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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
by 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 agoEven 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 agoWell, 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 agoI 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 agoI 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.
- jes 13y agoHow do you explain other free markets that obviously deliver quality products at low prices? I don't feel gouged when I buy a television, a cell phone or lumber at Home Depot.
- gnoway 13y agoWell presumably you're not suffering from an ailment that requires immediate application of TV, Angry Birds or a 2x4 in those cases.
- twoodfin 13y agoEmergency care has to be just a piece of the cost pie. People shop around for health care all the time, including for very expensive things like childbirth.
- GabrielF00 13y agoThere was just a big NY Times article on the cost of childbirth. Turns out its extremely hard to shop around. Not only is it much more expensive in the US than in any other country to give birth, but, with a few exceptions, it's very difficult to get pricing information in advance. To quote: >When she became pregnant, Ms. Martin called her local hospital inquiring about the price of maternity care; the finance office at first said it did not know, and then gave her a range of $4,000 to $45,000. http://www.nytimes.com/2013/07/01/health/american-way-of-birth-costliest-in-the-world.html?pagewanted=all http://www.nytimes.com/2013/07/01/health/american-way-of-bir...
- mpyne 13y agoPlus when you "shop around" you still need to select a doctor's office which is close enough to be within viable range once the moment of delivery is at hand. Even in the suburban areas I've lived in, for us that meant a "selection" of between 3-4 potential clinics, not exactly a very wide choice (and completely based on where I lived so it could very well have been that I would have been selecting from 4 of the worst clinics in the whole state).
- gnoway 13y agoWell you can hardly have a free market for healthcare in the first place. A functional market requires that consumers be vigilant and make good choices. That's hard enough without being sick or injured. I like to think of myself as a free markets guy, but driving healthcare via the market seems like the worst, most cynical application of the concept possible.
- jes 13y agoWith respect, what is a functional market, and why does such a market require that consumers be vigilant and make good choices? If consumers make bad choices, don't they eventually learn to make better choices?
- mpyne 13y ago> If consumers make bad choices, don't they eventually learn to make better choices? Even if we assume that consumers will learn to make good choices, that would require that they understand their choice was a bad one. This is an A-B-C problem (antecedent + behavior => consequence). The consumer must first recognize that a negative consequence has occurred, and then determine whether it was their behavior that was flawed (they made the wrong choice) or a flawed antecedent to that behavior (they'd made the right choice, had their assumed knowledge of the situation been accurate). Consumers don't do this though. Studies have repeatedly proved this (e.g. the very large effect of marketing and advertising on selection of products of otherwise equal quality). Consumers may make decisions that are non-harmful (i.e. they got about the same result but simply paid more) but they certainly do not make decisions that are optimal.
- rdtsc 13y agoI am sure you'd be more careful next time after you tell the ambulance driver to take you to a sub-optimal hospital were they end up killing you.
- krichman 13y agoLook at Apple's App Store. It restricts what developers can do (and charge) and it restricts what users can download (and where from). But, because the short-term benefits are good enough, many people do use it, to the detriment of the group.
- CamperBob2 13y agoIt 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 I... I just... wow.
- jdminhbg 13y ago> the US healthcare system ... a completely free market I have read a lot of wrong things on HN, ranging from the merely misinformed to the willfully ignorant, but this might take the cake.
- delinka 13y agoI wonder if, perhaps, you could provide a counterargument to nikatwork.
- jdminhbg 13y agohttp://en.wikipedia.org/wiki/Medicare_%28United_States%29 http://en.wikipedia.org/wiki/Medicare_%28United_States%29 http://en.wikipedia.org/wiki/Medicaid http://en.wikipedia.org/wiki/Medicaid http://en.wikipedia.org/wiki/Hipaa http://en.wikipedia.org/wiki/Hipaa http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act http://en.wikipedia.org/wiki/Patient_Protection_and_Affordab... This is kind of like condescendingly asking someone to provide a counterargument to a proposition that the Earth is completely dry land.
- rogerbinns 13y agohttp://en.wikipedia.org/wiki/Certificate_of_need http://en.wikipedia.org/wiki/Certificate_of_need
- deleted 13y ago[deleted]
- abalone 13y agoThose are insurers. The article is about the hospital supply market. In particular, the completely unregulated part of the hospital supply chain. So.. are you merely misinformed, or willfully ignorant?
- jdminhbg 13y ago
- pash 13y agoMany people think "free markets" when they should think "competitive markets".
- moocowduckquack 13y agoTwo of the major things that are said to be features of free markets are deregulation and price transparency. The trouble is that deregulation and price transparency are often opposing forces.
- Zigurd 13y agoExactly this. All markets are more or less "free" and the question is how to structure markets to deliver the greatest benefit. Absolutists about free markets are at least being purposefully obtuse if they don't admit that they think vendors should win every advantage from irrationality, inelasticity, and information asymmetry, plus every transitory advantage as markets get dominated for a supposedly temporary interval and for supposedly salutary purposes. The above, combined with a bias toward investor-owned enterprises over co-ops, customer-owned, and nonprofit enterprises is what brought us to a place where market liberalization only hardens the position of incumbents.
- deleted 13y ago[deleted]