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Comment by BurningFrog | Hacker News Reader

And what's the root cause of this absurd arrangement that doesn't exist in unregulated markets?

These things happen all the time in real world free unregulated markets. The seller looks at you, tries to understand how much you can afford and what are your alternatives right then, and to get the highest price possible.

If you are desperate and your life is at risk, they can literally strip you naked - just see how many unscrupulous people become rich during wars.

When you are in a medical emergency, and you need a treatment right there and right then - no time to shop around - why should an unregulated, shareholder value maximising business, not extract from you as much as you can afford?

>When you are in a medical emergency, and you need a treatment right there and right then - no time to shop around - why should an unregulated, shareholder value maximising business, not extract from you as much as you can afford?

In a free market, you'd also have choice via competition to drive that price down. Right now, hospitals can literally veto their competition by claiming "there isn't enough demand to justify another hospital in this area". So bing, no new hospital, no competition.

And of course, this assumes your provider is out to screw you at every turn. This turns out to not be the case for obvious reasons; your provider still wants your business in the future. In the case of a single hospital/provider (a la regulation) they've got your business no matter what.

Competition is a key force in markets, and regulation in the medical industry provides huge barriers to competition.

> In a free market, you'd also have choice via competition to drive that price down

Not really though. Like, if I am having a heart attack the correct answer to "Which hospital do I go to?" is always going to be "The closest one equipped to handle it". Well technically the one I get can to the fastest that can handle it but you see my point.

This kind of choice via competition would work for things like optometrists and GPs (assuming you live in an area with more than one general practice) but just plain doesn't for emergencies.

Yeah, the moment you have a heart attack is not the time to start comparison shop. This is the argument everyone always brings up all the time, because it's so obvious.

An because it's so obvious, people will want to be prepared for it. By having insurance (real insurance, not the bizarre "health insurance" construct we have today), or subscribing to some service like you do for when you car breaks down etc.

I'm not sure what exactly would happen, but I'm certain it won't be that people will just never think about this until they all, one by one, have a medical emergency and have to unexpectedly pick a hospital on the spot.

Right, but what I'm saying is even if I did my comparison shopping before hand it doesn't matter because unless I stay within a certain radius of the hospital I've chosen I can't then it is kind of moot.

Because if hospital B isn't my choice but I'm closer to it when the emergency happens I am going to hospital B

> These things happen all the time in real world free unregulated markets. The seller looks at you, tries to understand how much you can afford and what are your alternatives right then, and to get the highest price possible.

But that is not at all what I'm asking about. You clearly didn't read the post I commented on.

If my basement is flooding and I sound rich and dumb to the plumber I call, I might get quoted triple the price of one of his regular customers, sure.

But there won't be a Plumbing Benefit Manager company as a middle man that has a "negotiated special hourly $800 rate" with the plumber so I don't have to pay the "official $9340 rate".

That sort of complex plunder reeks of regulation to me. I can't imagine how it arises. Which is why I asked.

So what looks bad to you isn't the fact that a medical company will try to get all your money when you're most vulnerable, but the fact that they need to resort to a middle man to be able to do that in the face of regulation? Cool.

Find me a loosely regulated market where prices fluctuate on the same order magnitude as they do in medical.

Gouging related to temporary situations is a laughable comparison.

Find me another market where people need to urgently make choices that affect their life and death, or that of their loved ones.

The comparison isn't laughable at all.

That herring is so red it may as well be a cooked lobster. The overwhelming majority of medical care is not urgent care. The overwhelming majority of medical costs are costs that can be foreseen long enough in advance to shop around. Even if you think you might have skin cancer you're still in a position to choose where you go to get your tests.

Hospitals won’t tell you the costs of treatment ahead of time, even for easily predictable items like baby delivery. It’s impossible to shop around.

https://youtu.be/Tct38KwROdw

Yes. And that's exactly the problem I'm complaining about and challenging you to find an example of in a loosely regulated market.

There’s no regulations preventing them from quoting prices to you.

There's regulations that prevent them from being undercut by entities that are willing to have transparent pricing. The problem here is not lack of regulation. It is a lack of competition. Regulation forces providers to adopt a particular business model and that model allows the kind of pricing shenanigans we see. At the end of the day everything comes down to dollars and a lack of pricing information means it is not possible to compare like services across providers. Being able to compare supposedly interchangeable goods/services is a core part of the free market and it is missing from healthcare in the US.

Medicine and testing isn't available on an actual physical shelf and the prices aren't advertised.

Send out a flier in the Sunday newspaper and the margins on medicine will reduce to as close to zero as possible just like food.

Fortunately there’s a natural experiment of precisely this: drug ads targeting consumers were illegal until 1985. The result has been an explosion in drug prices; the ads were used as a way to try to go around any pricing constraints.

I worked for a time in pharma and believe me direct to consumer was seen as a boon to profit margins, not a constraint.

I'm talking about grocery store ads selling baby back ribs for 2.99/lb not "got milk?" ads by the milk board.

Public transparent pricing that will drive consumers to pick and choose their health care providers would do great things for the ridiculous situation we are in.

That is an entirely predictable result when you have direct-to-consumer advertising but not direct-to-consumer supply. You just get all the demand the pharmaceutical companies can manufacture without any competition on the supply side to drive down prices.

I see ads for drugs.

But I never see ads for cheap drugs.

So I think you're talking about different things.

As I understand it, employer provision of health insurance originated as a way to sneak around legal maximum wages (during WWII?).

Sounds about right. Extending this, and considering employer-provided health insurance as effectivly a tax on your income, and suddenly the US is heavily taxed.

I'm sure this analysis[0] has plenty of critique waiting to pounce, but it's something to consider.

[0] https://www.peoplespolicyproject.org/2019/04/08/us-workers-a...

The evidence from health care systems in other countries suggests that this type of excessive rent seeking does not exist in regulated markets. It’s the lack of regulation in the US that is the problem, not the other way around.

I think a more nuanced explanation is that the problem isn't the amount of regulation but the nature of the regulation. If we simply add up all the rules, healthcare is probably more regulated in the US than anywhere else in the world. The difference is that in other countries the rules are designed with the intention of making healthcare accessible to everyone. In the US, the rules are designed to maximize profits.

A less nuanced explanation is to agree that in an unregulated market, this type of excessive rent seeking would not exist. The old and sick would simply die in the streets. (Actually that's not quite fair since in an unregulated market we wouldn't have streets.)

Policies can always be improved but the relationship between stronger regulation in health care and more access (lower cost) is pretty robust across the world. Nobody openly argues for policies that will lead to higher cost and less access.

Health care is an extremely regulated industry in the US. Possibly the most regulated one, though it's hard to come up with a way to measure that.

Obamacare alone added 20,000 pages of regulations.

US healthcare lack of regulation? Good god.

Price insensitive customers. You can get away with a lot when the alternative to buying your product is pain, suffering and/or death.

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