Pricing transparency in healthcare to the public is a largely pointless act. This is a classic example of a capitalist market failure. Medical services are not fungible commodities. People aren't...
Pricing transparency in healthcare to the public is a largely pointless act.
This is a classic example of a capitalist market failure. Medical services are not fungible commodities.
People aren't shopping out procedures until they're in a position of dire, excruciating need - these are not "spherical cow" rational economic actors, but rather families contemplating life and death, or lifelong pain and disability.
They will invariably select what their "expert" doctors tell them is the "best" care, often as a part of a partner or insurer network. Outcomes are actually critically dependent on the facility and physicians chosen, but patients get what they're given, and most can only shop for purely elective procedures.
The monetary price of the service is, in the U.S. at least, only loosely tied to objective measures like improvement of function, years of survival, and so on. Publishing prices, without corresponding data on mortality and morbidity as well as outcome measures for the specific procedure, is meaningless.
One of the best things about single-payer systems is the ability to gather comprehensive data that allows true comparison of quality for price.
Healthcare is a major omission from traditional macroeconomics because it completely averts the traditional supply and demand models for generating the price of saving a human life at any cost....
Healthcare is a major omission from traditional macroeconomics because it completely averts the traditional supply and demand models for generating the price of saving a human life at any cost.
Unlike ideal markets, a hospital has an obligation to treat every customer/person who comes through the door, insured or not. The injured do not “shop around” until they find the right price. In many cases, they’ve already incurred a cost of an ambulance, and the cheapest scenario is to go to the closest hospital (assuming the “customer” even has a choice in the matter).
Even prescriptions have a different cost at face value than the insurer-negotiated cost. Big pharma has a financial incentive to keep you addicted/dependent on long term drugs.
No aspect of the system behaves according to traditional economics, and I think that’s a little fucked up, given the fact that healthcare is an age-old tradition whose origins can even be argued to date as far back as monkey grooming.
We’re currently combatting a moral imperative (help others) with a capitalist ideal (only look after oneself). I don’t believe the two can cohabitate our world: they are divergent ideologies. I do think with tweaking, they can operate in a more socialist environment, but that’s not guaranteed (e.g. if the elderly outnumber the abled, you have a different system of imbalance).
I’m not confident the US will get its shit together within my own lifetime, but the prospect of dying a slow and painful death under the guise of a “civilized nation” seems absurd, regardless of circumstance.
Back in the public health school days, I had to take a course in healthcare economics. The most important takeaway was that healthcare will always break price curves because the demand for healthy...
Back in the public health school days, I had to take a course in healthcare economics. The most important takeaway was that healthcare will always break price curves because the demand for healthy longevity is unlimited.
Interesting. More transparency into pricing would be fantastic. I'm not sure this is the right way to accomplish this, but putting pressure on the industry to fix itself is a good step.
Interesting. More transparency into pricing would be fantastic. I'm not sure this is the right way to accomplish this, but putting pressure on the industry to fix itself is a good step.
So it's now being mentioned that price transparency on its own may actually increase prices. What do Danish concrete and broiler chickens have to do with the U.S. cost of medical care? When a...
Exemplary
So it's now being mentioned that price transparency on its own may actually increase prices.
When a limited number of competing players can see the full marketplace, they can set coordinated prices without actively colluding with each other. You've probably seen this in action at neighborhood gas stations - prices vary by no more than a few pennies among locations of different brands. There's no incentive to lower prices when you know exactly what your competitors are charging, the product is relatively uniform regardless of brand, and the customers aren't price-sensitive to small variations.
With medical care, the assumption is that nearly all doctors and hospitals meet minimum standards - a relatively uniform product. The marketplace in most localities is dominated by one or two hospital systems. Insurer-negotiated payments, or public payment systems that price as a percentage of stated fees, tend to increase "list" prices. So it's a perfect recipe for marketplace-wide price fixing, in the absence of regulation.
The other downside is potential supply restriction to support prices. When rural hospitals know that their prices are uncompetitive, and they can't make enough to cover higher fixed costs, they close.
Patients go to big city hospitals, which can then charge more, or forgo care, which drives up systemic costs for critical treatments (not to mention needless suffering and deaths).
I'm glad I'll be given a full price list as I'm being wheeled in, unconscious. Gives me a chance to have them send me to Wal-Hospital, so I can save some money.
I'm glad I'll be given a full price list as I'm being wheeled in, unconscious. Gives me a chance to have them send me to Wal-Hospital, so I can save some money.
Pricing transparency in healthcare to the public is a largely pointless act.
This is a classic example of a capitalist market failure. Medical services are not fungible commodities.
People aren't shopping out procedures until they're in a position of dire, excruciating need - these are not "spherical cow" rational economic actors, but rather families contemplating life and death, or lifelong pain and disability.
They will invariably select what their "expert" doctors tell them is the "best" care, often as a part of a partner or insurer network. Outcomes are actually critically dependent on the facility and physicians chosen, but patients get what they're given, and most can only shop for purely elective procedures.
The monetary price of the service is, in the U.S. at least, only loosely tied to objective measures like improvement of function, years of survival, and so on. Publishing prices, without corresponding data on mortality and morbidity as well as outcome measures for the specific procedure, is meaningless.
One of the best things about single-payer systems is the ability to gather comprehensive data that allows true comparison of quality for price.
Healthcare is a major omission from traditional macroeconomics because it completely averts the traditional supply and demand models for generating the price of saving a human life at any cost.
Unlike ideal markets, a hospital has an obligation to treat every customer/person who comes through the door, insured or not. The injured do not “shop around” until they find the right price. In many cases, they’ve already incurred a cost of an ambulance, and the cheapest scenario is to go to the closest hospital (assuming the “customer” even has a choice in the matter).
Even prescriptions have a different cost at face value than the insurer-negotiated cost. Big pharma has a financial incentive to keep you addicted/dependent on long term drugs.
No aspect of the system behaves according to traditional economics, and I think that’s a little fucked up, given the fact that healthcare is an age-old tradition whose origins can even be argued to date as far back as monkey grooming.
We’re currently combatting a moral imperative (help others) with a capitalist ideal (only look after oneself). I don’t believe the two can cohabitate our world: they are divergent ideologies. I do think with tweaking, they can operate in a more socialist environment, but that’s not guaranteed (e.g. if the elderly outnumber the abled, you have a different system of imbalance).
I’m not confident the US will get its shit together within my own lifetime, but the prospect of dying a slow and painful death under the guise of a “civilized nation” seems absurd, regardless of circumstance.
Back in the public health school days, I had to take a course in healthcare economics. The most important takeaway was that healthcare will always break price curves because the demand for healthy longevity is unlimited.
Interesting. More transparency into pricing would be fantastic. I'm not sure this is the right way to accomplish this, but putting pressure on the industry to fix itself is a good step.
This smells an awful lot like a publicity softball. Why work to fix the problem when you can do effectively nothing and still make yourself look good?
So it's now being mentioned that price transparency on its own may actually increase prices.
What do Danish concrete and broiler chickens have to do with the U.S. cost of medical care?
When a limited number of competing players can see the full marketplace, they can set coordinated prices without actively colluding with each other. You've probably seen this in action at neighborhood gas stations - prices vary by no more than a few pennies among locations of different brands. There's no incentive to lower prices when you know exactly what your competitors are charging, the product is relatively uniform regardless of brand, and the customers aren't price-sensitive to small variations.
With medical care, the assumption is that nearly all doctors and hospitals meet minimum standards - a relatively uniform product. The marketplace in most localities is dominated by one or two hospital systems. Insurer-negotiated payments, or public payment systems that price as a percentage of stated fees, tend to increase "list" prices. So it's a perfect recipe for marketplace-wide price fixing, in the absence of regulation.
The other downside is potential supply restriction to support prices. When rural hospitals know that their prices are uncompetitive, and they can't make enough to cover higher fixed costs, they close.
Patients go to big city hospitals, which can then charge more, or forgo care, which drives up systemic costs for critical treatments (not to mention needless suffering and deaths).
I don't trust it. It's going to twist into something bad for the public somehow.
I'm glad I'll be given a full price list as I'm being wheeled in, unconscious. Gives me a chance to have them send me to Wal-Hospital, so I can save some money.
It seems like that would essentially make cost-claims indisputable, right?