half a year. Looking over some others I know, they are all going through this same company. Referred to them by each of their hospitals. I cannot fully explain the scheme worked out from the hospitals, but I know it depends on having the often confused patient signing a bundle of documentation while he is being led out the door. I read over the documents and it seemed fair, I just had no time to research all that was needed. My father was in full legal control and he himself just simply followed through with what the hospital asked. Fuck you, Airway Oxygen.
idiot900 13y ago
So if the manufacturer charges a dollar for the bag of saline, and the hospital marks it up a couple orders a magnitude, hospitals must be absolutely swimming in cash, right? Did I miss that part in the article?
prawn 13y ago
1. Does the industry need a few Mannings and Snowdens? 2. How much progress in the world is stifled by powerful incumbents blocking competition? Taxi lobbyists tackling Uber, car industry impeding mass transit in LA decades ago, etc?
- jonknee 13y ago
  The industry already got one actually, I coincidentally came across this yesterday: http://www.bloomberg.com/news/2013-08-13/florida-pharmacists-win-597-million-blowing-whistle-on-scheme.html http://www.bloomberg.com/news/2013-08-13/florida-pharmacists... The TLDR is that an independent pharmacist treating AIDS patients got run out of business by price fixing competitors. He got the last laugh and sued on the behalf of the government and has so far collected $597M in awards (the government has collected over $3 billion). The behavior of these (very large) firms was outrageous: > For example, Abbott Laboratories (ABT) sold its antibiotic Vancomycin 1 GM FTV to customers for $4 a dose, according to a joint Justice Department and Ven-A-Care lawsuit. Abbott reported the cost to pricing publishers as $72.48 -- 18 times the actual amount, the lawsuit says. This is likely going on for other types of drugs and then also in every other segment (medical devices/supplies being a biggy).
ck2 13y ago
Basically it comes down to we'd rather let people die instead of telling hospitals they cannot do 10000% markup. Even limiting them to 1000% markup would be "wrong". Yay 'murica. Be sure to donate blood while you are waiting for your loved ones in the hospital so they can sell it for 10000% markup too.
- rokhayakebe 13y ago
  Population control, maybe?
bpm140 13y ago
I have two active kids and am reasonably active myself. We have probably received medical treatment a dozen times in the last year, a combination of walk-in clinics, personal physicians and emergency room visits, depending on the circumstances. During these visits, the staff have used equipment, given procedures and prescribed medication and have rarely, if ever, inquired about my thoughts on treatment. When my son jumped off the couch and cut the inside of his mouth open, I wasn't asked my opinion on treatment. And if I had been asked, I would have simply said "you're the physician, do what will make him better the fastest." The same would have gone for when I had pneumonia or had to get a tetanus shot after getting fishhooked while surfing. My goal is simple -- recover the best the fastest. How does one legitimately comparison shop for a baby delivery? Imagine, for instance, Hospital A says their births average $20,000 and Hospital B says their births average $30,000. Which rational prospective parent chooses the $20,000 option? Hospital care is not like buying a car, where most people can consider themselves educated enough to make a decision based on competing factors -- perhaps I'm willing to give up some handling for a lower price or I'm willing to sacrifice fuel economy for more power. The average person knows nada about the medical practicalities of giving birth (or treating pneumonia, or even stitching gums) so they cannot make informed decisions about what are reasonable tradeoffs. As other people have said, medical treatment is an inelastic need. Parents don't say "you know, I'm cool with 50% less effective treatment for my child at 50% of the cost" and people don't say "you know, 90% functionality of my leg will be just fine if you can bring this in at a discount." So not only do you have a lack of informed customers, you have a lack of choice in outcomes. A free market solution for medicine is a fairy tale spun by people of certain social and political persuasions.
- gbhn 13y ago
  The article focuses on what can hardly be considered a complicated good: salt water. Medical grade saline is highly regulated, and must be one of the most commodity products that exist in the country today. (The article takes pains to establish this.) It takes minimal effort to understand what it is or to compare prices. And yet, as the article says, there is no functioning market for it. For something like "set this broken bone" sure, it's difficult to talk about the price for this risk vs. that risk. But for the liters of saline used during the procedure? That ought to be trivial to analyze. Yet it is not.
ddeck 13y ago
I am of the firm belief that healthcare is one of the basic goods that should be provided by a government. Some may cry socialism and argue that free markets are more "efficient", but that assumes people shouldn't have equal right to basic healthcare services. It also ignores the fact that many of the generally accepted principals required for a functioning free market are difficult to achieve in healthcare. In an emergency situation, for example, buyers are likely constrained to the closest hospital, at which point that hospital become a monopoly for that particular buyer. When the the good on offer is survival, it's easy to see where problems might arise. I live in a country that has been rated the freest economy on earth every year since 1995 [1]. Low taxes, small government, minimal regulation. So what does healthcare look like here for the average person? $13/day. Got a sore finger? $13/day. Intensive care? $13/day. There is a significant parallel private system that offers all the luxuries and perks that a free market can provide (no waiting times, private rooms, choice of doctor etc.). But it competes with the public hospitals for buyers. In providing a competing alternative, I would speculate that the public system limits the type of monopolistic situations that can arise. No system is perfect and clearly there are enormous differences between the US and elsewhere, but it's interesting to note that the "freest economy on earth" has universal public healthcare, in addition to a freely competing private system. [1] http://en.wikipedia.org/wiki/Index_of_Economic_Freedom http://en.wikipedia.org/wiki/Index_of_Economic_Freedom [2] http://en.wikipedia.org/wiki/Health_in_Hong_Kong http://en.wikipedia.org/wiki/Health_in_Hong_Kong [3] http://www.news.gov.hk/en/record/html/2013/04/20130409_190409.shtml http://www.news.gov.hk/en/record/html/2013/04/20130409_19040...
_pmf_ 13y ago
And what about these web sites for thousands of dollars? I mean, if I can throw something together in 30 minutes using MS Paint and Wordpad, how ridiculous is it that a designer charges more than 20 USD per hour? Ah, I see. It's only en vogue to complain if I don't know anything at all about the constraints of the domain and am pulling stuff out of my ass. My bad.
deleted 13y ago
[deleted]

175 points by zdean 13y ago

kumarski 13y ago

I keep getting that feeling that something must be done. Any suggestions HN readers?

csense 13y ago
Turn healthcare into a government bureaucracy. Because that's an effective way to combat waste, inefficiency, and overcharging </sarcasm>
- dnautics 13y ago
  at least all our patient data will be private. If we keep all of our private information in the hands of the HMOs and other corporations, the NSA might install a backdoor.
  - indefatigable 13y ago
    In other words, we should trust the DHHS and the IRS with information that the NSA can't be trusted to access? Am I reading that correctly?
  - ohWhatever 13y ago
    It's funny, because you seem to think that health care professionals, with their myriad Excel spreadsheets and mammoth stacks of Steelcase® file cabinets brimming with rainbow color-coordinated folders containing paper files seem to know the first thing about information security. These are non-technical people, who went to school mostly for biology and chemistry, or for the lowly clerks, and secretaries in your doctor's office, maybe two years of community college, with an associates degree in communications maybe. On average, take a random sample of the people who do the paper work for the lofty, priest-like physicians. Ask them what AES is, or what a SHA hash is, or even what SSL and TLS are. I guarantee you, that you'll get a blank stare. They know how to use the systems they're provided with, like they know how to open a bag of Oreo cookies. The doctors know how to pay IT professionals for services, like they know how to write a check, and know to procure electronic systems like they know how to make down payments on their Mercedes. You can be sure that they know how to shred all those e-mails that they print out and read over their morning coffee. It's only as private insofar as no one is supposed to look. This protects people under the law, in that, as a rule, certain information is not to be used as criteria for making certain business decisions. But this is merely a bureaucratic honor system, and it doesn't mean that people aren't aware of things they aren't supposed to know about. The information itself, frequently, isn't particularly "secure" according to more strenuous information security standards. Your credit card transactions are safer than your HIPAA information by a longshot, but mostly because there really isn't any sort of criminal profit motive behind obtaining and using that sort of information.
    - jes 13y ago
      You come down quite hard on healthcare professionals, with the comments about biology and chemistry being non-technical. Your comments about doctors also seem unrepresentative of what a modern doctor must actually know and accomplish in order to be a practicing physician.
- tibbon 13y ago
  Clearly, its a problem a free market will efficiently fix and prices will stay low. </sarcasm>
  - chrismonsanto 13y ago
    At least price transparency worked for surgeries in a hospital in Oklahoma: https://news.ycombinator.com/item?id=6014794 https://news.ycombinator.com/item?id=6014794 Perhaps a similar approach could work for IVs.
  - dnautics 13y ago
    the best solution is obviously some kind of public-private partnership, so that we can get the best parts of the public sector with the best parts of the private sector. There's no way we'll wind up with the worst parts of both.
- mapt 13y ago
  Turns out, it is. Even if one is willing to accept them into one's general worldview... First principles - like "government is wasteful" - only go so far in the face of conflicting data. And there is a lot of it on the topic of healthcare systems.
- chasing 13y ago
  Whelp, the private sector sure seems to be fuckin' it up, so maybe it's time we give the government a shot.
  - acheron 13y ago
    Which private sector is that? Because our current healthcare system is nowhere near "private".
    - mpyne 13y ago
      Well it's also nowhere near "public". For the most part we're talking about private hospitals and private insurance companies, the combination of which have failed to bring U.S. healthcare costs in line with the rest of the world. Don't simply blame "regulation" either. Many industries are regulated, some heavily so, and still manage to produce companies that are profitable and efficiently deliver good products. I don't think we'll see a real solution to the healthcare system in America until we stop treating it like it's just like any other industry.
- derleth 13y ago
  Only fools and ideologues argue against systems which have been demonstrated to work.
- noonespecial 13y ago
  The government is wasteful and inefficient, but it is not the most wasteful and inefficient system possible. Politics is the art of figuring out when to burn the extra resources on the government method because all of the other available methods are even worse.
chrismealy 13y ago
Copy the health care system of any other rich country. They all get about the same results for half the price or less.
- dnautics 13y ago
  We could kill about 9/10 of the population and get down to their size and ethnic homogeneity, as part of the copying process.
  - w1ntermute 13y ago
    I'm not sure why the overall size of the population is relevant here. If it works for countries with populations of 5 million (Norway), 63 million (UK), 82 million (Germany), and 126 million (Japan), I think it's completely reasonable to at least try it in a country of 319 million.
    - dnautics 13y ago
      Ethnic homogeneity is also an issue. If you think that an arab living in france gets the same quality of healthcare as a european french person at the same poverty level, you're kidding yourself. Not that the US doesn't have these problems. Ultimately, different ethnicities get different diseases, too, so the bureaucrats in charge of deciding what gets covered and to what extent are basically institutionalizing racial privilege. However, naive grass-is-greenerism is more of what I was railing against.
      - brohee 13y ago
        As someone that spent quite a bit of time in French hospitals visiting relatives recently, I have no reason whatsoever to think access to care is limited in anyway whether on ethnic or socioeconomic background... Do you care to cite some sources?
      - ucha 13y ago
        That is absolutely false. All French citizens and even foreigners enrolled in the "securite sociale" scheme have access to the same facilities, procedures and doctors. There is no discrimination in the public service. Any claims to the contrary are at best unfamiliarity with the subject if not deliberate misinformation.
uptown 13y ago
I'm nowhere near having an answer, but pricing transparency needs to be a major part of the solution. I realize OPEC isn't exactly a popular entity, but I wonder whether a similar model might have some benefits here. Form a group comprised of representatives from interested parties tasked with establishing pricing for services rendered that is consistent across the entire nation. Perhaps allow regional adjustments based on cost-of-living deviations, or some other relevant metric - but cap how much those deviations can actually influence the price of care. End the idiotic "billed rate" vs. the "negotiated rate" nonsense. Include patient transportation in the equation. If singular pricing isn't attainable, a local hospital's care is too expensive, and the patient can receive similar care at an alternate location in a cost-effective way - cover the transportation cost under their insurance. Tort reform. Liability insurance premiums for health care professionals is as crazy as the price for the care they provide. This is as big a problem as the price of a bag of saline. I know these aren't the answers - but pricing of services is key to the problem, and the Affordable Care Act did little to get that under control beyond attempting to move more individuals under the umbrella of insurance and outside of emergency care.
lifeformed 13y ago
What would happen if a hospital opened up that just had reasonable rates? It wouldn't make any deals with insurance companies other than to take payments. It posts all it's prices online and transparently for everyone to see. You can shop for treatments on their website. Could they make money this way?
- fnordfnordfnord 13y ago
  Apparently, a bidding war. Fancy that. http://kfor.com/2013/07/08/okc-hospital-posting-surgery-prices-online/ http://kfor.com/2013/07/08/okc-hospital-posting-surgery-pric...
angersock 13y ago
Start making the negative externalities of this pricing known to the bureaucrats in those hospital systems. Preferably with a lead pipe.

DanielBMarkham 13y ago

It's always in the seller's interest to create a complex and opaque system of pricing, especially when the buyer doesn't even pay for the services. This is why free markets aren't the answer to everything. It's free and open markets that drive efficiency out of any process. The problem here is one of incentives. If I promise to pay you for mowing your neighbor's lawn, and he rarely reviews what you're doing and I rarely check with him, suddenly mowing the lawn gets really complicated and expensive. If, on the other hand, you walk next door and solicit the neighbor to mow his lawn, suddenly it's a very simple transaction. The difference is one of incentives. If the goal is to provide mowed lawns, the neighbor is the guy responsible. If the goal is to provide a rationale for writing a check? Heck, I got all kinds of easy rationales handy. I can play this game all day. It should be illegal for anybody to pay a medical bill except for the person receiving treatment. If you want universal coverage, that's fine: pay the patient and have the patient pay the hospital and doctor. Once you begin to incentivize other players besides the patient, you're going to create a mess. I'd also recommend completely unbundling hospital services. Patients should be able to buy materials and services on the open market -- and keep the savings they make doing so. Hospitals should provide clean, sterile rooms for independent specialists to work, not form a pricing cabal controlling anything that happens inside the walls and incentivized to game the system.

dopamean 13y ago
> This is why free markets aren't the answer to everything. Perhaps I've misunderstood you here but in my opinion the way healthcare works is sort of the opposite of a free market and if a free marketplace for health services were allowed to exist then things like $500 bags of saline solution wouldn't exist.
- thrownaway2424 13y ago
  It is not possible to have a "free market" in health care because the "customers" are often on the brink of death, or not even conscious.
  - tapp 13y ago

refurb 13y ago

One of the big reasons for this problem is Medicare. The reimbursement that Medicare offers is often far less than it costs the hospital. Why does Medicare not cover the cost of a procedure? Usually because it did cover it in the past (to the point of generosity) and providers reacted by shifting their services to maximize the profits. A good example is the infusion of drugs. Medicare pays ASP+4% (just cut from +6% due to sequestration). If you're a clinic that doesn't get a discount on their drugs (mostly community based clinics) you're often paying more for the drug than the gov't pays you (it's a net loss every time you prescribe the drug). However, the gov't does pay a lot to infuse the drug. The result? Providers everywhere were starting their own infusion clinics and making a ton of money on it. The profit from infusion clinics would be used to offset the loss from the purchase of the drug. CMS clamped down on reimbursement for infusion services recently, but it's still a profit center. This happens all the time in the US healthcare system. So what do hospitals do? They jack up the price on every item they possibly can. Of course insurance companies know what is up, so they negotiate much better rates for all of the items. However, for those who are uninsured, they pay the charge master rate which is very inflated. The problem with the US healthcare system is not that's a free market, because it isn't. The problem is that's not a free market and it's not a fully regulated market, it's something in between. So what happens is that some regulations are put in place, some of which cause certain procedures to be unprofitable, so providers simply shift those costs to the un-(or less) regulated prices.

smokinn 13y ago
Sounds like the problem isn't actually medicare, sounds more like it's adding a capitalistic, profit-maximizing middleman into the system.
- jes 13y ago
  With respect, what does capitalism mean to you? Lassiez-Faire or something different?
  - AsymetricCom 13y ago
    I'm sure competition fits in there somewhere.

yalogin 13y ago

So this is by design isn't it? The fact that insurance covers everything and the hospitals do not have to eat up any costs begs for this to happen. If the majority of customers (patients) pay out of their pocket then the hospitals would be incetivized to make themselves attractive to patients. Else why the hell do they care? In fact they mark up prices multiple times to offset any unforeseen costs of eating up costs as well. There is no incentive in price transparency, no incentive to compete among hospitals. Honestly if you are covered then as an individual you don't care either. I am not sure what the solution is here.

carbocation 13y ago
Serious question: why do you think that hospitals don't have to eat costs? It's a loaded question in the sense that I've been at various hospitals and they always talk about their budget shortfall which is in part due to non-reimbursed care provided to those who cannot pay and/or have no insurance. But it's also not a loaded question in the sense that I want to understand why people would think hospitals don't eat costs.
- yalogin 13y ago
  Oops, I was thinking something and typed something else entirely. I meant to say that since the insured pay for the uninsured (through marked up prices), the hospitals are incentivized to jack up prices.

dude3 13y ago

I think there are 2 big factors that always seem to be missing from these investigations. The high costs offsets individuals who don't pay for their healthcare. Keep in mind that the hospital must treat anybody who walks in the door and they frequently do not get reimbursed by the government. Also keep in mind that the solution must be perfect when it physically cannot be. Because if there is a .0001 percent chance of failure, every doctor that treated the patient gets sued, the hospital gets sued for several million, the manufacturers gets sued, the middle man gets sued, heck the receptionists probably gets sued too. Think of the costs of insurance for every party involved. Obstetricians often pay $85,000 to as much as $200,000 for malpractice insurance. That's just the doctor. Reduce the malpractice payouts and shield doctors like other countries do. Make the government absorb more of the costs for care. The price could probably be cut by 200 to 300 bucks.

thrownaway2424 13y ago
(U.S.) states where malpractice damages are limited do not have lower health care costs.
- deleted 13y ago
  [deleted]
swalkergibson 13y ago
> Obstetricians often pay $85,000 to as much as $200,000 for malpractice insurance. [Citation needed]

elstevo 13y ago

Not to defend the costs or the state of the system, but the justification for the prices of medications in hospitals usually includes the time of the nurses, pharmacists, and techs that make the whole administration process happen safely. Also, hospitals will bill whatever amount they can get reimbursed. Most insurance companies have contracts with hospitals where they only get a fraction of the billed amount. The rest is written off by the hospital. Uninsured patients can usually work out payment plans for lower amounts as well. That said, healthcare in the US is still pretty damn expensive.

coenhyde 13y ago

The problem with having healthcare under private enterprise is that these healthcare providers do not operate under the free market conditions we assume they do. There is no "perfect information" allowing consumers to choose the cheapest price. As the article points out the pricing structure is very opaque. Not to mention the "consumers" want the best product regardless of cost, after all we are talking about their lives here. Given the lack of free market conditions operating on these healthcare providers it is only logical that they would behave like the extortion rackets they are.

ekianjo 13y ago
They dont operate in a free market. Everything is closely regulated and the patient cannot compare costs. Companies which would like to provide lower costs services would not be allowed to advertise them.
rogerbinns 13y ago
It is even worse than that. Lets say you want to open a medical facility that will lower costs. This will end up taking away business from other facilities where patients don't find the higher costs to provide value. In a free market, the new facility goes up, existing facilities have to compete, and consumers benefit. In 35 states you can't do that. Existing facilities are protected, and you'll need to establish a certificate of need[1] showing that business won't be taken away from existing facilities. The somewhat tortured logic is that they would then have to charge remaining patients more which would raise costs for everyone so this is a cost saving measure. Like many parts of US business it is good old fashioned protectionism, and not free markets. [1] http://en.wikipedia.org/wiki/Certificate_of_need http://en.wikipedia.org/wiki/Certificate_of_need
moocowduckquack 13y ago
There is never perfect information in any market. The continual problem with free market economics is that according to the definition, there has never been a free market anywhere in history. It is ideology with a thin veneer of mathematics.

microcolonel 13y ago

They don't clarify though, the costs of running a sufficiently-advanced multiple-effect distiller, dealing with the FDA, WHO and whomever else forces them to... these costs could definitely add up, no? What do you think the bar is for entering the market of providing water for injection? Who's there to make it costlier, maybe the insurance oligopoly can hold some of the blame for this as well...

zdean 13y ago
Apparently the bar isn't too high: http://www.zorotools.com/g/00107210/k-G4226537?utm_source=google_shopping&utm_medium=cpc&utm_campaign=Google_Shopping_Feed&kw={keyword}&gclid=COXYmb3vmbkCFVNo7AodNCYA5g http://www.zorotools.com/g/00107210/k-G4226537?utm_source=go...
icegreentea 13y ago
They list the manufacturer sale price right there ($1.07 a liter). The manufacturer is the one who has to go through the certifications, capital costs, and part of the overhead. All the remaining cost (the remaining 89 dollars) is overhead from the hospital, middle distributors (if they exist) and the such. The the majority of the cost of capital, dealing with regulation, and other "justified" increases is absorbed into the manufacturer sale price.
fnordfnordfnord 13y ago
It couldn't add up to more than the cost of a bottle of cheap vodka.

nikatwork 13y ago

Many in this thread are claiming that price fixing wouldn't occur in a "truly free" market. This is misty-eyed naivety. In a completely deregulated free market, it is even more in the hospitals' interest to form a price-fixing cartel. Any new player in the market trying to set reasonable market prices could be excluded through market pressure tactics (eg, tell distributors don't sell to them or our cartel will no longer use you). It seems to me that the parlous state of the US healthcare system is in fact a perfect demonstration of the dangers of a completely free market, and claims that "oh no it's not actually free enough" are merely handwaving.

mattstocum 13y ago
Even if there were perfect competition, it doesn't matter much, people don't comparison shop for ERs. If you are having a heart attack, you're not in a position to compare prices at local hospitals.
- zdean 13y ago
  Well, I think it would have to start somewhere. I'd be happy to be able to comparison shop for routine, non-emergency stuff...let's say dentists to start off with. I have a feeling that once you start chipping away at it, the outlying examples would get taken care of as well. There was a similar thread a few weeks back: https://news.ycombinator.com/item?id=6258597 https://news.ycombinator.com/item?id=6258597 It'd be great if the HN community started throwing out some ideas for disrupting this behemoth.
  - iyulaev 13y ago
    I think people already cross-shop dentists. When I had a root canal done I inquired at two places. And I'm not even very sensitive to it since I have dental insurance. Good luck with the same at hospitals though...
    - aestra 13y ago
      I would be nervous to do that. I trust my dentist, I know he does a good job, and is sensitive to my comfort, that's why I go there. I've been to a few terrible dentists before, and I've had to get dental work redone because it didn't last. Dentists seem to be so hit and miss. Doctors can be the same way, price isn't the only consideration.

socialized 13y ago

After spending six months in the hospital for orthopedic care for my news it became very apparent that unless you had a negotiated rate with your HMO or were on Medicare, pricing was the wild west. If you could discern what the bills were for via the medical codes, you would become outraged by the overhead. The best part is that hospitals get to hide behind HIPAA as they gouge and steal.

newsmaster 13y ago

What's the price of water in the desert? Somebody clearly realized this and appplied it to US healthcare system. Way to go capitalism.

hop 13y ago

What a baffling industry. Wish great things to any startup that tries to get through the bureaucratic/legal/insurance hurdles to take a crack at some of this.

joseph_cooney 13y ago
With centuries of regulatory capture, powerful, politically-connected vested interests with huge war-chests, and a deck full of trump-cards like 'safety' they can play, they might need more than just good wishes.

ucha 13y ago

Health expenditure per country (as a fraction of their GDP). The US spends 50% more than France while in France, health care is free and universal. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2225rank.html https://www.cia.gov/library/publications/the-world-factbook/...

jostmey 13y ago

And herein lies the true problem of medicine in America. We have the worst possible healthcare system. It is a privately run industry without any real competition. Almost anything would be better - either public healthcare or real competition. Instead, what we practice in America is an exercise in insanity played out on sick and injured.

sourc3 13y ago
I agree. When it comes to your or your family's health you will not go with "cheap" even if it is the same level or better service/outcome. This is why the entire system needs to first create a nice feedback loop. Right now there are no metrics on how well certain hospitals are doing that can drive patient selection. Usually, the patient just ends up going to the specialist their primary care provider referred them to or the closest one home. Until the quality/outcome data is made public there is no hope in steering people to better hospitals/providers. There are some attempts lately in freeing up this information but I guess only time will tell how effective they will become. On the bright side, it will only take one good health insurance company (I am thinking more like the type of disruption that a "Virgin" like company may bring to the table) to start using this data and driving some meaningful change.

angersock 13y ago

There was a really, really good (depressing) article I'd read about a year or two ago talking about how group purchasing organizations worked to influence the costs of devices. The example case was a guy who'd developed an auto-retracting needle, and was screwed out of business by some major manufacturers pressuring hospitals not to buy it. Does anyone have a link to that article?

t0dd 13y ago
Is this the article you refer to? "How the medical supply industry blocks device startups from selling to hospitals" http://www.washingtonmonthly.com/features/2010/1007.blake.html http://www.washingtonmonthly.com/features/2010/1007.blake.ht...
- angersock 13y ago
  Yep! Good find!

karlkatzke 13y ago

OT: It's truly a sad day when I have to check to make sure that I'm reading something in a news section and not the op/ed section of the grey lady.

dr_ 13y ago

Free market decisions will work when the patient has a choice. For example, when going for an outpatient visit to a doctors office that is scheduled in advance. One could argue that the patient has time to review their choices, call different providers and come to a decision. This is not the case when the patient is being urgently hospitalized. They are typically rushed to the closest medical center and are subject to the prices it charges and it's providers charge. Given that they have no choice, whatever system it is that leads to these high prices is unlikely to change - if you are forced to buy something from me, why wouldn't i charge you as much as i feel like for it? The government could get involved and force hospitals to adhere to a certain fee schedule - but why should for profit institutions have to adhere to this? In a truly capitalistic society they really shouldn't. The best ways to deal with this is to maximize insurance coverage, which is one goal of the affordable care act, and then to really use it as insurance and not to pay for every possible medical service a patient may require. Insurance companies will negotiate reasonable rates for hospitalizations. And if it's really being used as insurance and not to cover regular outpatient services, premiums would remain low as well. So would there still be stories of the $4 Tylenol tablet dispensed in the hospital? Probably - but in the grand scheme of things, it wouldn't matter as much.

Questioneer 13y ago

Near the end of my father's life, he needed medical equipment at home. The equipment was provided by a company that has deals worked out with all the local hospitals. The price for one oxygen condenser is covered after a victim(patient) pays for the device for around half a year. Looking over some others I know, they are all going through this same company. Referred to them by each of their hospitals. I cannot fully explain the scheme worked out from the hospitals, but I know it depends on having the often confused patient signing a bundle of documentation while he is being led out the door. I read over the documents and it seemed fair, I just had no time to research all that was needed. My father was in full legal control and he himself just simply followed through with what the hospital asked. Fuck you, Airway Oxygen.

idiot900 13y ago

So if the manufacturer charges a dollar for the bag of saline, and the hospital marks it up a couple orders a magnitude, hospitals must be absolutely swimming in cash, right? Did I miss that part in the article?

prawn 13y ago

1. Does the industry need a few Mannings and Snowdens? 2. How much progress in the world is stifled by powerful incumbents blocking competition? Taxi lobbyists tackling Uber, car industry impeding mass transit in LA decades ago, etc?

jonknee 13y ago
The industry already got one actually, I coincidentally came across this yesterday: http://www.bloomberg.com/news/2013-08-13/florida-pharmacists-win-597-million-blowing-whistle-on-scheme.html http://www.bloomberg.com/news/2013-08-13/florida-pharmacists... The TLDR is that an independent pharmacist treating AIDS patients got run out of business by price fixing competitors. He got the last laugh and sued on the behalf of the government and has so far collected $597M in awards (the government has collected over $3 billion). The behavior of these (very large) firms was outrageous: > For example, Abbott Laboratories (ABT) sold its antibiotic Vancomycin 1 GM FTV to customers for $4 a dose, according to a joint Justice Department and Ven-A-Care lawsuit. Abbott reported the cost to pricing publishers as $72.48 -- 18 times the actual amount, the lawsuit says. This is likely going on for other types of drugs and then also in every other segment (medical devices/supplies being a biggy).

ck2 13y ago

Basically it comes down to we'd rather let people die instead of telling hospitals they cannot do 10000% markup. Even limiting them to 1000% markup would be "wrong". Yay 'murica. Be sure to donate blood while you are waiting for your loved ones in the hospital so they can sell it for 10000% markup too.

rokhayakebe 13y ago
Population control, maybe?

bpm140 13y ago

I have two active kids and am reasonably active myself. We have probably received medical treatment a dozen times in the last year, a combination of walk-in clinics, personal physicians and emergency room visits, depending on the circumstances. During these visits, the staff have used equipment, given procedures and prescribed medication and have rarely, if ever, inquired about my thoughts on treatment. When my son jumped off the couch and cut the inside of his mouth open, I wasn't asked my opinion on treatment. And if I had been asked, I would have simply said "you're the physician, do what will make him better the fastest." The same would have gone for when I had pneumonia or had to get a tetanus shot after getting fishhooked while surfing. My goal is simple -- recover the best the fastest. How does one legitimately comparison shop for a baby delivery? Imagine, for instance, Hospital A says their births average $20,000 and Hospital B says their births average $30,000. Which rational prospective parent chooses the $20,000 option? Hospital care is not like buying a car, where most people can consider themselves educated enough to make a decision based on competing factors -- perhaps I'm willing to give up some handling for a lower price or I'm willing to sacrifice fuel economy for more power. The average person knows nada about the medical practicalities of giving birth (or treating pneumonia, or even stitching gums) so they cannot make informed decisions about what are reasonable tradeoffs. As other people have said, medical treatment is an inelastic need. Parents don't say "you know, I'm cool with 50% less effective treatment for my child at 50% of the cost" and people don't say "you know, 90% functionality of my leg will be just fine if you can bring this in at a discount." So not only do you have a lack of informed customers, you have a lack of choice in outcomes. A free market solution for medicine is a fairy tale spun by people of certain social and political persuasions.

gbhn 13y ago
The article focuses on what can hardly be considered a complicated good: salt water. Medical grade saline is highly regulated, and must be one of the most commodity products that exist in the country today. (The article takes pains to establish this.) It takes minimal effort to understand what it is or to compare prices. And yet, as the article says, there is no functioning market for it. For something like "set this broken bone" sure, it's difficult to talk about the price for this risk vs. that risk. But for the liters of saline used during the procedure? That ought to be trivial to analyze. Yet it is not.

ddeck 13y ago

I am of the firm belief that healthcare is one of the basic goods that should be provided by a government. Some may cry socialism and argue that free markets are more "efficient", but that assumes people shouldn't have equal right to basic healthcare services. It also ignores the fact that many of the generally accepted principals required for a functioning free market are difficult to achieve in healthcare. In an emergency situation, for example, buyers are likely constrained to the closest hospital, at which point that hospital become a monopoly for that particular buyer. When the the good on offer is survival, it's easy to see where problems might arise. I live in a country that has been rated the freest economy on earth every year since 1995 [1]. Low taxes, small government, minimal regulation. So what does healthcare look like here for the average person? $13/day. Got a sore finger? $13/day. Intensive care? $13/day. There is a significant parallel private system that offers all the luxuries and perks that a free market can provide (no waiting times, private rooms, choice of doctor etc.). But it competes with the public hospitals for buyers. In providing a competing alternative, I would speculate that the public system limits the type of monopolistic situations that can arise. No system is perfect and clearly there are enormous differences between the US and elsewhere, but it's interesting to note that the "freest economy on earth" has universal public healthcare, in addition to a freely competing private system. [1] http://en.wikipedia.org/wiki/Index_of_Economic_Freedom http://en.wikipedia.org/wiki/Index_of_Economic_Freedom [2] http://en.wikipedia.org/wiki/Health_in_Hong_Kong http://en.wikipedia.org/wiki/Health_in_Hong_Kong [3] http://www.news.gov.hk/en/record/html/2013/04/20130409_190409.shtml http://www.news.gov.hk/en/record/html/2013/04/20130409_19040...

_pmf_ 13y ago

And what about these web sites for thousands of dollars? I mean, if I can throw something together in 30 minutes using MS Paint and Wordpad, how ridiculous is it that a designer charges more than 20 USD per hour? Ah, I see. It's only en vogue to complain if I don't know anything at all about the constraints of the domain and am pulling stuff out of my ass. My bad.

deleted 13y ago

[deleted]