gavinfielder
DP Veteran
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- Sep 24, 2012
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- Sacramento, CA, USA
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- Libertarian - Left
This video claims that the primary reason for rising healthcare costs in the US is inelastic demand. He goes through it and gives quite a few justifications, but I don't think he really connected the dots. Sure, demand for healthcare is inelastic, but you still have competing providers, so in a functional market, you shouldn't have companies able to charge extreme prices without cutting out their consumer base.
I claim that markets generally stop functioning under two conditions. A lack of choices, or a lack of information. If you agree, which would it be in the case of healthcare and why? Or is it something else entirely?
Both. If you're child has a broken leg you aren't going to shop around for a hospital to treat him at a lower price. You pay anything they ask.
Similarly, if a doctor tells you need this or that treatment involving this or that pharmaceutical costing thousands of dollars, you're in no position to question him about it, or even understand his answers (unless you want to go to law school). In addition sick people are often not in a position to be rationally evaluating information of a complex nature. That's why you've gone to a doctor.
So price inelasticity is an obvious element of health care making our for-profit system totally inappropriate and dysfunctional in providing public health.
People don't want to negotiate when they're sick and injured: they want a health care system that treats them without having to go bankrupt. Our system can't do that. Time to get universal single payer. It's the only system that works for health care.
If you know of a hospital that offers the same care for 50% cheaper, then you're going to that hospital. There is no debate about that.
Seems to me that those prices aren't set by a market. The patent allows monopoly privilege.
You're confusing rationing with serving the needs of consumers.
If you know of a hospital that offers the same care for 50% cheaper, then you're going to that hospital. There is no debate about that.
This video claims that the primary reason for rising healthcare costs in the US is inelastic demand. He goes through it and gives quite a few justifications, but I don't think he really connected the dots. Sure, demand for healthcare is inelastic, but you still have competing providers, so in a functional market, you shouldn't have companies able to charge extreme prices without cutting out their consumer base.
There most certainly is a debate about that. Have you ever tried to get a price for a specific service from the hospital? Even an x-ray?
Call your local hospital. Let me know.
This video claims that the primary reason for rising healthcare costs in the US is inelastic demand. He goes through it and gives quite a few justifications, but I don't think he really connected the dots. Sure, demand for healthcare is inelastic, but you still have competing providers, so in a functional market, you shouldn't have companies able to charge extreme prices without cutting out their consumer base.
I claim that markets generally stop functioning under two conditions. A lack of choices, or a lack of information. If you agree, which would it be in the case of healthcare and why? Or is it something else entirely?
Unless you have a full time job pricing hospital treatment programs and happen to suffer from the ailment that is cheaper, this is meaningless. The transaction cost of finding out which is cheaper isn't worth it.
Patents create markets so this isn't on point.
We already ration by income so this isn't relevant.
an essential service with inelastic demand being delivered by three levels of for-profit entities
There most certainly is a debate about that. Have you ever tried to get a price for a specific service from the hospital? Even an x-ray?
Call your local hospital. Let me know.
I agreed with the rest, but fail to see why this is a problem. Food and shoes are essential goods that are provided for by markets. Yet we don't have a problem there. What is the difference?
I agreed with the rest, but fail to see why this is a problem. Food and shoes are essential goods that are provided for by markets. Yet we don't have a problem there. What is the difference?
This video claims that the primary reason for rising healthcare costs in the US is inelastic demand. He goes through it and gives quite a few justifications, but I don't think he really connected the dots. Sure, demand for healthcare is inelastic, but you still have competing providers, so in a functional market, you shouldn't have companies able to charge extreme prices without cutting out their consumer base.
I claim that markets generally stop functioning under two conditions. A lack of choices, or a lack of information. If you agree, which would it be in the case of healthcare and why? Or is it something else entirely?
because food is cheap, and access is guaranteed.
also, choosing one of the thousands of varieties of cheap shoes is not analogous to having your kid break an arm.
Exactly. There is no difference. It's an emotional thing for those who think that stuff should be free, and for those who believe that healthcare is somehow different than any other product or industry.
No one REALLY NEEDS a MRI, or any other healthcare treatment. Just 50 years ago most of these nice medical proceedures didn't even exist. It's nice to have... if you can afford it, just like one of those fancy Italian sports cars are nice to have...if you can afford it.
Why is food cheap? How is access guaranteed?
It is if the kid has thousands of doctors to choose from all offering their services and competing against each other.
Everyone doesn't have to price shop for every emergency treatment. If just more people price shopped, for non-emergency treatment, prices would tend to fall.
I don't price shop for absolutely everything that I purchase, but I rest assured that because some people price shop, prices at most places for most stuff are held in check by them price shopping.
I've mentioned the story about my son falling out of a tree before, so I won't go into the long details of that story again, but it is definitely possible to price shop, in one form or another, even for emergency care. Most emergencies aren't time critical life or death situtuations, patients are transfered between health care providers all the time for major treatments. And as long as I am concious, it's not really that difficult for me to tell the ambulance driver to take me to Hospital B instead of Hospital A.
One of the most important things that would be necessary to have price competition between medical care providers is simply to require that all health care providers make their superbill pricing information public. It could be posted on the internet, or in their office, or available over the phone by request. I have people to price shop my business all the time, I can't think of a reason that I shouldn't be able to do that at a doctors office or emergency care facility.
I actually don't want cheap medical care, or doctors who are trying to price bargain in order to get a competitive advantage, which means cutting corners. I don't think I'd opt for $50 brain surgery anymore than I want a Yugo. I want doctors to focus on professionalism in providing medical care, not hustling for profits like used car salesmen
Health care simply isn't a typical market for the reasons cited. What people want is to get quality professional health care when they need it without going bankrupt and without going through the kind of stressful transaction costs (negotiations) that you would in buying a second hand end table at a swap meet.
Finally, and this is critical, health care involves more than individual health. It involves public health. For individuals to remain healthy the entire society has to avoid bad health outcomes (like people with flu not going to the doctors because they can't afford it).
(Not to mention that it's immoral to deny health care to people because they lack funds).
it's cheap because we live in the world's kitchen.
when your kid is critically ill or injured, do you shop around for the best price? no, you call an ambulance. does your employer provided insurance even give you the option of picking any doctor?
to support your argument and to take this out of the hypothetical, quote me the prices of emergency rooms within driving distance for the treatment of a broken arm. how competitive are these prices?
Even without, food is very affordable.
What does this even mean?
As for the first part, you probably go to the hospital that has a reputation for providing good services at a low price. You probably don't look up what store has the best price on apples, you just go. Usually there isn't much of a price difference. Why would we expect any different with medicine?
As for the second part, this is an example of how we don't have a market in healthcare.
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