> The free market does not work in all situations.

Sure, but you did not enumerate a single free market. I'd wager the US healthcare industry is far and away the most regulated market in the entire world. We know that regulation protects the big players at the expense of their would be competition and drives up profits. Colleges are hardly any better, and ISPs are nearly all monopolies granted by municipalities in exchange for kick backs of various sorts. The government has interfered with every industry in this list via direct/indirect regulation, grants, guaranteed loans, or tax incentives. Lets go ahead and throw in housing in our list, too.

From a European point of view I have a hard time understanding your opinion.

In other countries, regulated/public healthcare works better and is more efficient than your system, it's hard to deny it... I don't see how doubling down on cutting regulations would solve anything.

In a way it reminds me of the gun control issue: the idea that deregulating gun ownership and carrying will make everybody safer seems so absurd from abroad... I guess it's cultural.

Regulating a service and providing it at public expense are completely separate concepts.

Europeans do not have cheap healthcare as a result of price controls on private medical practices (regulation), but as a result of redistribution and subsidy (spending).

At least in France, it's both. The cost for the patient is usually low thanks to the health insurance, but also because of price control. A GP visit is 25 euros by law, covered from 70 to 100% depending on your insurance. Doctors can choose to charge more but then patients need better private insurances to be reimbursed.

You can find the price lists here:

* https://www.ameli.fr/paris/medecin/exercice-liberal/facturat... * https://www.ameli.fr/paris/medecin/exercice-liberal/facturat...

How many visits does it take to get a simple prescription?

We have something similar, I've been appointed consultations only to be asked how I felt.

You can get a simple prescription at the first consultation. For what I remember 10yrs ago, to see a specialist, you need to go to you general practitioner first. Then he will decide if you need a referral.

Edit: you can go directly to a specialist or not follow the « health path », you will just get less reimbursed. Some specialist can be seen without referral (gyn, psy...)

If doctors can choose to charge more to willing patients, that doesn't seem to actually be a price control. Perhaps 25 euros is the amount that the insurance system will reimburse?

The French system is fairly complex, it's not single payer. To sum up, for "everyday" health issues the public health insurance reimburses 70%. For grave long-term illnesses, you're covered 100%.

You're supposed to have a private health insurance (it's now mandatory for all employees) that reimburses the remaining 30% and all extra costs. That includes some dental and optical work, but also stuff like single-bed rooms in the hospital. Your additional private insurance also covers doctors charging more than the "official" price.

No, the per capita cost of healthcare in the US is astronomically greater than Western European countries, including both private and public spend. In the UK the NHS is a socialised service that is free at the point of use. If that's not 'regulation' then I don't know what is.

To regulate an industry is to make rules about how its participants may behave. This worlds away from government participating in the industry directly.

Public housing is a public service; rent control is regulation.

Public transit is a public service; fuel efficiency standards are regulation.

Medicare is a public service; the medical licensing regime is regulation.

It's not a regulation of a private industry. It's a law on the people to pay for public health. If we still want to call it a regulation then it's a regulation on individuals instead of the health business.

The argument is that although the U.S healthcare system - based off of some metric - underperforms compared to a system which makes no claim of being based on a free market, the U.S. healthcare is also not a free market by any means. Lightly regulated it is not.

Also, you combine "works better" and efficiency: This is slightly unheplful, as although (let's say) the NHS is very cost efficient is - however - not anywhere near as impressive when it comes to patient outcomes. I am not well-versed in the topic to provide a well thought out counterexample however I believe that the Swiss system would be a suitable example?

Comparing the deregulation of businesses with guns is fallacious if not ridiculous: However, being British etc, I do share your fears as to healthcare deregulation.

Europeans have cheap healthcare because most of the R&D is subsidized by the US paying list prices.

Europeans can spend such a huge amount (16% of govt budget vs 10% in the US) partially because the US is subsidizing their defense.

The US will eventually go to socialized medicine and then you will see the pace of medical advancement slow. Unfortunately it will be impossible to see because it is unknowable what would have been invented with a capitalist system.

An unregulated healthcare market, complete with all the benefits of the free market, was the rule in the US until the Pure Good and Drug Act of 1906. It's history is... entertaining.

An act which incidentally is credited as the most beneficial piece of US legislation to date in terms of addiction reduction and prevention.

Can you prove that the US healthcare industry is more regulated than countries like say, Germany or Canada? Because it would be incredibly hard to believe that somehow America is more regulated than countries that have more direct control over their healthcare.

I think that's exactly the point: direct control and heavy regulation are two different things.

This in-between fairyland with artificial barriers to entry on the frontend but no control on the back end is what's creating these captive markets where old companies to do almost anything because new companies can't join the market.

To add to that point, because the government guarantees things that it has no control over, it means the businesses in these industries have the best risk/reward ratio possible: no risk for unlimited upside, because the risk is taken care of by taxpayers.

I still think the way to go is to have a price index where if procedure X is available in (list of countries with good healthcare system) for $Y, then it should be illegal to charge more than $Y in the U.S. Have a central authority that manages the price index and the list of countries that we survey prices from. Then doctors and hospitals and pharmaceuticals couldn't all take advantage of the system by charging $500 for a fucking IV drip.

I believe Australia uses something similar, at least that's what I noticed while living & working there. Ex: https://www.health.nsw.gov.au/Hospitals/Going_To_hospital/co...

In the US there is the Surgery Center of Oklahoma which does something similar; I believe there are doctors in Oregon who do the same as well.

https://surgerycenterok.com/pricing/

> We know that regulation protects the big players at the expense of their would be competition and drives up profits.

You're describing poorly thought out or outright captured regulation.

Regulation is not defacto bad. There are plenty of regulations from the last 100 years all over the world that are demonstrably positive.

Three honest questions:

1. Is there a place that is deregulated enough that it can be used as an example?

2. If so, does that place significantly outperform all others?

3. If so, what holds back the people in more regulated areas from adopting that type of system?

Healthcare is not a free market. It’s a collection of cartels with price controls.

Things like healthcare networks were illegal before the Supreme Court redefined monopoly, and are now swallowing up healthcare delivery.

CVS essentially controls drug distribution.

The AMA is a trade guild that restricts the supply of doctors. A radiologist makes $1M a year because there are only a limited number of new ones minted each year.

ISPs are dangerous but nothing close to as awful as healthcare.

> The AMA is a trade guild that restricts the supply of doctors.

Technically the supply of doctors is throttled by residency programs, the numbers of which are determined by an incredibly weird dance between Congress and hospitals.

Your point stands, but just noting that simple monopolistic graft would be far more rational than how this actually works.

It’s not that “incredibly weird.” Medicare doesn’t reimburse for residents unless a teaching physician is also present. Because that dramatically limits hospitals’ incentives to train physicians, Medicare pays hospitals a certain amount to support training residents. To limit how much is paid under that program, the number of residents Medicare will pay for is capped.

It’s not irrational, but an example of how a series of government interventions, each seemingly rational on its own and aimed at reducing costs, can end up creating a systematic problem.

You're skipping past the congressional funding negotiations that set up those rules, and the motivations of hospitals to create the conditions supporting either funded or unfunded slots.

Sure, we can slice off portions of this process and explain the decisions of individuals, but there are so many players with motivations independent of the outcome it's not a clean line.

It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It's curious that they have the most government control.

They are also the three things that are socialized to a much higher degree in other developed countries, where they are not becoming exponentially more expensive.

I remember hearing from someone in the field that health care in Europe is indeed becoming exponentially more expensive. the exponent is smaller than the US, and the cost isn't borne by individuals, but they're still going to have a problem. (I don't have a source for this though.)

There's the aging population and that there are costs associated with improvements in modern medicine. If we save someone from the first expensive-to-treat thing that in the past would have killed them but the second (or third) thing does get them, they have two-to-three times the end of life medical costs. We're able to keep people alive longer, but it is costly.

At least in Australia, this is going to go one of two ways - either a user pays system or workers will have to contribute dramatically more tax (it's currently a flat 1%) to the healthcare system to look after people who are no longer working but costing the system a lot. I favour the latter, but the "fuck you, got mine" mentality is insidious and increasingly pervasive.

I'm curious about this thought experiment when people are discussing the pros and cons of user pays:

> Imagine that in 2019 someone invents a perfect artificial heart, which has zero risks or complications, reliably giving 5 or 10 extra years of life to typical elderly patients with heart issues. The downside is that it has to be made out of a giant diamond and so it costs $100 million. How do we decide who gets one?

The point is that somewhere down the line, as our opportunities to spend money on medicine grow and grow (which by itself is a good thing!), we have to come up with some way to draw the "user pays" line. It might be that people with a "fuck you got mine" attitude want to draw the line a lot lower than everyone else, but that's not the same thing as believing that the line exists at all.

It's an okay thought experiment but I don't think it's especially valuable when the reality is closer to "we take an additional 1-2% of your taxable income in return for people being confident that they can go to the hospital if they need to". Which is where we're at, not $100M hearts.

Of course there are issues with it. Government inefficiency, people taking up GP time when they don't need to, over-prescription pushed by drug reps as the government pays for it etc. But comparatively I think it's a small cost to pay for avoiding poor people dying because they can't afford to go to the hospital.

That is where we're at, but the word "exponential" makes me worry that it won't be where we're at for very long.

I think we're likely to cap out on a quality of life front before it becomes genuinely affordable. Bodies still break down over time, even if we're able to prolong lives a little through modern medicine.

My guess is the aging population.

Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning

"The Economy" is a (surprisingly effective!) system for allocating resources. It short-circuits a human instinct that social status and fairness should be the guide, and replaces that with "a persons economic contribution" instead.

Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much surplus stuff that everybody wins, even the unproductive. And, as a side benefit, everyone has an incentive to be productive.

The flip side is that Government is made up of ordinary people who often ask "what about fairness and status?", and likes to interfere to reallocate from productive people to unproductive people. In mild cases you get a healthy level of support for the disadvantaged, in extreme cases you get Venezuela. But in all cases, since the productive people are given less, they create less and there is less available to distribute. In theory this triggers the laws of supply-and-demand, reduces supply and prices increase.

The flip side is if the productive people consume their wealth instead of producing with it then we probably could tax them without any ill effects, but I think that is rarer than most people think.

This seems like an odd way of rationalizing the extreme concentration of wealth to the top along with growing poverty and lack of opportunity to climb the economic ladder.

Defining people in baskets like 'productive' and 'unproductive' is a fairly cold and callous way of looking at the plight of many Americans ranging from the poor to the elderly.

edit: Also to add onto my point: We've seen in America that people over time have grown more productive, yet wages have stagnated. If your theory was correct that productive Americans are allocated more resources, then presumably we should've seen the economy adjust accordingly.

Well, I actually believe that the constant money printing (eg, expressed in the US M2 Monetary Stock) has badly messed up the ability of the economy to recognise who is and isn't productive. The system is in real trouble and not working as I'd like it to.

But the question wasn't what America is doing wrong, the question was why government intervention always leads to price increases.

The market's notion of "value" is whacked. Feeding a starving poor person is not "valuable." Finding an excuse to decline insurance coverage to someone with cancer is extremely "valuable."

When the market says that one person is 1000x more productive than another, I'd take that with a 1000 kilo grain of salt unless I know the particular market sector to be sane by some other measure.

What is the "economic contribution" of, say, the average software developer versus the average first grade teacher?

Ignoring that your average first-grade teacher is an employee of the State rather than of any kind of private entity ...

... it's a question of ephemeral facts. In a given area, companies who employ software developers, able to retain personnel who perform to those companies' subjective satisfaction, by paying them $X; and analogously for private schools in the same area it is $Y for first-grade teachers. How does $X compare with $Y, today, yesterday, and in all the millions of possible tomorrows?

In other words: the beauty of the free market is that we don't have to answer those questions normatively/prescriptively in any one central place.

You can't brush away the misvaluation of teachers by blaming the state. Education is a public good. It's something with huge social value, but that value isn't and can't be captured by the educator. That's inherent in the activity. Capitalism only values something insofar as it can be directly exploited for personal profit.

> that value isn't and can't be captured by the educator.

Oh, but it is. Quality of education is clearly valued by parents. And depending on which school-district you live in, your property tax rate varies, and the quality of the local public schools correlates rather strongly.

While I don't have personal experience with this situation ... I can easily imagine that a good private school's elevator pitch would be something to the effect of "you and we are both located in $D1, which has cheap property taxes and questionable public schools; by living here you will pay less property tax over your adult life than you would by living in $D2; however, not only can our school make your kids smarter than $D2's acclaimed public-schools can, but we can do that without costing you more tuition than that lifetime-difference in property taxes."

> Capitalism only values something insofar as it can be directly exploited for personal profit.

Personal profit is precisely the best way to motivate humans to do anything that is valuable to society.

If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".

The point is that a sufficiently large part of the value of education is a non-excludable public good - i.e. it has huge collective benefits for society as a whole - that if you privatised the education system it would be extremely injurious to everyone. Of course, education also gives people, if you want to use that language, a certain amount of 'human capital' which tends towards a higher earning potential. But it is because so much of the value of education is a public good that it's misvalued, and necessarily so under capitalism.

Also: "If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".

As someone else mentioned, this is frighteningly sociopathic. But it's also ideologically blinkered. It's an elementary fact of anthropology that human societies for most of history have lived on a communal basis without property. People act from personal profit because of the structure and cultural sediment of capitalism, not because humans are inherently selfish.

> It's an elementary fact of anthropology that human societies for most of history have lived on a communal basis without property.

Interesting. I've assumed that primitive communities were run from the top down with the alpha male effectively owning everything.

I found this:

https://en.wikipedia.org/wiki/Primitive_communism

But it states:

> There is also no agreement among later scholars, including Marxists, on the historical extent, or longevity, of primitive communism.

>If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".

That is a sociopathic statement that ignores all of human morality, denies any human feeling of empathy or acts of kindness, and pretends culture does not exist. It is certainly the logic of modern capitalism though.

If you saw a child about to fall into a well, and nobody else was around, would you help her? Of course you would. When you are eating thanksgiving with your family, does the strongest member of the family steal the turkey and then charge everyone for pieces of it? What you are saying is patently ridiculous.

I read it more softly than that. Of course we get 'paid back' for making the Thanksgiving turkey - by goodwill. I'm paid for moral acts by a reinforced self-image and satisfaction. There are lots of forms of payment.

Right, but those feelings are the result of the culture you were raised in and the normal feelings of compassion you have as a member of a highly social species of animal. The whole reason society works at all is because I teach my kids to share, and not to hurt each other. If everyone starts believing that they should only do things out of pure self interest, then I'd say you're looking at a society that's about to degenerate into warfare, slavery, and violence.

Like every online multiplayer game!

> If you saw a child about to fall into a well, and nobody else was around, would you help her?

Are you comparing poor adults to children about to fall into a well?

"Everybody wins".

This is a sadistic logic. People dying because they can't afford healthcare. "Everybody wins". Living precariously from wageslip to wageslip. "Everybody wins". Internalising the toxic logic that one's worth is directly proportional to one's market value. "Everybody wins". Etcetera.

Several things:

1. If this were so it's strange how so many widely different forms of economic organisation, across the past and present - from post-war fordism in France to the state-owned enterprises in China today - have achieved remarkable levels of growth, stability and innovation. Economies are incredibly historically, sociologically and culturally varied and complex things. They cannot be reduced to a universal and parsimonious law.

2. What is of market value is not what is of social value. Even the most gooey-eyed neoclassical economist admits that a huge number of inefficiencies and distortions separate the two. Many thinkers - Rousseau, Marx, even Rawls - took them to be very far apart. A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything and to be grateful for the Promethean achievements of the rich, is not maximising social value. It's socially and culturally crippling.

3. You are naturalising a contingent and defeasible fact: that people need gratuitously large paychecks to have sufficient incentive to work. It's proven that above £28,000, increased income has no effect on quality of life. People want more money than that because capitalism, like any social system, functionally reproduces itself ideologically; and humans can be extraordinarily sensitive as to their social status and how others perceive them.

> This is a sadistic logic. People dying because they can't afford healthcare.

At some point everyone dies, and we know somewhere we run up against physical limits of what we can achieve. You'll need o be more specific about what your issue is here.

> Living precariously from wageslip to wageslip.

I've met people on $150,000 who manage to live paycheck to paycheck because they spend all their money in one go. You are probably referring to a real problem, but again maybe be more specific about what the actual problem is.

> Internalising the toxic logic that one's worth is directly proportional to one's market value.

It is impossible for everyone to simultaneously be 10x more productive than average, so I would _strongly_ advise anyone who thinks like this to pick a more achievable standard for measuring their self worth. But the choice of economic system does not determine anyone's mindset.

Several things 1)

Seems reasonable.

Several things 2)

> A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything

I mean realistically this is a value judgment so there is nothing to disagree on, but there are a lot of aspects here that are very negative. Clearly these workers are worth something, being humans, and nobody is seriously going to tell them otherwise. A lot of people are happy in their job, and realistically what is the actual problem with modern jobs? That workers have to turn up on time? That they have to be nice to people even if they don't feel like it? There are some horror stories that come out of retail, but they are caused by bad behavior of customers, not by the economic system.

I've seen a lot of people with lousy jobs who really struggle through life, but often the actual problem is something that is strictly in their personal life. I'm not sympathetic to the idea that somehow because workers don't understand the importance of what they do that they are therefore wasting time.

Several things 3)

> It's proven that above £28,000, increased income has no effect on quality of life

I'm not really familiar with the income and expense situation in the UK so I'll not try to talk about it. I would suggest that once you get beyond lifestyle expenses there are a lot of things that the wealthy do with their money that have nothing to do with their short term quality of life (like investment, or supporting family members or close friends).

Some examples other than what people have already mentioned:

Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor can even legally sell their alternative, so the drug company can literally charge whatever they want.

Building codes. In my grandparents' day, it was still possible to construct your own house: you bought a plot of land, hired a concrete mixer to come pour the foundation, bought a lot of 2x4s, and spent a bunch of time hammering & sawing. Now, you have to conform to all of the local building codes (which in the Bay Area, I've heard, is an 800-page tome), and you need to get approval for every feature of the design from the city building inspector, who has the power to completely block your construction if you get on his shit list. As a result, the only people who can build housing are ones who have good relationships with the city and the know-how to adhere closely to all the building codes.

Zoning. Even if you have that know-how and relationships, there are some things you just can't do with housing. Own a 1/4 acre with a single family home and want to convert it to a 4-plex? Too bad, it's not zoned for that.

And you can see the economic impact of all of these by looking at situations where they're absent. Consider generic drugs: once a generic has been approved, the price of a drug can fall by 90% or more. Or compare housing in the Houston metro area, where you can get a 3BR2BA for under $200K, to the Bay Area, where the same house will set you back $2M.

"In my grandparents' day, it was still possible to construct your own house: you bought a plot of land, hired a concrete mixer to come pour the foundation, bought a lot of 2x4s, and spent a bunch of time hammering & sawing."

It still is. And here in rural Alabama, I have the electrical wiring to show for it.

> Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor can even legally sell their alternative, so the drug company can literally charge whatever they want.

You think that's government control? Most countries have the government negotiating prices on behalf of it's citizens in a very "take it or leave it" manner. Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.

Those much stronger government controls produce better (cheaper and universal) outcomes.

Pharmaceuticals is a tricky example, because the marginal cost of producing them is extremely low. Having the government control negotiate the price of, say, automobiles, might have weirder results.

> Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.

I believe in the US it's actually illegal for a pharmacist to recommend a generic, if the doc didn't check the right box. Maybe just decriminalizing it would have a nice impact :p

that's backwards. pharmacists are required by health plans or by law in some states to dispense generics (not "offer," dispense, i.e. if I bring in a script written for AMBIEN 10mg, I'm getting zolpidem 10mg without asking) unless the doctor insists on a name brand.

I feel like I heard my wrong version in an article about EpiPens. Is it different for devices maybe?

the first generic EpiPens were just approved a month ago, I don't know if they're widely available yet. if for now some plan formularies only have name-brand injectors on them, some people with insurance could potentially pay less for the brand than the generic until that changes. otherwise, the same substitution allowances and requirements should apply.

EpiPens aren't really medical devices, it's just a drug with a specialized route of administration. it's not any different from an inhaler, a nasal spray bottle, an eyedrop bottle, etc., from a dispensing point of view.

EDIT: it's true that pharmacists aren't always allowed to tell patients when they could save money by buying a generic and paying out of pocket rather than buying a more expensive name brand and paying their share of the full price with insurance. that may be what you heard.

You still can build a house that way, building to code is not hard, it only becomes any sort of problem once you start doing crazy shit like open spans 20 foot wide or vaulted ceilings, and even then, there are simple standards for most of that too, which is why the building codes are so extensive. With a couple months of work or training anybody could build a house to code by themselves without a problem. The only real consideration for not doing it yourself is your speed. Some guy that frames all day every day is going to get that job done multiple times faster from practice and have more than all the tools for anything they will encounter, but if you have the time and can swing a hammer then you can do it.

College administration costs have been expanding rapidly over the previous decades. Part of that could be attributed to federal mandates, e.g. everything to do with investigating/achieving Title IX compliance is the result of government regulation and probably wouldn’t exist in an unrestricted free market.

Accreditation is also related to government and can require colleges spend money on things they might not have 50 years ago.

I suspect the biggest cost driver is federally-backed student loans though. When you’re paying with what seems like free money it’s a lot harder to control costs. If students run out of money and drop out of your school, that’s a bigger driver to keep costs down.

It’s pretty simple. Both regulation and guarantees reduce competition in certain elements. Example: colleges no longer have to compete on pricing because students no longer have to save to go to college. The loans are easy to get and colleges are guaranteed on payment. Due to this, pricing competition because much less of a concern for colleges.

When you subsidize industries they no longer attempt to contain costs. Unintuitively, instead of getting cheaper they get more expensive. There's an interesting video by Peter Schiff on the subject: https://youtu.be/AIcfMMVcYZg

IMO, it has less to do with government control per se, and more to do with someone paying for it.

Insurance pays for healthcare -> patients care less about how much it costs -> healthcare costs mysteriously rise

Government/lenders pay for school -> students care less about how much it costs -> education costs mysteriously rise

One data point on public works construction, the Davis-Bacon act and "prevailing wages".

https://www.forbes.com/sites/timworstall/2016/08/31/union-wa...

How is this not explained by correlation? It makes sense that important things are both expensive and regulated.

Besides, isn't this terribly cherry picked? Sewage is a government issue and you don't talk about runaway costs there.

Talk to the folks in Jefferson Co. AL, facing $200 a month sewer bills after a botched upgrade.

First it’s generally half that 200$ per month. Second, “six of Jefferson County's former commissioners had been found guilty of corruption for accepting the bribes, along with 15 other officials”

But yes, if you look for the absolute worst 0.05% you will find problems.

Seattle's power, sewer, and water bills are all growing much higher than inflation; have been for at least a decade; and are going to continue at this pace for the foreseeable future.

A better view would focus what kind of government control. Are we talking about a government where legislators are entirely and exclusively dependent on the votes of their constituents? Or are we talking about a government that merely presents the facade of a democracy while actually being dominated by corrupt cartels who use its power to extract rents and squash competition?

Because I promise you, "government" behaves very differently in these two situations.

Of course, that's not all they have in common. Being difficult to automate, they are vulnerable to Baumol's cost disease.

Healthcare in America is one of the least free markets in the country.

https://www.vox.com/policy-and-politics/2018/7/31/17629526/m...

I don't see a statistic or actual citation there other than an issue with potentially out of date laws.

How are you quantifying American Healthcare as being one of the least free markets? And how does it compare to other countries? I don't see anyone ever actually quantify how 'free' a market is; people only ever argue that if a market is not working therefore it's not free enough, which means we must make it free.

At what point are we going to stop and realize sometimes it just doesn't work? Especially for issues that result in the death of Americans?

In a simple example of a free market a consumer could select a provider based on prices they advertize.

With the exisitng and prevalaent fee-for-service healthcare this 'fee' is not the price. It's different even functionally, where the 'price' is what's expected to be advertized upfront, the 'fee' is what gets billed afterwards. Has anyone tried to ask a doctor's office or a hospital if they could refer you to a price-list for the range of services they provide? If you're lucky, you'd be referred to Medicare regulated pricing, yet it's not even a baseline. I'm not even going into the 'flavors' of the fees formuated to different insurers, ??patients.

While there're rationalizations for such pricing approach, by itself it limits consumer's ability to be an active agent in free market. In healthcare the consumer is treated more like a resource.

Sure - in America, healthcare is far from a free market because:

1) We don’t pay our own healthcare bills, we pay for our healthcare through insurance. As a result, there isn’t a pricing system in place, much like there is for other critical goods and services with price-inelastic demand like food and housing. This is caused by regulations that require employers to provide health insurance for their employees, and most recently the mandate that requires individuals to purchase insurance. We’ve essentially forced a world in which insurance is the only way one can pay for healthcare.

2) Our healthcare supply is artificially limited, which forces higher up prices. The MRI “certificate of need” is one such example, there are countless others. Medical licensure, in general, drives up the price to see just a primary care physician. In the US, just becoming a basic physician that prescribes antibiotics takes at least 8 years of expensive schooling. As a result, doctors in America earn more than their counterparts in every other country (adjusted for PPP)[1].

There are a couple solutions that the market can bring about. One of them is to get rid of the employer mandate. The fact that I have to worry about losing my insurance if I get fired or leave my job is totally bonkers. I don’t have to worry about that at all with my car insurance, it’s a cheap monthly premium that adds on to my cost of living, just like my monthly food expenses or my shelter expenses (read: rent). The reason why non-employer provided healthcare is more expensive is that the pool of people buying that type of insurance is much smaller than the pool of people that are happily receiving their employer-provided health insurance. If every single one of these employees participated in the same insurance market as those that are either unemployed or self-employed, premiums can come down.

The other solution is cut out insurance for most healthcare. We don’t use car insurance to pay for oil changes and servicing, we only use it to pay for catastrophic accidents. Absent the regulations we have today, the market might look the same for healthcare: you pay out of pocket for basic healthcare like going to the doctor when you’re sick or other preventative care (sort of like an oil change for your body). Insurance might kick in when you get cancer or heart disease. I come from India, where it costs about Rs. 500 out of pocket to see a good doctor that has an MBBS. This is the price of a movie ticket, in India. The concept of using insurance to pay for such care is unheard of. In America, paying for a general checkup, without insurance, can cost $300 out of pocket - absolutely absurd.

Singapore is a great example of a country that has a largely market driven healthcare system. Unless you’re poor, you pay out of pocket for all healthcare, in a private market. The government steps in and pays for healthcare for poor people, and for catastrophic care (think: universal high deductible healthcare plans).

[1] https://economix.blogs.nytimes.com/2009/07/15/how-much-do-do...

The other big cost is supply control by the AMA and other physicians associations. In other countries, being a Dr is a prestigious job, but not one that often pays mid-six figures. It's going to be challenging to get into a new, cheaper system without fighting the existing population of well-compensated physicians.

I believe you are asserting that you are claiming that medical care in the US is more expensive because there area restricted number of doctors. The US has roughly 2.3 pretty 1000 people; the "High income OECD countries average" was 2.86, which seems comparable, especially since small countries necessarily have more per capita.

Exactly this. In Germany the private insurance is actually cheaper than the public one, you can purchase private on the top of public and so on. As a result of a much freer market the prices are much lower.

> In Germany the private insurance is actually cheaper than the public one

Well, the public insurance is a percentage of your income. The private one is based on many opaque factors. Private cheaper than public would be a more than a stretch without appropriate qualifiers.

Sure, in my situation this is the case. I am not sure about others or how much percentage of the population has the same situation.

And what exactly does this private insurance cover? In Poland private healthcare is fine for healthy young people that occasionally catch a cold, or have their ankle sprinkled, because it saves a lot of wait time.

Treating any serious illness (think heart attack, cancer, diabeties, etc.) is either insanely expensive or not covered at all by private insurers, so public health care is your only chance here.

Your fourth paragraph describes the US prior to the 70s and 80s and the HMO (https://en.wikipedia.org/wiki/Health_maintenance_organizatio...).

What happens is that no one visits the doctor for preventative care, with the result that many cases were not diagnosed until it was very expensive to treat. (Have you had your blood pressure checked recently?)

In practice, Erlichmann was right about HMOs.

I'm not so sure about that. I never go to the doctor and I have good insurance. Yet the local ER waiting room is full of people with sore throats and no apparent ability to pay for the services they are there to receive.

I asked for an actual quantifier of how much of a 'free market' something is. That's the whole crux of my debate: In attempt to make something more of a 'free market' we cut regulations, which ends up hurting people and which companies take advantage of. Then prices go up, we assume the free market is not free enough, so we cut more regulations. Repeat until people are dying.

A great example of such an issue is one where it was literally impossible for my parents to get any sort of healthcare because it was deemed that they had a pre-existing condition. No insurance provider would bother with them.

And for a lot of Americans paying anything for out of pocket care is impossible. My parents couldn't afford a movie ticket due to the poverty they're in, let alone the price of generic drugs for the myriad of medical issues they're going through. You keep bringing up the example of Singapore which works...but they also have a public option. We're not even to that point yet and making some of these radical changes without care to the poorest of Americans will lead to disaster.

When you say: "we cut regulations, which ends up hurting people and which companies take advantage of"

Think of this: Companies take advantage when no other company is around to out compete them. This is why it's so important not to erect high barriers to entry around a market.

Instead, we have a lack of competition in health care in detail, throughout the whole industry. The reasons have to do with history. Its more important to see the general principles first.

Principle: If you would like to regulate a market to "fix" something about it, there will be down stream ramifications that will later necessitate the regulating of something else - as various entities react to the original regulation so as to maximize their own well being.

Case in point: price and wage controls in WW2 induced companies to start adding incentives instead of salary raises for workers. Which incentives? Health insurance was a big one. Companies needed to step up production. The government errected wage controls "for the war effort" - so companies enticed employees to work more via other means.

Immediate consequence: Separation of payer and receiver of healthcare services. (I am assuming this is clear enough - the insurance pays for the service, the sick person receives the service, the doctor or other provider provides the service. Now there are 3 actors where before there were 2)

Long term effect: Healthcare is expensive because the person receiving the service and the entity paying for it have been separated since the widespread adoption of health insurance "for everything" in the later 20th century. This distorts the perceived costs, allowing health care provider to increase costs without driving down demand directly. Instead, the insurance company is on the hook, and "I" can go to the doctor with greater frequency without commensurate increase in my expenditures. Cue the expansion of the healthcare industry, and a general rise in the _price_ of health care over time.

Long_term_response: health insurance companies hedge their bets and get into bed with "big medicine" and "big pharma". The health care industrial complex is born.

Longer_term_response: Long term rising costs finally induce broad measures to reduce the quality of service and make it more difficult to obtain service. Doctors are exchanged for nurse practitioners. Large companies make their health plans less and less attractive every year. The health care market enters a malaise.*

Summary thesis: Without clear price signals, a market becomes more and more distorted over time. People looking at "a snapshot" in time see a malfunctioning market, and ask for more regulation since "clearly, something is wrong". This tends to induce further distortions, and further calls for top down fixes. The few (the industry titans, and the doctors) benefit at the expense of the many in this system. To unwind this system, there is great risk of making things worse, as predatory situations will appear as the regulations are relaxed in an environment that has been specially adapted for them - people are vulnerable since the market is not functioning and a regulatory decrease is an exogenous step.

Importantly, It's not that I, or free market people in general don't sympathize with people caught up in this situation. (We are caught up in it too! Most people are not tycoons) The (a) problem is that free market people sometimes call for immediate cuts in regulation - which are quite often unsafe. A general understanding of the situation is needed. -What is needed is a free market system, but a return to that system must be done in a smooth and safe manner. Unfortunately politicians have no incentive to pave the way to this in dollars. Instead, "the right" will cut regulation where it aids the medico-industrial complex, while quietly ensuring their asses are covered and their regulatory capture will reamin quasi-permanent, and the left will regulate to "fix that via a safety net for those on the bottom". In the end, the high and mighty will continue winning, since the tycoons are safe thanks to regulatory capture, especially with the masses placated with a safety net. And the malaise will only grow worse, and more confusing.

Side points: -Some responses might be perceived as bad or good, but they are just responses - intelligent actors responding to a situation. In any economic situation, action and reaction, history and future - all must be considered in order to pass an intelligent value judgement. Hasty proclamations motivated by emotion are likely to miss important aspects of an economic trajectory - of economic dynamics.

-There is a duality in your argument, as in all things in economics. If you don't see this, then the politicians will have you.

-About the call for a "an actual quantifier of how much of a 'free market' something is": What kind of quantifier do you want? An objective measure? But surely you must know that any particular measure must be invariant to various kinds of hidden change in order to be objective - and nobody knows how to produce an economic measure that is really objective. This is why econometrics contains so much bickering over ad-hoc modeling and so many statistically based papers (across empirical fields which measure human subjects) have results that are hard to re-produce. I am sure some clever quantifiers have been invented, but when you do not even know the basic interplay of the dynamics, over-focus on some number -even if it is a good measure- is not helpful - since you cannot understand how good it really is unless you have the underlying processes well understood. If you argue that a different process is actually more important, then perhaps your "good number" may actually be bad.

Companies also take advantage of information disparities. I havea hard enough time finding a decent contractor and I'm capable of putting my own roof on.

Singapore’s public option is for poor people. We have that also, it’s called Medicaid.

I have a high deductible plan where I’m liable for the first $5k. That didn’t reduce any costs, nor can I get a price to shop around.

Our healthcare system is not a free market. Insurance companies are forbidden to discriminate premiums on the #1 killer in America: obesity.

Except for Singapore:

https://www.nytimes.com/2017/10/02/upshot/what-makes-singapo...

Doesn't seem like it.

> Initially, Singapore let hospitals compete more, believing that the free market would bring down costs. But when hospitals competed, they did so by buying new technology, offering expensive services, paying more for doctors, decreasing services to lower-class wards, and focusing more on A-class wards. This led to increased spending.

hmm... increased spending does not mean higher costs. It could mean higher costs, or it could mean flat or declining costs and a lower profit margin, which is a good thing.

Sounds just like the US healthcare and education systems.

If you read the article, Singapore is far from a 'free market' and easily has more government oversight than here in America.

They actually have public and private options competing for benefits, regulating salaries and hospitals and more. If you were to argue for a public option to health insurance or more regulations against hospitals, you'd be called a crazy socialist here.

I can understand the argument you're trying to make, but it's incredibly sloppy to call the healthcare system we have in America 'the free market'.