Health care is the absolute prime example of a Veblen good as people are willing to pay for perceived quality. After all would you prefer the heart surgeon who charges $5000 or the one who can charge $25000
"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.