The law of supply and demand relies on efficient markets. Heathcare, to name one, really doesn't apply.
Labour can be similar, depending on how the economy is organised. If you need a job in order to eat, then you can't freely reject a job offer. Only for fairly wealthy people is the labour a free market. Unless you get a good social security system (welfare, UBI, etc). Then people may be able to walk away from a bad job offer.
Low unemployment is also making the labour market behave more like a free market; there are other jobs available, and employers can't rely anymore on job seekers being desperate for a job.
For routine primary care like regular checkups or an appointment for some symptom bothering you, you absolutely are not under duress. You won't die because you took 5 minutes to choose a doctor on ZocDoc. With more transparency in costs of service, this could definitely become a market, ie "for $XX per month, get unlimited visits to our partner doctors' offices".
For emergency situations, surgeries, and things that require expensive ongoing care like cancer, you're correct in that you're under duress and can't really shop around. This is the market in which the usage of insurance makes sense, as it's a rare occurrence that would be catastrophic to pay for out of pocket for the majority of people.
I think we can do a great deal to lower cost of healthcare to Americans if we think of it in this two market approach, and handle each accordingly.
I'm ready to vote for forced transparency at all levels. I'm tired of this opaque negotiated pricing with insurance companies that manages to maximize my out-of-pocket costs.
You are correct that non-emergent care is a WAY bigger market than emergent. Most people completely ignore this. Chronic conditions like diabetes and Crohn's, end-of-life care (hospice, assisted living), dialysis, smoking cessation and weight loss, blood transfusions, most flavors of oncology (cancer treatment), knee replacements, etc.
We need way more cost discipline in non-emergent situations. Changing the perception that all care is emergent might be the single biggest thing we could do to lower healthcare costs. It would let people see that there should indeed be a market in everything from X-rays to MRIs and we could finally have a sensible conversation about cost.
My optometrist wants me to try a new kind of contact lens. She cannot (or will not) tell me what they will cost. She can't tell me what they would cost me personally because she just doesn't know - all they can do is send a bill to my insurance company and find out how much they pass on to me. Which is essentially asking me to write a blank check. Nor can she tell me the sticker price on these contacts so that I can at least know the upper bound, because she simply does not have (easy?) access to that information - the billing department does. Probably I'll stick with the same brand I've been using for years, because at least there I can safely assume they'll cost about the same now as they did last year.
Similar story for my doctor offering me a flu shot while I was getting a checkup. She couldn't tell me the price, she didn't know the price, she couldn't get access to the price, etc. I usually go to the pharmacy, where they bill $30 and insurance covers it all. So I figured, "How bad can it be? And it'll save me some time," and let her give me the flu shot. Big mistake - the doctor's office billed $300, insurance (quite reasonably, TBH) only agreed to cover a portion of it, and I got stuck with a $200 bill.
There's two problems there. One is the lack of price transparency. The other, though, is the prevailing attitude - in both cases, the doctor's opinion, which I think is most everyone else's opinion, too, was, "Who cares what it costs? If the insurance covers it, it's basically free to you." Which just ain't true, especially for routine care stuff like this. The insurance company isn't getting their funds from some magical fountain of money. From a "see the forest not the trees" perspective, they will have to pass every cent of these costs (and more) on to me.
Both of these problems are solvable.
At the end of the checkup, a front-office staffer went on to Delta Dental’s web site, pulled up my record, and requested a treatment estimate. The answer was returned within a minute.
A few days later, I got a copy of the estimate in the mail for my records. I didn’t have any other dental events (which might’ve affected the estimate), so on the day of the filling, I paid the amount as part of the office visit. A few days later, I got the Explanation of Benefits for the procedure, confirming the amount paid was correct.
If I had chosen to, then I would’ve gotten all that over the web instead of on paper.
As far as I’m concerned, the dentist’s office is where I want them to be, in terms of billing processes. My eye doctor is able to do something similar, looking up lens & frame benefits etc. on computer, no I don’t have to be billed after the fact.
Charging 200$ for you to be healthy and able to work the full season while also avoiding being a carrier of a disease is absolutely terrible.
Springing costs on you that you never agreed to and aren't covered, should be illegal. you're literally being forced into a transaction you never agreed to.
My optometrist wanted me to as well. When I wasn't sure, he was nice enough to offer a prescription for both, so I could make the choice later.
That obviously doesn't work in every case of unknown cost, and doesn't really change your point, but I thought it was worth pointing out as a nice tip for anyone in the same situation in the future.
It's something I've seen in other comments here in the past, too.
In the US, only about 5% of healthcare expenditures are for emergency care. That means there is huge opportunity for people to shop around. The problem in the US is that there's no actual healthcare market, so shopping is impossible. No prices are displayed so customers can't make informed decisions, most areas are operating under healthcare monopolies, and most areas enforce a perverse set of laws that make it difficult for competition to enter the market.
Emergency care and care for the truly poor is handled with a different process.
It's like a restaurant that doesn't tell you the prices until after you've eaten, except it's the only way to get food.
Yes, there will remain distortions in the healthcare market, but at least there would be a way for people to make informed decisions.
Yet somehow in the US there is a market in food. And it is gigantic with way more options than most other places.
The food market is obviously not free because you need to eat. The car market is not free because a lot of people need to drive to work. The plumbing market is not free because sanitation is essential.
I won’t comment on the relative effectiveness of free vs centrally planned economies, just pointing out the logical fallacy above.
Healthcare isn't a "free market" because of massive information asymmetry (detailed prices for services, consumer education needed to evaluate information), high barrier to competition, and of course the literal product being your life.
Whereas cars are much closer to a free market. Sure, you might need to drive to work, or you can take a bus or other public transportation, ride a bike, walk, move closer or to another area somewhere this is easier to do, find a job that lets you work from home, etc.
If you choose to buy a car you can gather tons of information, pick a product to fit your specific budget, and end up with something that works everywhere. You can sell the product in the future. Contrast this with healthcare where you can't generally evaluate the information, have minimal to no pricing choices (especially in certain time sensitive situations), etc.
How do they seek out the "best place" if they don't have complete information on what it will cost? It would be like buying cars with no price-tags or MRSPs - yes, there will be good/prestigious dealerships with excellent staff who can tell you the technical details about the car that's right for you, but you won't know how much it will cost you until each component manufacturer sends you their separate itemized bills for months after taking possession of the car, and you can't take the car back (5x tires, 2x wipers, 1x engine, dealership charges, factory charges, line-assembly person 30 minutes @union rates, 1x battery, 348x bolts,1x suspension platform, transmission, etc). That is not a free market.
I am sure I could find a better deal on many medical purchases, but the cost to find them is significant. Purchasing the default/readily-available option is often the best bet because of the hours or days required to find a better solution. Spending a few hours to save $100 or a few days to save $1000 is a clear loss to me.
Cars are another extremely complicated product. Society has self-organized to create reputable sources of information on the quality of different models.
We don't need government restrictions and monopolization of spending to manage the complexity of the economy. Healthcare faces severe problems because of governemnt intervention, not despite of it.
With jobs, people with ample financial reserves can afford to shop around, but people who live paycheck to paycheck can't.
With food, well, it depends on how many different places sell food. Fortunately, there's usually no shortage of shops selling food. The market for expensive food is absolutely free, because I can say no and eat something cheap instead. But the market for cheap food does indeed not behave like a normal free market, as any economist can tell you: when prices for the cheapest foods go up, people will actually buy more, because they won't be able to afford more expensive food. And if one company had a monopoly on all food and set prices for all food high, it would not be a free market anymore, though that's true for any monopoly. Still, if it were a monopoly on something non-essential, people could still say no.
A free market requires competition. When no competition is possible, there's no free market. When there's an army of unemployed people desperately hunting for jobs, companies can afford to be picky and underpay them; there's no meaningful competition to hire those people, who can't afford to say no, because the only alternative for them is to be unemployed. This can lead to a situation where even people with a job have trouble making ends meet.