5 ms·

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 cli

by 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.
- bpm140 13y ago
  But the need is still fundamentally inelastic. You're seriously ill from food poisoning and you've lost a lot of fluids. The ER nurse is about to stick an IV into you and wave your hand weakly and say "Wait, how much is that IV fluid you're putting in there?" The nurse says $500. Option 1) You say "no way, I can't pay that." The nurse shrugs and says "well, that's what it costs for IV solution here." Option 2) You say "holy hell that seem expensive for a bag of salt water." The nurse shrugs and says "well, that's what it costs for IV solution here." Option 3) You say "I'm really not comfortable paying that. What other treatment can I get?" The nurse shrugs and says "sir, this is the standard protocol for treating acute food poisoning. We put a saline solution into your arm via IV to replace your fluids. There is no alternate treatment. We're really busy in the ER, so I need to put this needle in your arm or get to another patient." Now let's add a functioning market as you allude to: Option 3, redux) You say "I'm really not comfortable paying that. What other treatment can I get?" The nurse says "well, we also have this other saline solution for a buck." You, reasonably, say "wait, what? Why is this other one 500 times cheaper than the first one?" The nurse shrugs and says "no idea, I don't make them. They both seem fine to me though." You, still being reasonable, say "then why is one so much more expensive than the other? Will the cheaper one do just as good a job as the expensive one?" The nurse shrugs her shoulders and says "look, I can't promise anything one way or the other. We default to the more expensive one but if you want the cheaper one, that's your choice. It's probably fine. Just sign this form that you're opting for the cheaper solution." What does a rational person with zero context choose?
  - BudVVeezer 13y ago
    That depends on what the rational person can afford. When they're thinking "500$ means I don't make my house or car payment this month and I'm not certain how I'll feed my family", they may say "I'll take the 1$ bag", consequences-be-damned. And they're still a "rational" person.
zdean 13y ago
"How does one legitimately comparison shop for a baby delivery?" How did you and your spouse decide on an ob/gyn when you were expecting your kids? How did you decide on a pediatrician after they were born? Would you be able to rate your experience with both/either after the fact (ie, did the experience live up to the reasons you chose them?)? Would it be possible to use such ratings along with costs to at least create some measure of efficacy for the specific providers or their hospitals/clinics? The outcome may not be a perfect solution, but it at least gives people some data points if they are interested in comparing doctors/clinics/hospitals for whatever their needs are.
- lscharen 13y ago
  My wife and I did pick the doctor (of 4 pediatricians) that was recommended to us by friends that had a good care and delivery experience. BUT ... there is only one hospital here and all of the doctors are part of the same system. So, although we could "comparison shop" for our physician, this had no effect on what we would (potentially) pay.
five18pm 13y ago
You are equating higher cost with better quality. There usually is a correlation, but with US healthcare's opaqueness with prices, I wouldn't make that correlation. Leaving aside that, people do in fact make medical decisions based on cost. For example, for angioplasty there are two options - a medicated stent and a non-medicated, regular stent. The medicated stent is more expensive than the normal one. When it came to choosing one for my father, I chose a medicated one only because I was paying through insurance. But many of the patients out here in India don't have insurance. In that case there is a definite probability that a lower cost one will be chosen. Another example is dialysis. The frequency at which people perform dialysis is directly related to cost and affordability. It is not always a given that patients would go for the absolute best.
- aestra 13y ago
  Anesthesia during wisdom teeth extraction is another good example. I was given 3 options by the oral surgeon (with prices attached) 1) (Cheapest) local 2) (Middle) nitrous oxide 3) (Most expensive) IV sedation In my case my oral surgeon basically said I'd be nuts to go with option 1, since my surgery was complicated.
bzbarsky 13y ago
A few things, specifically about the US health care system: 1) Unlike medical procedures, for dental procedures it's pretty easy to get price quotes from multiple dentists: they will tell you their sticker price if asked. They will also give you the procedure code so you can ask your dental insurance (if any) to what extent that's covered so you'll know what the actual price to you is. People will in fact comparison-shop for major dental procedures, based on cost, dentist reputation, etc. 2) The situation with emergency or time-sensitive procedures (pneumonia, tetanus shot, cut inside mouth) and scheduled non-emergency ones (hip replacement, say, or laser eye surgery) is a priori quite different. It is in fact possible to sanely price-shop for hip replacements if people are willing to tell you prices and there is reputational data available. Unfortunately the medical establishment works hard to prevent both. Laser eye surgery is a particularly interesting case, because there _is_ freely available price information there; you may want to look at what's happened to its price over time. Learning as much about such a procedure as people tend to know about buying cars is not actually all that hard: people don't know that much about cars and there really isn't that much to know about some of the fairly standardized scheduled procedures. 3) People do in fact do the "90% functionality at much lower cost is just fine" thing all the time, with glasses (e.g. buying reading glasses at CVS instead of getting a prescription pair), dental procedures, and some scheduled medical procedures. You're right that "50% less effective treatment at 50% of the cost" doesn't happen much, though. Instead you get 100% less effective lack of treatment at 0% of the cost.... 4) Since you brought up baby deliveries.... Sorry, pet peeve. If a hospital is charging you $20000 for a low-risk birth with no complications (which they definitely do!), that's an excellent indicator of how broken the system is. If you shop around for how much that sort of thing costs with people who specialize in low-risk births (birth centers, midwives), you will discover that the typical price for birth plus prenatal visits with no complications in the US is in the $3-5k range. Of course such a setup will not do the various wholly unnecessary things that will be done in a typical hospital birth setting, nor will it be subject to typical hospital billing practices. 5) A good bit of care in the US is end-of-life care, where it is in fact quite possible to make price/time tradeoffs to some extent, as well as comfort/time ones (e.g. hospice vs aggressive cancer treatment that might prolong life for a few months) and people who are in a position to make that choice can in fact make it in an informed way. In practice, what we call "medicine" is a bunch of separate services that have totally different economics, often being bundled together with completely opaque pricing put on top. For some of them, there is lack of informed customers and lack of choice in outcomes, as you say. For others one or both are present. And even today some parts of "medicine" (e.g. scheduled dental cleanings) work quite different from other parts (e.g. pediatric well-child checkups; try to get a price quote from a doctor for one of these!) for no particularly good reasons that I can see. The "right" solution to this problem is unclear to me, unfortunately, because as you point out there is a fair amount of emergency medicine where a free market cannot possibly operate. A good example of such a thing is the total lack of any possibility of a free market in emergency ambulance transport, from the patient's point of view. We should stop our attempts at a fake free market in those areas, but we should also try to create actual free markets in medicine where possible. And for quite a few things I believe it is in fact possible.

by bpm140 13y ago

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.

bpm140 13y ago
But the need is still fundamentally inelastic. You're seriously ill from food poisoning and you've lost a lot of fluids. The ER nurse is about to stick an IV into you and wave your hand weakly and say "Wait, how much is that IV fluid you're putting in there?" The nurse says $500. Option 1) You say "no way, I can't pay that." The nurse shrugs and says "well, that's what it costs for IV solution here." Option 2) You say "holy hell that seem expensive for a bag of salt water." The nurse shrugs and says "well, that's what it costs for IV solution here." Option 3) You say "I'm really not comfortable paying that. What other treatment can I get?" The nurse shrugs and says "sir, this is the standard protocol for treating acute food poisoning. We put a saline solution into your arm via IV to replace your fluids. There is no alternate treatment. We're really busy in the ER, so I need to put this needle in your arm or get to another patient." Now let's add a functioning market as you allude to: Option 3, redux) You say "I'm really not comfortable paying that. What other treatment can I get?" The nurse says "well, we also have this other saline solution for a buck." You, reasonably, say "wait, what? Why is this other one 500 times cheaper than the first one?" The nurse shrugs and says "no idea, I don't make them. They both seem fine to me though." You, still being reasonable, say "then why is one so much more expensive than the other? Will the cheaper one do just as good a job as the expensive one?" The nurse shrugs her shoulders and says "look, I can't promise anything one way or the other. We default to the more expensive one but if you want the cheaper one, that's your choice. It's probably fine. Just sign this form that you're opting for the cheaper solution." What does a rational person with zero context choose?
- BudVVeezer 13y ago
  That depends on what the rational person can afford. When they're thinking "500$ means I don't make my house or car payment this month and I'm not certain how I'll feed my family", they may say "I'll take the 1$ bag", consequences-be-damned. And they're still a "rational" person.

zdean 13y ago

"How does one legitimately comparison shop for a baby delivery?" How did you and your spouse decide on an ob/gyn when you were expecting your kids? How did you decide on a pediatrician after they were born? Would you be able to rate your experience with both/either after the fact (ie, did the experience live up to the reasons you chose them?)? Would it be possible to use such ratings along with costs to at least create some measure of efficacy for the specific providers or their hospitals/clinics? The outcome may not be a perfect solution, but it at least gives people some data points if they are interested in comparing doctors/clinics/hospitals for whatever their needs are.

lscharen 13y ago
My wife and I did pick the doctor (of 4 pediatricians) that was recommended to us by friends that had a good care and delivery experience. BUT ... there is only one hospital here and all of the doctors are part of the same system. So, although we could "comparison shop" for our physician, this had no effect on what we would (potentially) pay.

five18pm 13y ago

You are equating higher cost with better quality. There usually is a correlation, but with US healthcare's opaqueness with prices, I wouldn't make that correlation. Leaving aside that, people do in fact make medical decisions based on cost. For example, for angioplasty there are two options - a medicated stent and a non-medicated, regular stent. The medicated stent is more expensive than the normal one. When it came to choosing one for my father, I chose a medicated one only because I was paying through insurance. But many of the patients out here in India don't have insurance. In that case there is a definite probability that a lower cost one will be chosen. Another example is dialysis. The frequency at which people perform dialysis is directly related to cost and affordability. It is not always a given that patients would go for the absolute best.

aestra 13y ago
Anesthesia during wisdom teeth extraction is another good example. I was given 3 options by the oral surgeon (with prices attached) 1) (Cheapest) local 2) (Middle) nitrous oxide 3) (Most expensive) IV sedation In my case my oral surgeon basically said I'd be nuts to go with option 1, since my surgery was complicated.

bzbarsky 13y ago

A few things, specifically about the US health care system: 1) Unlike medical procedures, for dental procedures it's pretty easy to get price quotes from multiple dentists: they will tell you their sticker price if asked. They will also give you the procedure code so you can ask your dental insurance (if any) to what extent that's covered so you'll know what the actual price to you is. People will in fact comparison-shop for major dental procedures, based on cost, dentist reputation, etc. 2) The situation with emergency or time-sensitive procedures (pneumonia, tetanus shot, cut inside mouth) and scheduled non-emergency ones (hip replacement, say, or laser eye surgery) is a priori quite different. It is in fact possible to sanely price-shop for hip replacements if people are willing to tell you prices and there is reputational data available. Unfortunately the medical establishment works hard to prevent both. Laser eye surgery is a particularly interesting case, because there _is_ freely available price information there; you may want to look at what's happened to its price over time. Learning as much about such a procedure as people tend to know about buying cars is not actually all that hard: people don't know that much about cars and there really isn't that much to know about some of the fairly standardized scheduled procedures. 3) People do in fact do the "90% functionality at much lower cost is just fine" thing all the time, with glasses (e.g. buying reading glasses at CVS instead of getting a prescription pair), dental procedures, and some scheduled medical procedures. You're right that "50% less effective treatment at 50% of the cost" doesn't happen much, though. Instead you get 100% less effective lack of treatment at 0% of the cost.... 4) Since you brought up baby deliveries.... Sorry, pet peeve. If a hospital is charging you $20000 for a low-risk birth with no complications (which they definitely do!), that's an excellent indicator of how broken the system is. If you shop around for how much that sort of thing costs with people who specialize in low-risk births (birth centers, midwives), you will discover that the typical price for birth plus prenatal visits with no complications in the US is in the $3-5k range. Of course such a setup will not do the various wholly unnecessary things that will be done in a typical hospital birth setting, nor will it be subject to typical hospital billing practices. 5) A good bit of care in the US is end-of-life care, where it is in fact quite possible to make price/time tradeoffs to some extent, as well as comfort/time ones (e.g. hospice vs aggressive cancer treatment that might prolong life for a few months) and people who are in a position to make that choice can in fact make it in an informed way. In practice, what we call "medicine" is a bunch of separate services that have totally different economics, often being bundled together with completely opaque pricing put on top. For some of them, there is lack of informed customers and lack of choice in outcomes, as you say. For others one or both are present. And even today some parts of "medicine" (e.g. scheduled dental cleanings) work quite different from other parts (e.g. pediatric well-child checkups; try to get a price quote from a doctor for one of these!) for no particularly good reasons that I can see. The "right" solution to this problem is unclear to me, unfortunately, because as you point out there is a fair amount of emergency medicine where a free market cannot possibly operate. A good example of such a thing is the total lack of any possibility of a free market in emergency ambulance transport, from the patient's point of view. We should stop our attempts at a fake free market in those areas, but we should also try to create actual free markets in medicine where possible. And for quite a few things I believe it is in fact possible.