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Comment by dbcfd | Hacker News Reader

Nope, that's capitalism. Someone (the insurance) is willing to pay that price.

It'd only be fraud if the government was paying for it.

[Edit]Some hate against my comment. For those that fail to understand...

It isn't fraud if you go to a gas station that is charging $0.10 more a gallon, and fill up there. It's fraud if you pay for that gas, and its water. The insurance is still buying the same drug, they have just chosen to negotiate a price that is higher with one hospital than another. They have their own reasons for deciding that price.

Likewise it would be fraud if the government was paying for it, since they have set rates. To achieve a higher payment would require billing them for some other product.

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Taking advantage of the predicament of others is not capitalism; it is price gouging. It would be one thing if the consumer were able to compare prices and other aspects of the product and make a choice based on the consumer's values (of which price may not be the most important thing). This is a bit more like a gas station charging 10x more during a hurricane evacuation.

Real world example:

Scenario 1: A gas station with bags of ice sells out their inventory of ice and beer to a local fraternity, so they can keep their beer cold while they're on the road.. Then a diabetic guy comes in, looking for a way to keep his insulin supply cold. Too bad for him, the ice is gone.

Scenario 2: That gas station jacks up the price to $100/bag during the evacuation. The frat guys aren't willing to pay that much for cold beer, so they grumble and just buy some bottled water instead, since that doesn't need to be cold to drink it. The diabetic guy comes in looking for ice. He too grumbles at having to pay $100, but his insulin supply will now stay fresh.

This is a little contrived, but I think it illustrates that even in extreme cases, the system of pricing in a free market allows each participant in the market to communicate his priorities and his ability to substitute other goods. My example shows how the frat guys want beer, but not enough to pay that huge amount -- which leaves the way open for the diabetic to show that the ice is really, really important to him.

The itemized bill is basically a convenient fiction; you can't really compare items between hospitals, only totals. It's between the hospital and the insurance and it's all but an accident that you even receive it.

The same effect explains the semi-mythical $75,000 toilets in government procurements; yes, the government may often over pay, even somewhat obscenely, but typically those sorts of stories are because of accounting doing things like dividing the bill evenly according to every item. Yes, you got a $75,000 toilet, but you got a $75,000 MRI machine on the "same bill".

Price gouging is an aspect of capitalism. Demand goes up, price goes up. Without market interference, this should force demand down.

Health care can't be forced down by price (at least, life saving health care), so you either have to stop providing care to those that need it but can't pay, or pass along the costs to others.

Health care costs can be forced down. The supply of doctors, nurses and other health professionals can be greatly increased (with free medical education or immigration, for example). Medicines can be mass produced by walking around (or over) copyrights and patents. Increasing competition (making it easier to switch provider, building more hospitals and facilities, etc. All these approaches have been tried, many of them are still working and result in lower costs without killing everyone.

I'm not saying those approaches don't have flow on effects, because they do but they can be used to lower costs. Don't assume price cannot be controlled by governments or industry, because it can be, and is.

Yeah, that's why I said they can't be forced down by price. The supply/demand side is a whole other issue.

Medical school is entirely too expensive, which limits doctors going into general or emergency care, which causes further strain on the system.

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