I think you’d be surprised how little price competition there would be if everyone paid out of pocket. It won’t change insurance premiums; it won’t change the amount of investment (training and certification) needed to become a health care provider; it won’t change the price of advanced medical equipment; and it won’t change the price of patented drugs.

Before you conclude that the free market can solve everything, consider too that health care isn’t a typical service that follows ia supply/demand curve. The demand curve is practically vertical, especially when your life is on the line. You’re not going to shop around when your appendix is about to burst. Plus there are still high base costs, and scarcity (artificial or otherwise) of healthcare resources. And the monopolies granted to medical device and drug makers through the patent system keep prices high so the patentees can recoup their investments.

There is no easy way to solve this problem, despite breathless claims to the contrary that have been plaguing our airwaves since the 1980s.

Sure there is. It's called single payer. There's no way to fix this with the current layers of middlemen milking profits from what should be a public utility.

I meant to say there’s no market-based solution to the problem.

That said, single payer has problems, too, which is why few countries use it in its purest form. Everyone gets a “floor” of coverage, which is a good thing, but people also hate waiting long periods for treatments and the inability to choose a specific care provider. Britons love NHS, but they hate it, too.

There’s absolutely a market based solution.

You can’t go single payer in the US without actually destroying the entire insurance industry overnight and because of that, there’s no way to transition to it smoothly. The HSA plan does both.

In which country with more than 10 million people have you seen a market-based solution result in high patient satisfaction, low costs, and top-tier treatment outcomes? Not just in theory, but in reality.

All of those prices exist from negotiations between the insurance companies and not the free market.

Mark Cuban’s cost plus drugs is proving this in pharma right now.

This wouldn't work when you can't get an accurate, up-front price for anything, and all unexpected costs fall on the patient with no real recourse.

You can’t get an up front price because of insurance, not because it can’t be provided.

You can't get an up-front price even if you're paying cash. Maybe from an independent dental practice, if you annoy them enough, or other practices that are standalone.

That's all because of insurance.

If they give you pricing that in any way contradicts what they tell the any of the insurance companies they are charging, then the practice can get themselves in hot water with the insurance company.

Why do Americans think competition on price is practical for health services? The most expensive services people receive tend to trauma care or for long term debilitating conditions. In both cases the ability to "shop around" is either literally impossible, or geographically limited (and the ability to travel is just another regressive tax).

Because HSA with high deductible coverage for emergencies addresses both situations.

This is just silly talk.

Are you going to shop around different pathology labs when they snip a bit out of your colon during a colonoscopy where you are under general anesthesia? Are you going to be googling for reviews of different neurologists when you get taken to the emergency room with a bad concussion or a stroke?

I don't think so.

So how is your market-driven medical system going to work? This isn't like picking a restaurant.

An HSA is essentially attached to high deductible insurance, so major emergencies that would cost over your high deductible would be covered in full.

All of the lower cost, non-emergent services would get the benefit of you shopping around.

You’d also need to be able to select your own insurance provider directly (pretax) rather than being stuck with whoever your employer selected.

In the current situation your employer selects your provider, your medical service providers have to deal with that provider whether they want to or not. You and your medical service provider were both removed from the decision of whether your insurance company was a good choice or not.

The HSA plan puts everyone back in direct contact with their providers and allows market forces to work naturally again.

It’s the only proposal that has a prayer of fixing things.

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