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.
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.