Labour can be similar, depending on how the economy is organised. If you need a job in order to eat, then you can't freely reject a job offer. Only for fairly wealthy people is the labour a free market. Unless you get a good social security system (welfare, UBI, etc). Then people may be able to walk away from a bad job offer.
Low unemployment is also making the labour market behave more like a free market; there are other jobs available, and employers can't rely anymore on job seekers being desperate for a job.
For routine primary care like regular checkups or an appointment for some symptom bothering you, you absolutely are not under duress. You won't die because you took 5 minutes to choose a doctor on ZocDoc. With more transparency in costs of service, this could definitely become a market, ie "for $XX per month, get unlimited visits to our partner doctors' offices".
For emergency situations, surgeries, and things that require expensive ongoing care like cancer, you're correct in that you're under duress and can't really shop around. This is the market in which the usage of insurance makes sense, as it's a rare occurrence that would be catastrophic to pay for out of pocket for the majority of people.
I think we can do a great deal to lower cost of healthcare to Americans if we think of it in this two market approach, and handle each accordingly.
I'm ready to vote for forced transparency at all levels. I'm tired of this opaque negotiated pricing with insurance companies that manages to maximize my out-of-pocket costs.
You are correct that non-emergent care is a WAY bigger market than emergent. Most people completely ignore this. Chronic conditions like diabetes and Crohn's, end-of-life care (hospice, assisted living), dialysis, smoking cessation and weight loss, blood transfusions, most flavors of oncology (cancer treatment), knee replacements, etc.
We need way more cost discipline in non-emergent situations. Changing the perception that all care is emergent might be the single biggest thing we could do to lower healthcare costs. It would let people see that there should indeed be a market in everything from X-rays to MRIs and we could finally have a sensible conversation about cost.
My optometrist wants me to try a new kind of contact lens. She cannot (or will not) tell me what they will cost. She can't tell me what they would cost me personally because she just doesn't know - all they can do is send a bill to my insurance company and find out how much they pass on to me. Which is essentially asking me to write a blank check. Nor can she tell me the sticker price on these contacts so that I can at least know the upper bound, because she simply does not have (easy?) access to that information - the billing department does. Probably I'll stick with the same brand I've been using for years, because at least there I can safely assume they'll cost about the same now as they did last year.
Similar story for my doctor offering me a flu shot while I was getting a checkup. She couldn't tell me the price, she didn't know the price, she couldn't get access to the price, etc. I usually go to the pharmacy, where they bill $30 and insurance covers it all. So I figured, "How bad can it be? And it'll save me some time," and let her give me the flu shot. Big mistake - the doctor's office billed $300, insurance (quite reasonably, TBH) only agreed to cover a portion of it, and I got stuck with a $200 bill.
There's two problems there. One is the lack of price transparency. The other, though, is the prevailing attitude - in both cases, the doctor's opinion, which I think is most everyone else's opinion, too, was, "Who cares what it costs? If the insurance covers it, it's basically free to you." Which just ain't true, especially for routine care stuff like this. The insurance company isn't getting their funds from some magical fountain of money. From a "see the forest not the trees" perspective, they will have to pass every cent of these costs (and more) on to me.
Both of these problems are solvable.
At the end of the checkup, a front-office staffer went on to Delta Dental’s web site, pulled up my record, and requested a treatment estimate. The answer was returned within a minute.
A few days later, I got a copy of the estimate in the mail for my records. I didn’t have any other dental events (which might’ve affected the estimate), so on the day of the filling, I paid the amount as part of the office visit. A few days later, I got the Explanation of Benefits for the procedure, confirming the amount paid was correct.
If I had chosen to, then I would’ve gotten all that over the web instead of on paper.
As far as I’m concerned, the dentist’s office is where I want them to be, in terms of billing processes. My eye doctor is able to do something similar, looking up lens & frame benefits etc. on computer, no I don’t have to be billed after the fact.
Charging 200$ for you to be healthy and able to work the full season while also avoiding being a carrier of a disease is absolutely terrible.
Springing costs on you that you never agreed to and aren't covered, should be illegal. you're literally being forced into a transaction you never agreed to.
My optometrist wanted me to as well. When I wasn't sure, he was nice enough to offer a prescription for both, so I could make the choice later.
That obviously doesn't work in every case of unknown cost, and doesn't really change your point, but I thought it was worth pointing out as a nice tip for anyone in the same situation in the future.
It's something I've seen in other comments here in the past, too.
In the US, only about 5% of healthcare expenditures are for emergency care. That means there is huge opportunity for people to shop around. The problem in the US is that there's no actual healthcare market, so shopping is impossible. No prices are displayed so customers can't make informed decisions, most areas are operating under healthcare monopolies, and most areas enforce a perverse set of laws that make it difficult for competition to enter the market.
Emergency care and care for the truly poor is handled with a different process.
It's like a restaurant that doesn't tell you the prices until after you've eaten, except it's the only way to get food.
Yes, there will remain distortions in the healthcare market, but at least there would be a way for people to make informed decisions.
Yet somehow in the US there is a market in food. And it is gigantic with way more options than most other places.
The food market is obviously not free because you need to eat. The car market is not free because a lot of people need to drive to work. The plumbing market is not free because sanitation is essential.
I won’t comment on the relative effectiveness of free vs centrally planned economies, just pointing out the logical fallacy above.
Healthcare isn't a "free market" because of massive information asymmetry (detailed prices for services, consumer education needed to evaluate information), high barrier to competition, and of course the literal product being your life.
Whereas cars are much closer to a free market. Sure, you might need to drive to work, or you can take a bus or other public transportation, ride a bike, walk, move closer or to another area somewhere this is easier to do, find a job that lets you work from home, etc.
If you choose to buy a car you can gather tons of information, pick a product to fit your specific budget, and end up with something that works everywhere. You can sell the product in the future. Contrast this with healthcare where you can't generally evaluate the information, have minimal to no pricing choices (especially in certain time sensitive situations), etc.
How do they seek out the "best place" if they don't have complete information on what it will cost? It would be like buying cars with no price-tags or MRSPs - yes, there will be good/prestigious dealerships with excellent staff who can tell you the technical details about the car that's right for you, but you won't know how much it will cost you until each component manufacturer sends you their separate itemized bills for months after taking possession of the car, and you can't take the car back (5x tires, 2x wipers, 1x engine, dealership charges, factory charges, line-assembly person 30 minutes @union rates, 1x battery, 348x bolts,1x suspension platform, transmission, etc). That is not a free market.
I am sure I could find a better deal on many medical purchases, but the cost to find them is significant. Purchasing the default/readily-available option is often the best bet because of the hours or days required to find a better solution. Spending a few hours to save $100 or a few days to save $1000 is a clear loss to me.
Cars are another extremely complicated product. Society has self-organized to create reputable sources of information on the quality of different models.
We don't need government restrictions and monopolization of spending to manage the complexity of the economy. Healthcare faces severe problems because of governemnt intervention, not despite of it.
With jobs, people with ample financial reserves can afford to shop around, but people who live paycheck to paycheck can't.
With food, well, it depends on how many different places sell food. Fortunately, there's usually no shortage of shops selling food. The market for expensive food is absolutely free, because I can say no and eat something cheap instead. But the market for cheap food does indeed not behave like a normal free market, as any economist can tell you: when prices for the cheapest foods go up, people will actually buy more, because they won't be able to afford more expensive food. And if one company had a monopoly on all food and set prices for all food high, it would not be a free market anymore, though that's true for any monopoly. Still, if it were a monopoly on something non-essential, people could still say no.
A free market requires competition. When no competition is possible, there's no free market. When there's an army of unemployed people desperately hunting for jobs, companies can afford to be picky and underpay them; there's no meaningful competition to hire those people, who can't afford to say no, because the only alternative for them is to be unemployed. This can lead to a situation where even people with a job have trouble making ends meet.
Yes, that’s a principle that’s important. It’s not the sole determinant of all economic systems. They are more complex than that.
This doesn't apply to things like healthcare as others have mentioned, but also education (people are told their whole lives that they need to go to a good college, so people often make the poor financial choice to attend the better school), and in many cases housing (not wanting or able to leave the community they have only known, so they are willing to rent burden themselves in order to live somewhere).
Add on the fact that many of these things aren't as standard and transferable and you notice why these are the major markets that experience serious distortions in both a free market and a highly regulated one.
Do you have any links to books or articles that go into this idea in more depth? It definitely feels true, especially in how oversimplified economic theories are presented to laymen.
You get the rust belt because there has been a massive change of the American economy from manufacturing to high end service (finance, law, management, design). People can and should move to where opportunity is, America is and always should by a dynamic country of immigrants that move to where the economic opportunity is at the moment.
You are also ignoring the contributions such immigrants make to the broader economy by inventing, building, and hell, just using their salaries to buy things. We are stronger when we take the labor of or competition and put it to efficient use.
If you’re really concerned about wage increases for employees you need to focus on the imbalance of power we have as employers. I make hiring decisions every month, and I can tell you, as much as this is the best job market in a generation, and employees have the best bargaining position they’ve had in a long time, our company has way more power than any one employee.
And that is trivially easy to game atm as the government isn't enforcing it. We've all seen the job postings where companies are asking for X number of years of experience in a technology that has only existed for X-n years, or a combination of skills that would command high salary but they are only offering market rate or below.
>Further, H1B sponsorship costs money and commitment to the applicant and government, so hiring an H1B is actually more expensive than domestic candidates.
More expensive to the employer != increased wages. Why didn't the company just add that cost to the salary instead and hire locally? Because having captive workers is worth something to them.
The problem with H1bs isn't that they are immigrants, the problem is that they are not free to easily move around employers due to the terms of the visa, and the path to the green card that would give them freedom is also constrained. Personally I think that if a company has successfully argued that the American population can't supply someone to do the job and we need to import someone. That immigrant should be free to work at any company in the US since apparently the whole country could use them, and adding people to the country affects us all. Tieing them to one company is just indentured servitude with extra steps and let's a single company capture the value while putting a ton of the costs on to the nation
Anyway my main point was that you can be talking in a thread about supply and demand and say that increasing supply doesn't put a downward pressure on price, in this case salary. It may not be enough to move the needle if there's enough unmet demand and a price ceiling for whatever reason, but it is a downward pressure
Companies don’t push the cost of H1B processing to other candidates because those candidates aren’t suitable for the job. My point is that it’s hard to argue that employers are hiring H1B immigrants to depress wages when they cost more than the equivalent domestic employee would; assuming there were such a candidate.
Your argument that more people coming to an area puts downward pressure on wages isn’t consistent with domestic migration. Americans move internally all the time. If you look at the fastest growing cities or states, their wages aren’t dropping as more people move in. In fact the increasing population drives inflation as more people bid for housing and food etc, and that inflation flows through to wages as employees demand higher salaries to cover the cost of living.
I don’t see anyone arguing that people from Ohio or Alabama shouldn’t be allowed to move to NYC because they will lower wages for New Yorkers.
We live in an economy that is based on growth; a growing population (even if through immigration) can in fact drive economic growth.
To be clear I am not saying immigration always promotes growth or is always good. There are challenges. But I thing the gut reaction that it costs locals jobs and lowers wages is nonsense when you look at the evidence, and accurately model the economy.
No one is arguing that people from Ohio or Alabama shouldn't be allowed to move to NYC because those people are still allowed to move around. The H1b visa ties workers to companies and gets rid of the free part of the free market. I don't care that immigrants come in and work if we don't have the people to do the job here. I care that companies are lying about how hard they looked or the wage they pay, and then getting indentured servants.
The companies are extracting value from society without giving back.
In the case of H1B, we are talking about Highly Skilled individuals that are scarce by global standards. Basically the supply of highly skilled employees is less than the demand, even with current levels of immigration.
A similar thought experiment: if you build more apartments in NYC, the price won’t necessarily go down because the demand is massive and increasing; it would take a lot of apartments to lower prices in NYC.
While I agree that employers should raise wages, I disagree that things are that simple or that economists are generally being paid to lie to people about it.
It's a question of how much the supply of the thing we are talking about will go up when people are willing to pay more for it. If you choose the example of housing in San Francisco, it is clear that it takes more than just people being willing to pay more for something in order for the supply to increase.
Barring physical constraints and local laws, that would also likely spur more building to increase actual units. That isn't likely to happen to any large degree because there are physical constraints and laws, and that's probably what you were thinking of.
I don't think this is true unless you really contort what the definition of an economist is. Most economists either aren't working on issues that are particularly political at the moment or aren't in a position of influence if they are. Economists have political opinions, sure, but I don't see much evidence that this has a strong effect on their views about how the economy functions.
This is economics 101 - supply and demand. What everyone learns in their first course in economics. But most economists are paid to espouse a political perspective, so most choose to ignore it. Paraphrasing sinclair : When your salary depends on you not knowing something, you magically don't know something.
> - train people more. You hire them at lower qualifications, and educate them in house
When you prevent out sourcing, h1b visas, hiring illegals, etc, it forces local companies to invest in the local population. And it's not just at the company level. The reason we have a public education system, highways, public transportation is because the private sector needed literate workers and the ability to transport workers and goods. So companies put pressure on the government to provide education for the masses, build highways, public transportation, etc. Amazing what can be accomplished when private+public interests are aligned. When they aren't aligned, you get the rust belt, increasing wealth inequality and continued societal breakdown ( opioid crisis, late family creation, distrust between people and distrust of government, etc ).