It is very difficult to shop around for prices in the American health care system. Your average person can't do it and most really capable people could not do it either.
Giving people cash as their Medicare/Medicaid would be a complete disaster. Bulk buying by the government goes right out the window, no cost controls at all and completely ignores what insurance is in the first place. People are generally dumb. If you gave them cash and said this is your medicare, they would take it and spend it on everything but medical care. In the end, they would get sick and die or be crippled or worse, they would still go to the hospital and then leave everyone else with the bill.
We know prices would never drop to the floor because that is the system we have in place now and prices keep going up.
"Market" means "crowd sourced pricing". The alternative is a person or a small group of people setting prices, controlling access, setting standards, etc. Once you think that's a better idea, you are responsible for further clarifying how those people will be held accountable for their decisions.
I don't see a non-market proposal that is honest about the concentration of power and actually tackles the problem of accountability. I don't want a national medical code mess growing alongside our tax code. I don't want new and exciting fields of healthcare law and lobbying opening up. I don't want (pick: Donald Trump or Barak Obama) being the national Hospital-Administrator-in-Chief.
Define "how much something costs?" I can pull up the spec sheet from my insurance company and tell you the in network price and out of network price for just about anything. The crappy system we have now sets the price between you and the insurance company. It's not that the providers don't want you to know how much something costs, they don't know how much it costs.
Conversely, I can go into the local urgent care here, a place that caters to many uninsured. The prices for their services are literally posted on the wall, not unlike the menu at a fast food restaurant. You know exactly how much an x-ray costs, or a cold/flu visit, or a cast, etc. When people are paying for these services with their own money and the prices aren't the result of some individualized, convoluted pay schedule with your insurance provider, then the prices suddenly become extremely transparent.
>and completely ignores what insurance is in the first place.
Insurance is there to help you out in the event of a disaster, not to pay your ongoing day to day costs. So let's make sure we're really talking about insurance.
>If you gave them cash and said this is your medicare, they would take it and spend it on everything but medical care. In the end, they would get sick and die or be crippled or worse,
That is historically incorrect. Yes, people may choose to spend less on healthcare than you would like them to, but why do you feel the need to be so authoritarian about your opinion on what's best for them?
>then leave everyone else with the bill.
Only if people like you force it on us.
>We know prices would never drop to the floor because that is the system we have in place now and prices keep going up.
As was pointed out by another poster the prices for elective surgeries like LASIK which are not covered by health insurance are going down over time. It's funny to me that you have no problem accepting that some people would take their Medicare money and blow it on something else, but you think that healthcare providers would not do anything to try to convince those people to spend their dollars with them.
Except if you go in for a major procedure, you don't know what you'll end up needing off that price list, and often, neither does your doctor. So even if providers were perfectly transparent about what a procedure would cost (and it's well-established they're not - just try calling and asking for prices) the nature of the service being purchased is that you sometimes don't know exactly what you're buying until it's too late to change providers.
A few years back I broke my leg and went to the hospital. Halfway through the process I was offered a couple of Vicodin, which I would later be billed $1,000 for. Was I supposed to haggle about them with that, or take my xray and hobble out down the street to someone who would sell me vicodin cheaper?
One of two things is going to happen here. One is I have a flat rate for a hospital visit, so the cost is known no matter what I need. Second, if I'm hitting my out of pocket max then that cost is also known.
>A few years back I broke my leg and went to the hospital. Halfway through the process I was offered a couple of Vicodin, which I would later be billed $1,000 for. Was I supposed to haggle about them with that, or take my xray and hobble out down the street to someone who would sell me vicodin cheaper?
The only reason they could get away with even pretending like they would charge you $1k for a vicodin is because of the distorted system we have where everyone pretends the money comes out of the insurance company's money instead of your own.
No.
It's not a "distortion". It's the inherent problem of trying to turn healthcare into a market. The dynamics of service delivery make it impossible for consumes to negotiate or compare prices in the manner necessary to have a functioning market.
I'd also note, that since I've never gone to any other healthcare institution with a broken leg, I have *no way to compare my experience to other providers. This is yet another way in that healthcare does not lend itself to market solutions.
In the midst of your one single incident, no, you would not have been able to negotiate the price of your vicodin. However, two things would change. First, they would not have offered you the vicodin without clearly informing you of the price if the norm was people paying out of pocket for most care. Second, if they charged $1k for vicodin but the urgent care down the street only charged $500, then basically no one is going to the first location. Rinse, repeat, until the prices are rational. So the cumulative effect of everyone paying out of their own pocket for most care is market-wide lower negotiated prices.
Even if they did, I made my decision based on which provider I thought was doing to do the best job... I didn't know at the point I made that choice whether I would need those vicodin, so they wouldn't have been part of my decision. And once I was checked in to the SF General Hospital (after two hours of waiting) I was definitely not going to hobble down the street, trying to compare prices on vicodin.
Also my damn leg was broken. It wasn't really the right moment to break out Google Sheets and create an expected value analysis of my various healthcare provider options.
It's nice to say "if only we had more agency, prices would be lower"... but it ignores the fact you still need risk pooling (insurance) unless you expect everyone to keep savings for the worst case scenario. And pretty quickly a risk pool means someone has to decide how much that pool should pay to help treat a particular injury... and you're back to where you started.
>And pretty quickly a risk pool means someone has to decide how much that pool should pay to help treat a particular injury... and you're back to where you started.
Not someone, EVERYONE. Each individual person must decide for themselves if they want to try pay a middle man insurance company some profit every time they get the sniffles or if they'd rather deal with that on their own, save money, and just get catastrophic coverage.
All of these things you're concerned about... we have an entire history of the healthcare industry before the New Deal where we saw how low healthcare prices were. We distorted the market with New Deal regulations putting caps on salaries, so companies started offering healthcare to employees. We can undo the damage done by the New Deal without getting all authoritarian about it.
Re your medicare proposal, are you suggesting that people who are diagnosed with cancer should get a cash check for the estimated value of the treatment? The incentive for fraud and graft in that kind of system would be incredible - lots of diagnoses are relatively subjective, and you'd be rewarding people for reporting every possible ailment they might be eligible for. If you're saying just give them their dollar average benefits, that pretty much defeats the whole purpose of having a risk pool.
It's very difficult to get quotes because no one is actually paying for it themselves. This would be solved immediately by empowering individual consumers.
>you can't easily compare providers (there's no obviously corpus of "ratings" from other prior customers)
This is because your insurance provider has chosen for you. Once again, this would be resolved by putting peoples' money back into their own hands.
>If you're saying just give them their dollar average benefits, that pretty much defeats the whole purpose of having a risk pool.
In my head I included still providing disaster coverage, but failed to type it. So that should alleviate your fears regarding things like getting cancer.
"Still providing disaster coverage"... is pretty much all of what health insurance does for people over 65. The annual spend on preventative care is dwarfed by a single common incident (fall, flu, cancer) at that age.
Here's a citation that shows emergency care is only 2% of all healthcare. Of course, that's the entire healthcare market, not just elderly care. I'd be interested in any citations you could provide that shows that system-wide preventative care is dwarfed by the system-wide costs of major incidents for the elderly.
http://www.politifact.com/truth-o-meter/statements/2013/oct/...
> I'd be interested in any citations you could provide that shows that system-wide preventative care is dwarfed by the system-wide costs of major incidents for the elderly.
95% of healthcare spend is reactive, 5% is preventative[0] Medical spending in the last three years before death accounts for 13.4 percent of aggregate US medical spending.[1] And this ignores major treatments for people over 65 that occur more than 3 years before they die (and on average, people live 20+ years after they turn 65.)
[0] http://www.newsweek.com/health-prevention-worth-money-86075
[1] https://meps.ahrq.gov/data_files/publications/st429/stat429....
You are acting as if paying out of pocket at a price not determined by an authoritarian central planner would suddenly mean nothing in healthcare would be regulated in any way and people would be getting healthcare from crackhead joe in the back alley.
Not everyone will pick the cheapest option all the time. Today there are free clinics in many places. Most people don't go to those. Some people will choose Wal-mart. Some people will choose Macy's. And there will be a myriad of options in between.
With regard to elective vs non-elective, only about 2% of all healthcare costs are categorized as emergency care. So there's plenty of wiggle room for people to shop around for a good price or wait for better market conditions.
What I would love to see is taking Medicare/Medicaid and instead of paying for healthcare services we just cut a check for cold hard cash to everyone who would've been receiving government funded care. Then they can spend that money on whatever they want. I guarantee you prices will drop through the floor. Some of those people will choose quality of life over longevity by going on vacation instead of paying for healthcare. I say good for them, do whatever you want it's none of my business.