> You just feel its cheaper as $1 = 60 rupees. There you get a straight 60x value of your money. That is what it is at the end of the day.

I find the vast majority of people are tripped up by currency conversion, but I'm surprised to find this on HN. In Japan $1 = 100 yen, but certainly I don't feel I have 100x in buying power. A bowl of ramen will cost me $8 in SF; an equivalent bowl will cost me 800 JPY in tokyo.

Let's not even get started on the Korean Won...

I'm surprised that how many otherwise smart people gets tripped up by this. The only time you can deduce something from the exchange rate is if you compare the difference between the two rates over a longer period of time. Then it can roughly tell you things about difference in direction of inflation between the two countries, and the effect on wages and imports/exports. If the difference between the exchange rate between two countries doesn't change for a long time the prices of goods in both countries end up being roughly the same.

"If the difference between the exchange rate between two countries doesn't change for a long time the prices of goods in both countries end up being roughly the same."

Simply not true. Compare the cost of a beer in, say, Thailand and Norway. Are you suggesting if the exchange rate were fixed they would reach parity over time?

Compare the cost of anything in Norway, and well, anywhere else. Norway is one of the most expensive countries in the world for foreigners because of it's abnormally high average income.

Assuming no new disruptions, then yes, economic conditions in the two countries would eventually equalize and prices would differ by at most the shipping cost if one of the two countries happens to have much better natural conditions for producing beer than the other. It's because disruptions are now becoming (have become?) the norm that equilibrium never has time to come close to manifesting itself.

Alcohol is a poor example because of special taxation.

The Big Mac index is better for many reasons, one being Mcdonalds is large enough to mostly optimize everything wherever they operate:

http://en.wikipedia.org/wiki/Big_Mac_Index

I think it's a little more complicated than that. Culture plays a major factor, especially when it leads to niche markets. If a product has a niche demand in country A, and high demand in country B, then the cost in country A can easily remain much higher than the cost in country B. In addition to shipping cost being higher in that case (which is why that difference is hard to abstract away), you have to consider the opportunity cost of keeping it in inventory, the risk of spoilage if the product is perishable, the risk of depreciation if it's technology, etc.

"but certainly I don't feel I have 100x in buying power"

Sometimes the economics do conveniently work out this way, which is why some people might get confused. For example I lived in Poland for a few years, and at the time a dollar got you about three zloty, and for the majority of day-to-day stuff you did indeed have about 3x the buying power. Of course for things like computers you ironically had about 1/3 the buying power.

Purchasing Power Parity (PPP) is a better measure

Yen is the equivalent of cents, not dollars, thats why the confusion, yen doesnt have a concept of 100 cents=1 xxx. In Rupees case it is an equivalent of dollars, 100 paisas = 1 Rupee.

So in this case 60x is a reasonable assumption except not including the Purchasing Power Parity.

if the same logic were true, cars would cost 1/60 of labor + reduced price on parts locally made + same price and import duty on imported parts. However cars typically cost twice in India.

Cars cost twice in India for a totally different reason. Its basically because of high import duty and not because they are expensive to make in India.

It's like measuring your penis in millimeters instead of inches to make it longer.

Zimbabwe is printing trillion-dollar bills, so everybody there must be rich....

I got to hold one of these Zimbabwean bills the other day. One hundred trillion dollars, IIRC. Pretty cool.

I hope you'll think of me when you're spending your new-found wealth.

Is it Zimbabwe that prints expiry dates on their notes? I remember seeing one African banknote that did this.

How did you get it? I'd like one too!

There are plenty of them on ebay.

In Japan $1 = 100 yen Is the Yen equivalent to the dollar though?(are there fractional yen cents and that kind of thing) I guess since the exchange rate has been around that for as long as I have been alive, I have always thought of it as 1 Yen = 1 penny.

> In Japan $1 = 100 yen Is the Yen equivalent to the dollar though?(are there fractional yen cents and that kind of thing)

Why is this relevant?

It isn't, it is just that when the exchange rate comes up it is always expressed as yen vs dollars when it seems yen vs pennies seems more appropriate, same order of magnitude and what not.

In agricultural terminology you can either pay people 'by the day' or pay them 'by the hundred yards'.

I have worked in both types of systems and can see merits and pitfalls in both.

In the former system there can woeful output whilst in the latter there can be woeful quality.

Neither of these are inevitable.

In a salary system, if the lazy/incompetent can 'get away with it' and the industrious/competent aren't acknowledged it has a poisonous effect on the organisation.

In a fee per item system the lazy will earn less automatically but there needs to be careful monitoring of the quality of the output with particular attention paid to people at either tail of the output distribution. Also people with high output (because of poor quality) can drive down wages for everyone and create a treadmill where the quality of everyones' work suffers as they try to maintain their income.

Those aren't the only two options. If you want to incentivize outcomes and efficiency, fee-for-outcome is an obvious option.

When it comes to medical care, you have to be really careful about how you define "outcome" if you want to use that as an incentive. You can't just use patient recovery/survival, because then you'd have doctors avoiding patients that need their care the most. You'd also continue to get extraordinary measures taken to extend the life of patients that can't survive, even when letting them go is the more humane thing to do to ease their suffering.

I've thought about this a lot, and I don't think there is any objective way to provide outcome-based incentives. The best I could think of is peer-reviewed judgements of outcomes, but that could become pretty corrupt.

For rare conditions and the very sick, there are a lot of thorny issues, and fee-for-outcome may be hard to implement well. However, those don’t represent the bulk of medical procedures; the vast majority of what’s done in a hospital is utterly routine and predictable, and the outcomes are most definitely quantifiable.

But, in those routine cases, fee-per-service-rendered is pretty much exactly the same as fee-per-outcome, no? I mean, barring malpractice, which already has its own (litigious) path of remediation.

It brings the financial incentives inline with what everyone says the goal is. Fee-for-service incentivizes volume, even if it comes with the consequence of worse outcomes; we simply depend on doctor’s morals to not push it too far, with malpractice and licensing handling truly outrageous abuses. Fee-for-outcome explicitly incentivizes better quality control in a much more fine-grained manner.

More on point, fee-for-service incentivizes unnecessary and expensive diagnostic tests. Let’s say a patient presents with an uncomplicated broken arm. If there’s a set payment for an outcome (successful treatment of the break, with fully restored function), and diagnostic and treatments costs come out of that fee, the incentive is to order as many x-rays as are necessary to successfully treat the injury and no more. In fee-for-service, the orthopedist has no incentive not to order superfluous imaging because it doesn’t cost her anything, and may have incentive to order extra imaging (if, say, she also owns the imaging center that bills for it).

Medicine is littered with examples where there are two tests whose diagnostic power is statistically equivalent, and yet doctors common write for the more expensive test. Fee-for-service is either a neutral or perverse incentive in these cases. Fee-for-outcome aligns the incentive with what society seems to want (lower-cost healthcare with good outcomes).

I fail to see how fee-for-outcome helps any of this. They would still be free to order the more expensive test, and it would even encourage more testing. If they run the wrong test and miss the diagnosis, then they don't get paid at all...

The doctor/hospital gets a flat fee for the outcome regardless of how they achieve it. Unnecessary procedures and tests come out of their bottom line.

> If you want to incentivize outcomes and efficiency, fee-for-outcome is and obvious option.

When I write a contract, there are often two prices: a minimum which is stingy and a bonus which is far from it.

The point is to say that if you do the minimum for this contract, you get a certain amount; if you excel, you get paid for that excellence.

Translated to health care, I think I'd like to see doctors doing less paperwork and more doctoring. It's not perfect, but I trust competition to pay that excellence price to those who deserve it.

That in turn means that if I need some kind of crucial care, I know where it can be found. If the system is over-regulated, that is not so.

I know - anecdote!=data. But here's an anecdote:

We recently had a baby (in Aus). Our Indian neighbour (been in au for 7 years) was amazed at how little medical intervention we had. His comment was that in India there was much more incentive to recommend drugs, c-sections, etc.

Anecdata is the term I've heard for this situation.

I am in Bangalore and don't have medical insurance. Paid Rs 300 fee to General Physician for a consultation another 1500 Rs. for a bunch of tests. In my hometown in Bihar the same thing costs Rs 150+500 with excellent doctors. It's not all rosy but it's not that bad.

The only thing I can tell you is to go and get health insurance ASAP. Both for yourself and your dependents.

Get one and be safe, one serious illness can bankrupt you these days(actually it always has). But my point is even a week of hospitalization can be pretty expensive. And don't be under an impression you will be able to travel to Bihar or wherever when the need arises. During cases of emergency those are not practical solutions.

>The only thing I can tell you is to go and get health insurance ASAP. Both for yourself and your dependents.

I am not too sure about that. I think medical insurance hasn't yet become all pervasive in India, and thankfully so.

Insurance companies are there to make profit, and so will tend to exploit fear to maximize their profits. Leading to inflated costs, as it has happened in US.

So I am against insurance in this form, unless it works like a non-profit cooperative. In fact Dr. Devi Shetty has also innovated here, with a scheme which costs as little as Re. 5 per month (1/60 USD per month) and provides heart coverage to rural Indians. It works as a cooperative scheme of course.

I am surprised, Insurance companies, even exist. As they should be the first thing to be replaced by Software (as in 'Software eating the world' by Marc Andressen)... It should happen, will just take some time, I guess.

So, I think, India can still save itself from corporate medical insurance. As seen in some countries like Canada, a fully public health care system, works as good, if not better.

On a personal note, after having, earlier, taken medical insurance for me and family by paying some 9000/- Rs per annum and getting a cover of 300000/- Rs. I decided this year to not renew it.

But of course, I won't dare to prescribe it generally, each person must take his own decision.

Appendix: 1) http://arachnoid.com/wrong/index.html (ctrl-f 'Insurance is a wise investment')

Well I have a few doctors in my family so I know the intricacies. There are several hospitals/clinics in India which still provide affordable care. No one in my family has a medical insurance. We have had a few health emergencies,in metros too, but the cost was always managed. We only have Life Insurances.It doesnt make sense to pay someone else a hefty insurance premium every year, which may or may not pay back, when the best insurance you can have is a family who shares. You get sick, I pay and vice-versa. I think instead of an inflated health insurance plan we can have a friends or family plan where you get together put some money and use it whenever a situation arises. Hey! I have a startup idea.

Umm, most policies have caps of Rs500k per year (or is it incident). Am I mistaken? That's laughably low even by Indian standards for a serious illness.

I'm assuming the the HN-India audience can hustle Rs500k. My two cents is that you shouldn't sweat it in India if you don't have health insurance.

However, if you get something like cancer in India, not insurance policy will help: the cost of treatment is just too high. You will go bankrupt.

Agree. The last time I bought health insurance in India, it cost me Rs 2600 ~ $50 for a year for $10000 worth of coverage.

That cant be right/Probably has a thesis of prohibitive clauses where you dont get the monies

>>I've never been to US, but I can tell you the Indian health care system is if not less is equally greedy compared to their US counterparts. Its just the same.

Its NOT the same. High costs in the US are essentially a result of policy corruption - a systemic issue with results in the exorbitant prices. Greed amongst doctors is prevalent in India as well as the US - maybe more prevalent in India due to general poverty. But health care in India is more 'free-market' than in the US, which is why it is more efficient.

>>I've never been to US, but I can tell you the Indian health care system is if not less is equally greedy compared to their US counterparts. Its just the same.

I have been to the US and I have spent a huge time in India. I have witnessed the Indian health system in close quarters and have close family members undergone major surgeries. There is greed in India, no doubt about it. But the American system is completely EFFED up - there is no comparison. If you go to the US and spend some time understanding/experiencing the system, you will be thankful for what you have in India.

>>These days if you don't have health insurance you are more or less screwed. Its just like the US. I mean from whatever I've read about US so far its the very same. Nothing changes. You just feel its cheaper as $1 = 60 rupees. There you get a straight 60x value of your money. That is what it is at the end of the day.

You are completely wrong about this only because you don't know what happens in the US if you dont have insurance. My close family members have undergone major heart surgery at Narayanan Hrudyalaya. They had insurance, but even if the insurance did not cover it, it was not a big deal. I could have easily paid from my own pocket - it cost just over $2K USD - not a big amount for middle class Indians for life threatening surgery. All the prices are transparent - so if you dont want to pay as much you can choose cheaper options (shared post-op bedding etc.) which will reduce prices in half - with very little difference in medical care.

In the US if you dont have insurance for something like this - you will go bankrupt. The only reason you don't know about this is because most of your NRI friends work for bigger tech companies which provide good coverage.

Infact one of the reasons why health care is reasonable in India is because insurance coverage is limited and not mandated by law. The resulting free market delivers the economies quoted in this article.

>>Coming to our system. Forget greed, fraud in the system is so massively high nothing that I write here will explain it.

No it is NOT. There is a tendency in Indians to think that they are completely fucked up. Travel around the world - especially to the US and you will thank your stars - and please dont go with what NRI's say - they have a vested interest.

It is true that there is greed in the system and there is fraud - but there is a relatively freer market. You can 'choose' your doctors/hospitals. If you dont have a good experience with a hospital you can choose to write a review on Mouthshut.com and have them get less business. You can do your research and choose a better doctor/hospital over a worse one. This 'choice' and the enabling free market makes India health care deliver economies at scale which are impossible in the American system.

>>The fees for completing your medical course is astronomically high. Capitation fee often runs in crores, the net fee by the time you finish your MD is so high no doubt most doctors have to practically turn into crooks to get something out of it. Add to this nearly more than a decade of studies sets a perfect stage for these sort of activities to happen.

Assuming that this does turn them into 'crooks', they have an easy way to get their money 'out' - migrate to the US/UK after completing their residency. Some doctors are greedy, some are good. The greedy ones land up outside India as much if not less than inside.

>>I could have easily paid from my own pocket - it cost just over $2K USD - not a big amount for middle class Indians for life threatening surgery.

You could have, sure easily! Besides a person who has traveled to US doesn't fall under middle class category anymore. Sorry you don't. In a country where kids die of hunger and where parts of the country manage to barely eat two rotis a day with salt- traveling and working in the US is a rich man's luxury.

Sorry to be putting it this bluntly, but in India anybody apart from Mukesh Ambani thinks he belongs to the middle class.

Most people(The middle class- People who make around 10/15K rupees a month) can't pay for expensive medical treatments, medication, post-op follow ups etc and that's a fact.

>> If you dont have a good experience with a hospital you can choose to write a review on Mouthshut.com and have them get less business.

Yeah right. I find it hilarious when techies offer solutions like these to common people who don't even know how to turn on a computer.

My cook makes 15K per month. Life threatening procedures are relatively rare. Incase he has to go through a similar surgery he can go for a 'package' which will cost him 50K. There are no 'noticeable' differences between the health care that he will get to what my family member got. He can afford 50K for something as rare and life threatening like this.

Mouthshut.com was just an example to demonstrate what it means to have a free market. My cook obviously can't access it - but he will ask me and his relatives on which doctor/hospital is good/cheap. He faces greater infomation assymetry - but the fundamental advantages of a free'r market still accrue.

I agree. A large portion of the population barely makes between 5-15k per month that is not sufficient for 3 meals a day + housing + school education. Forget surgery, they can't afford routine doctor consultation, diagnostic tests and medication. And yes, diagnostic tests are almost always done whether needed or not.

You can't choose your doctors/hospitals in the U.S.?

The TV show Scam City had a field day with the Indian "doctors"

http://natgeotv.com/za/scam-city/videos/delhi-doctor-scam