The U.S. could slash health-care costs with two fundamental changes

Re:The U.S. could slash health-care costs with two fundament... by ianai on Tuesday November 12, 2019 @10:20PM (#21520916)

Health insurance companies in the US absolutely ARE socially worthless. They’re the singular reason we have this crazy price inflation. Doctors raise prices as a direct way to impact what they actually get paid from insurers. Insurers have “market power” (read that as-unilateral power to tell their customers and providers which way they can shove it) over providers incomes. In order to get price X from insurance providers charge X+e where e is an inflation factor to noisily correct for the kick in the pants from the insurance company. But by law providers then have to charge that price from everybody. This is a failed market.

[ Parent | on HN ]

Re:The U.S. could slash health-care costs with two fundament... by lotsofpulp on Wednesday November 13, 2019 @05:20AM (#21522611)

Prices clear when supply curves meet demand curves. A plumber can’t charge $1,000 per hour because another equivalently plumber is willing to work for $200 per hour.

Doctors can charge high prices because they have low supply and high demand for their services.

No one is stopping a doctor from offering their services at $25 or even $50 per 30 min consultations. If doctor A was offering their services for X + e to insurance just to get X, and doctor B was offering their service for Y, and Y is less than X, then insurance would still go with doctor B even though there was no “e”.

Insurance companies solve the issue of a buyer having no knowledge about what they are buying since they also employ doctors to check others’ work, and to negotiate pricing as a group. Some countries don’t need this since the buyer is the government, but the government is still performing the same functions of negotiating prices and verifying doctors’ work.

[ Parent | on HN ]