We like to talk about healthcare like it's a free market but it's not. If I'm at the hospital I'm there for treatment. I'm not leaving until I get it, damn the cost. I will not consume less healthcare because the price is higher when the other option is death.

We need some price setting regulation to protect consumers from getting fleeced. When the hospital knows that I'm going to say yes, why not price every surgery at $100k?

We've tried letting the insurance companies regulate the price, but they've proven themselves incapable either because there are so many secrets making the market not fair or because they don't have an incentive. It is time to try something else. The government is our mechanism for regulation. Let's use it.

> We like to talk about healthcare like it's a free market but it's not.

Emergency medical care isn't.

But most other things are.

It should be possible to shop around for imaging and testing services. The regular "family doctor" is something families can (or at least should) be able to choose at will.

Heck people shop dentists all the time. They shop physical therapists, and even mental health providers.

If all the local X-Ray providers near me publish their prices online the fact is prices will drop, and that will likely carry over to what price is paid during emergency services as well. It will be hard to charge someone 5k for an X-Ray in the same imaging center that has a price of $120 listed on their website!

In Australia elective procedures on medicare are much more limited or not covered at all. A system can start by just covering the most essential and required care, then later expand to additional things.

My insurance company calls me after I schedule a service like lab/imaging to tell me of cheaper options. My doctors are attached to professional building at big local hospital chain, so I usually just go there because it’s easy, I know my way around, they are on same IT platform so I don’t have to chase down results, or long term they have all my medical history localized. Due to being attached to hospital though, cost of MRI for example is usually 10x versus competition. I still don’t care, because I have insurance and have no incentive to reduce the cost.

So if you want to make people price shop, it has to be coming out of their pockets for it to work. Dentists, PT, etc that you listed have much higher rates of cash/self pay.

You're describing inelasticity of demand, which has nothing to do with whether or not a market is free in the economic sense (that is, whether supplier competition and consumer substitution are possible). It's also incorrect to pretend that all healthcare goods have the same elasticity of demand, as well as to pretend that even emergency healthcare is perfectly inelastic.

The reason this matters is that we don't see the same problems in other inelastic markets - for example, automotive gasoline is highly inelastic (estimated to be at -0.02 - https://www.eia.gov/todayinenergy/detail.php?id=19191), but we don't have the same pricing pathology with it that we do with healthcare (emergency healthcare estimated to be at -0.04 - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5600717/). Therefore, we can't conclude that the problems are specifically due to inelasticity.

> You're describing inelasticity of demand, which has nothing to do with whether or not a market is free in the economic sense (that is, whether supplier competition and consumer substitution are possible)

Next time when a bone in broken in your body, go comparison shopping because it's a free market and you should get the best deal while your bones hang freely.

Health care is a special case not comparable with any other market.

> Next time when a bone in broken in your body, go comparison shopping because it's a free market and you should get the best deal while your bones hang freely.

Or already know the price of how much it costs to get a bone set at different local providers and make your pick ahead of time.

Why assume people aren't going to shop around until something happens? "Hey ambulance driver, my preferred clinic is such and such take me there please."

Most medical situations are non-emergency.

Would you keep a mental record of every service at hospitals? Seems like a gigantic waste of effort for everyone to have to know that a bone fracture is cheapest at hospital A, but C is best for head injuries.

Unless of course you aren't conscious enough to direct the ambulance driver at all.

> Seems like a gigantic waste of effort for everyone to have to know that a bone fracture is cheapest at hospital A, but C is best for head injuries.

Imagine a world where prices are openly advertised, and as a result they start to drop.

Take laser eye surgery as an example. Prices are insanely competitive! They have been going down for years, and equipment manufacturers have been hard at work making more reliable and cheaper to operate equipment that has less side effects!

We have a free market for literally curing blindness and it works really well.

Now take more urgent but not life threatening cases. Last couple times I broke something, it was of the "well that sucks and it is kind of swollen but whatever" type, and I got to choose where to get an X-Ray at.

That is a perfect case where open pricing would drive the market price down and save me money.

As another example, physical therapy prices are often advertised on the open market. So are therapeutic massage prices. Both are price competitive markets.

Sure life threatening emergencies will still be subject to price gouging, but if the entire medical system is running more efficiently then even emergency services may see a reduction in costs in places. Maybe not for the trauma center, but for the hospital stay outside the ICU, why not?

They’re really not very competitive. In my experience there were discounts offered to people with mild myopia to get them in. People who need glasses to drive or see a blackboard pay more. People with large pupils pay much more. I think it’s likely the prices are suggested and discounted by the machine manufacturers who own patents.

The nominal price of Lasik is trending slightly down at the same time that the technology and procedure is getting better. It's a pretty stark contrast to most of the rest of the medical industry, IMO.

Lasik usually costs a few thousand dollars. Mayo Clinic charged me $1400 for someone to look back over an old MRI of mine.

I wouldn't have done said yes to that if I had known the price.

Will they even give you the prices in advance like that? And what is to say that they just won't change?

The idea behind price transparency is to make those prices available.

It is also illegal to change advertised prices, not to mention a great way to lose business!

> Next time when a bone in broken in your body

I definitely would, why wouldn't you? Broken bones are urgent but usually not life threatening - in that situation I'd definitely take a few minutes to decide how exactly to handle the situation - call an ambulance, or have a friend drive me to the hospital? ER, urgent care, or GP? Lots of options with different trade-offs, even if cost wasn't one of them!

Urgent, life and death situations are obviously a special case but are also a pretty small percentage of medical care at least IME. My wife has had quite a bit of medical care over the last few years including having 3 kids and several unrelated, important but not immediately life or death surgeries. In every case we evaluated several options before picking a Dr and a hospital. We looked at price, recs from friends, distance from home, reviews, etc just like picking a restaurant or a new car. Even in the few urgent life/death ER visits we've had we still picked where to go, we just picked ahead of time - when we get a new insurance plan we usually glance through it to make sure we know what are the closest ERs and urgent cares that are covered, and if there are multiple options we'll pick a default. Again I don't know why someone wouldn't do that, even if our healthcare were free we'd still compare on other metrics.

In my community in western Kansas, there are two hospitals nearly equidistant from us. An ambulance crew asks which one do we want to go to.

Why would cost not play a role in that decision?

Cost should play a role but I don't think it should ever cross your mind or need to be a decision you have to make.

In your anecdotal situation let's say you fell and broke your arm and are now sitting in the back of the ambulance when they ask that question. North or South hospital?

With your one good arm are will you load up a cost comparison of services between the hospitals, checking what the procedure might be if the break is impacted, if muscle tissue is torn or needs to be repaired surgically, what followups or cast removal costs, and building a spreadsheet of possible scenarios based on the underlying medical statistics combined with the risk factors of your incident? Ar you comparing that against hospital ratings for those departments and doctors and their success rates combined with education or training in line with best practices or regulations? Then are you compiling this data to make a decision based on which hospital is the most viable economically vs the standard of care for your suspected injury and reaching a decision?

Are you going to do this for every viable healthcare situation in advance so you're aware of updated costs at South or the new star surgeon hired at North hospital?

There's certainly a market for that analysis but I don't think it's analogous to real life. Most people are going to call 911, get in the ambulance if needed, and go to the closest hospital with capacity. The price, quality, and other checks need to happen at a higher level while still be transparent and open. Medicare has tools to solve this just like how the FDA us meant to resolve food safety questions and other governing bodies are there to regulate and enforce standards. Unfortunately it's not as simple libertarian as "North or South?"

Well, in our community, we know which hospital costs more before we break our arms.

This greatly ignores the reality that in a community, when prices are known, there's a collective understanding of which places (regardless of industry) are more expensive than others. And whether the cost difference are justified based on, again, collective experience.

So, no, of course no one is going to fire up the equivalent of GasBuddy when they're in an ambulance. You no doubt already know this, so why make such a ludicrous argument?

Because deputizing the government to negotiate down prices is a saner alternative to keeping costs of emergency services down given that the actual cost depends on so many factors that your analysis is extremely faulty.

The only substantially cheaper across the board hospitals are those people go to die in because they are profoundly incompetent and understaffed.

Hi "Mason General Hospital" in Washington State.

> The only substantially cheaper across the board hospitals are those people go to die in because they are profoundly incompetent and understaffed.

...And tend to get sued out of business for malpractice.

Which is a form of government regulation allowing punishment of poor/illegal performance. Medicare for all or a universal solution could enforce quality across all healthcare providers while simplifying negotiation not only as the federal government would be the only client to barter with but could make policy restricting costs or overhead in a careful manner.

There would definitely be an app created for all that in no time. We will be able to do all that stuff with one finger and your smartphone. With the exception of the well-off and rich, people who are living on a budget are certainly going to look up costs for non-emergency medical treatment.

It's semantics, but they're important when you're talking about economics. You're describing inelasticity of demand, which is to say that I need the good irrespective of the price (and it may mean irrespective of the geographic inefficiency).

In a free market, I can open a hospital across the street from your hospital and charge whatever I want for similar (or completely different) services. Presumably, our hospitals would also have a brand reputation: I know lots of folks who say "I'll never go to X HMO again, it's so much better at Y public hospital" and would gladly drive an extra mile or two with their broken arm kid if it means they're fairly certain they'll save a few grand (or more).

A similar example is that I'm halfway down a 200 mile highway, and I need gasoline. There could be one gas station, there could be five, but the fact that I'm allowed to open a gas station next to the sole one that exists means it's a free market. If the government says "there shall be one [or two, or ten]" gas stations here, or that "all gas stations here shall charge this rate", then it's less of a free market.

You may be trying to describe the concept of perfect competition[1]. If so, I'd agree with you that health care can almost never achieve perfect competition because perfect information becomes harder to obtain as situations become more expedient or dire.

[1] https://en.wikipedia.org/wiki/Perfect_competition

You're right, healthcare as I am describing it is a perfectly inelastic service. I cannot think of any other example where someone would show me an absurd price and I'd still take like. Like $1M absurd. I'd rather push my car than buy gas at some point. The same cannot be said about my health. There is no point at which I'd rather just die.

The government needs to regulate markets like this.

If healthcare is perfectly inelastic and inelasticity is the dominant factor in pricing, shouldn't we expect all procedures cost $LIFE_SAVINGS each already? I'm not trying to be glib; my point is that a) healthcare is _not_ perfectly inelastic, and b) even in the presence of high inelasticity, we can observe that market forces can exert downwards pressure on pricing. I think that arguing for a remedy solely on the basis of elasticity is misguided and potentially ignores larger problems within the market.

Consider the example of food, in general. Demand for food is wildly inelastic - without it provided regularly, for your entire life, you _will_ die. If elasticity were the only consideration in pricing, we should expect food to be break-the-bank expensive, but it clearly isn't. What else is different between the healthcare and food markets?

(To be clear, I'm not defending the current state of our healthcare system. It's broken in a lot of ways, and is way more expensive than it needs to be. I'm just arguing against the idea that the cause of its dysfunction is inelasticity of demand.)

I think for many many people, all procedures already do cost $LIFE_SAVINGS. Don't > half of Americans live paycheck to paycheck?

Yes, nearly 80% of Americans live paycheck to paycheck[1].

[1] https://www.forbes.com/sites/zackfriedman/2019/01/11/live-pa...

> If elasticity were the only consideration in pricing, we should expect food to be break-the-bank expensive, but it clearly isn't.

Because welfare (and subsidy) programs exist so people aren't desperate for food, just like people who are covered under medicaid are not desperate to pay for health services.

There is really no mystery here.

I think that because it happened in Japan and other places. Japan has a single payer health insurance system called NHS. The government pays 70 percent of the cost of all health procedures, if you’re a low-income or elderly resident, it pays as much as 90 percent. The remaining 30 percent is covered by private health insurance.

The government is EXTREMELY good at negotiating prices. In other words, there are already examples of it working really well, so it's pretty clear it can work well here too with enough care.

Japan is known for really high-quality care that is insanely cheap and has more doctors per capita than in the USA. So the worry that overall service and competition would decline is unfounded.

So let's take really good working examples and try them here. The USA can do so much better, it's not even funny.

https://www.bloomberg.com/opinion/articles/2017-09-19/want-a...

One issue that's talked about less frequently is how high US doctor incomes are compared to other countries. The average doctor in Japan made ~$105,000 USD [1] in 2014, whereas in the US the average primary care doctor made $195,000 and the average specialist made $284,000 [2]. Anecdotally, I had an eye infection in Mexico and was seen by an ophthalmologist the same day for an $8 consult fee and treated with antibiotics that cost $20, using the exact same techniques and equipment that would have cost me hundreds of dollars in the US.

We're paying our doctors sometimes double what they make in other countries and receiving inferior health outcomes. It's easy to vilify the AMA but our doctors also have an unusually high amount of risk and obligation when it comes to malpractice, which wouldn't go away if everyone magically was on Medicare For All tomorrow.

To reduce health care costs, someone needs to get squeezed... but who? Reducing doctor salaries will lead to a shortage of doctors unless there's some additional action on easing the education burden they presently have to take on.

[1] http://nbakki.hatenablog.com/entry/Annual_Salary_by_Occupati... (2014) [2] https://www.businessinsider.com/how-much-salary-does-a-docto... (2014)

The AMA most certainly needs to be vilified. It actively lobbied to limit the number of residency slots thus leading to doctor shortage and higher prices. It even indulged in price-fixing and opposed retail clinics that could offer competitive pricing.

https://washingtonmonthly.com/magazine/julyaugust-2013/speci... https://mises.org/library/how-government-helped-create-comin... https://www.washingtonexaminer.com/thanks-to-doctors-there-a...

Healthcare admin jobs should be drastically curtailed.

I’d argue part of the cost of healthcare should be educating and training doctors. So there is control over number of doctors. Best way to reduce their salaries is increasing supply.

in the US, you are allowed to buy a ferrari or a geo.

in mexico, they only make geos. So prices reflect that.

in the US, you are only allowed to supply healthcare if you buy into $500,000 of loans and give up 6 years of your life. The AMA and government have mandated it to be so.

That's the price of a ferrari. US Medical salaries reflect that medical ferrari

High quality care in Japan? this claim is debunked when you see doctors dont spend more than 5 minutes with patients, barely do any tests before giving out medications by the dozen for most medical conditions. If that is high quality care it is seriously laughable.

To be sure you'd have to run a study where you compare outcomes vs spending a bunch of time with each patient and doing a bunch of tests..

Oh wait...

==I'm interested to know why you think the government is incentivized to negotiate the best pricing for citizens.

I can think of two. First, so they can spend the money on other things they want (military, social security, education, etc.). Second, is so they can get re-elected by those same citizens.

==There is no way to tell if the price we are paying is at all good value for money compared to what it could cost.

We could look at the dozens of other developed countries who work like this, should give us some clues.

> I can think of two. First, so they can spend the money on other things they want (military, social security, education, etc.). Second, is so they can get re-elected by those same citizens.

Respectfully, is there any reason to think that the US government would actually do this, based on past behavior? Government spending is famously wasteful, both parties spend like it's going out of style when it aligns with their interests, government debt continues to explode, and spending continues to grow year-over-year effectively unchecked. I may just be overly cynical here, but I don't think that responsible spending is the primary election issue for hardly anyone today.

I don't think "frugal" fits the description of many or any of our lawmakers. With few exceptions, they all want either higher taxes or higher debt to pay for their favorite things.

Because HHS / CMS negotiates all of these rates I think it might be hard for voters to draw a path between rates / expenditures and their care, for the same reasons they fail to draw a line between their current insurer's negotiated rates and cost of care. A single negotiator will likely only make pricing more opaque, rather than less, so there will not be a strong incentive to perform better at the HHS level without transparency. Further, if Medicare for all is biased toward removing private plan competition there will be no incentive whatever for Medicare to be more efficient. Rate issues can be easily blamed on the providers.

==for the same reasons they fail to draw a line between their current insurer's negotiated rates and cost of care.==

Insurance companies are not subject to FOIA requests like the government. People tie Medicare to the Government, why would this be different?

==A single negotiator will likely only make pricing more opaque==

Not sure it's possible to be more opaque than today. All of the other country's who do it this way have far more transparent pricing than the US, so I'm not sure I buy this reasoning.

> Second, is so they can get re-elected by those same citizens.

American politicians are not elected by voters or citizens, they're elected by contributors. This unhinging is either a root or partial cause to many problems.

Sorry, that's total BS. Complain all you want about "campaign contributions", but the politicians absolutely are elected by voters on Election Day. The only thing contributors can do is try to change opinions by funding campaigns which goes to advertising. The final choice is made by the voters, and they are the ones ultimately to blame for the results.

That's fantastic, are they also to blame for the duopoly of political parties in America? Because the way our system is set up, first past the post, it is almost guaranteed. Are the voters to blame for the structure of our government which was written 250 years ago?

Yes, they absolutely are. If they didn't like it, they would fight to have it changed. They've fought to have many other things changed, and various Constitutional Amendments have been passed as a result. Did you forget the 18th Amendment, which was passed because of a bunch of Temperance activists? (and then the 21st that was passed because the result was a disaster) The system is set up this way because the voters don't want to change it.

> They would fill the same role as existing insurers, but instead of multiple black boxes there would be one.

Because larger purchasers have more leverage to negotiate better discounts/bulk rates. When your choice is, "take the offer or you don't get any payment", you take the offer.

We know it works because we have examples. It is quite frustrating to see you not even try to go and get those examples. It only takes a simple google search.

Here are three good ones: the UK, Japan and Canada. All different systems, all providing medical care for much less cost than we do in the US.

Additionally, your reasoning is flawed at best. The government can legislate that providers can only charge $x for y service, which private actors cannot. 300 million+ people is a very large market to leave just because you are slipping on profits. There are many other levers a single payer who is the government can pull as well.

"The U.S. has higher prices for most health care services and prescription drugs, according to available internationally comparable data."

"While available data are limited to select services and drugs, we find that higher prices – more so than utilization – explain the United States’ high health spending relative to other high-income countries." [1]

Perhaps the US is closer to those other countries than you claim.

1. https://www.healthsystemtracker.org/chart-collection/how-do-...