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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

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.

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.