> Um, okay. Duh. A better question to ask would be: Why are prices not falling?
It's an excellent observation, and it begs your excellent question.
Unfortunately, we can't get to an excellent answer. The US is ideologically incapable of acknowledging that "market failure" exists.
I will admit that these may work because they fall into the area of human vanity, and our current image obsessed society may be driving that behavior.
But then, doesn't that hint the total healthcare market could work with similar market adhering dynamics as in Lasik (its easy to get a quote and find a competent doctor) and a long run advertising campaign, a la brushing teeth back in the day, to get people to have regular checkups rather than ER visits.
https://news.ycombinator.com/item?id=16007246
>> I don't have the time or expertise to do the months of legalese and calculus it would take me to understand my insurance policy, so I have no idea how much an ambulance ride would have cost me. $0? $400? $15000? None of those numbers would surprise me. As best I can tell, insurance companies throw a dart to decide whether you're covered or not, and then the healthcare provider makes up some insane number if you aren't.
>> The Uber got me to the hospital faster than an ambulance would have, for less than $10, and I knew it would cost less than $10.
It would be interesting to have a conversation about how you deliberately construct a sane ambulance market (liability, dispatch, predictable pricing, proper competition) to handle a wider range of emergencies.
But in the US, I don't expect such a reasonable conversation. I expect to be bludgeoned to death with the word "deregulation", as if the only control we have is a a single dial to turn "regulation" up or down.
You never get to zero "regulation". "Deregulation" is always selective and another form of market interference -- and like any market constraint, selective deregulation will always favor certain players.
So, can we have a conversation about constructing a market? It's the US. I'm not getting my hopes up.
Everyone agrees there are good and bad regulations, but everything gets framed such that any regulation is bad, and any deregulation is good!
There's no real conversation about which regulations are which! It's just naive free market vs full socialism debates in every public sphere.
Another option would require localities to use a bidding system for ambulance providers rather than doing it themselves or contracting a gold plated service.
Maybe mandate the ambulance charge the same rate to insurers as they do non-insured people. A huge part of the "list price" for these services are just an attempt to set the negociation with insurers high.
Also, comparing Uber to an ambulance is silly. They aren't comparible services. Ambulences aren't a hospital taxi. They provide some level of first aid and stabilization.
If you don't think you are going to get or potentially die, you should be taking an uber/taxi/friend ride to the ER.
My point is that all markets are artificially constructed. Having the government set prices is simply constructing a market using a different set of rules.
Your proposal sounds like applying the "all-payer" system to ambulance service.
https://en.wikipedia.org/wiki/All-payer_rate_setting
There probably isn't a more appropriate use case for all-payer than ambulance service!
> Also, comparing Uber to an ambulance is silly. They aren't comparible services.
Au contraire -- it's a brilliant, revealing comparison. It illustrates exactly what is missing from ambulance service today: price transparency.
It's no coincidence that all three of those are optional services that (most) people do not need to not die. The free market has worked relatively well for services like that, and most healthcare does not fall under that category.
Would you outlaw insurance, then? I guess that could be a good approach if all of us were rich enough to self-insure!
Not "anything." Obviously there are other types of insurance whose rates aren't skyrocketing higher than inflation, like car, auto, or life insurance.
> Would you outlaw insurance, then? I guess that could be a good approach if all of us were rich enough to self-insure!
I would make employer-provided coverage no longer tax deductible, and possibly even reverse that initially so that consumer-purchased coverage is tax deductible. This would cause a shift over the next few years away from employer-provided coverage.
This would be a net zero change in spending on day one, but now consumers will care about what they're paying for insurance and can switch on their own. This isn't a problem that will fix itself overnight, but when consumers actually see $1k+/mo leaving their checking accounts every month, they will actually shop around and make choices based on pricing. They don't do that now because they don't see the cost or pay for it directly.
With consumers making choices based on pricing, insurance providers will care much more about prices and push back, just like they do in other markets.
It won't solve everything, but it's a start.
This is something that I have argued for as well; the disconnect right now between what insurance costs, what it pays, and what the customer pays is too confusing and provides a very strange incentive structure. I would even go further and argue that all medical expenses should be tax deductible, with insurance premiums just being a special case of the general deduction. Get rid of all this FSA and HSA nonsense.
That said, I think part of the problem is that medical insurance is increasingly being used for routine medical care. Auto insurance, for example, does not cover preventative maintenance or oil changes, so consumers need to price those themselves. Similarly for other major kinds of insurance, like life or homeowners.
Vision insurance plans are increasingly common now, like VSP, and as a result, I've anecdotally noticed strange distortions of the market for eye checkups; we're still at the point where you can get a quote for one, but increasingly it's buried behind talk of co-pays and co-insurance that serves to hide the fact that the costs are going up for no reason, and the quality of service is being put at the exact minimum level that the insurance generally will cover.
I'd much prefer a high deductible plan (in fact I'm on one now) but I'm hampered by the fact that it is almost impossible to actually manage -- the billing comes from three different places and I can never figure out whether I've already paid a bill because they keep billing for different amounts for the same visit. And sometimes they bill my insurer, and other times they bill me directly, or sometimes they just go ahead and do both, and also send me threatening letters about paying bills that I've already paid.
I would love to see increased competition in this space, but until we get rid of employer plans, I don't see that happening.
Highly recommend it. It’s got some great ideas. And I've mostly just copy/pasted this from another comment I made recently. I really hope some of the ideas in that book start making inroads via legislation.
Also, for medical care it turns out that healthy people don't benefit much from regular checkups. That way of stating it is a little tautological, but people lacking conditions that need management get little benefit from scheduled checkups.
The harder question is how to construct a market for non-elective procedures, such as emergency care. Consumer choice doesn't work under those circumstances. We have a market failure. How do we solve it?
But in the US, we don't acknowledge that we are already regulating, and we are wholly ideologically committed to the notion that "regulation" is bad.
"Veblen Good: A good for which demand increases as the price increases, because of its exclusive nature and appeal as a status symbol."
I'm not following. Heart surgery demand is based on having a heart problem. Taking a step back, health care encompasses more than just picking a heart surgeon. Most practitioners won't tell you the dollar price of a service beforehand even if you ask. Standard behavior is to go see whoever is covered by your insurance.
Standard behavior is to see the best provider covered by your insurance.
It's a small textual difference, but a massive actual difference (and what makes it a Veblen good).
Another example is day care for children, which is also disproportionally expensive here. Both are cases when people just don't want to cut on money, they want to have the best option for their health or their children, the costs are only a secondary consideration. Which means that the health care market has not much of a competition on prices and as a result everything that is health related is expensive. Even basic things like nutrition supplements are around 5 times more expensive than in other European countries.
We're not talking Drunk Eddie suddenly being allowed to practice as a surgeon, the $5k guy will still have standards and steady hands.
The risk differential is probably not worth a cheap car.
Yet only 10% opt for it, because the NHS is generally good enough. And of those 10% a lot only have it because it's offered as a mostly free perk by their employer.
But I do think that there is a segment - part of those 10% who opt for private insurance - that will always pay extra to get "the best" whether or not there is a major difference.
Unless you have knowledge to the contrary, I'd dispute this. Most physicians, and specialists in hospitals in at least the Pacific North West are NOT hospital employees.
This is how you can get into ridiculous situations where your hospital is "in network", but your provider is not (because of course, you get a choice on the physician you are assigned at a hospital, especially in ED...).
First, it "penalizes" doctors/hospitals that take on the most severe cases. There is no objective metric for "we saved X people who would have died at an average facility." Do you want a metric that would encourage a doctor/hospital to deny an aggressive procedure for fear of taking a hit in its mortality metrics?
Secondly, it ignores ongoing quality of life. A cardiac surgery can have a later death that does not count in its mortality rate, even if it was due to a complication caused by, or significantly contributed to, by inferior medicine.