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Comment by hx8 | Hacker News Reader

I think there are a couple of pitfalls in looking at healthcare as a free market.

* People often have to make uninformed decisions or have decisions made for them in an emergency. This naturally puts them at an economic disadvantage in the market place. We consider it unfair because it's the sick, injured that are disadvantaged.

* We have strict regulations about ensuring access to health care. People aren't turned away in an emergency. Sick people aren't treated differently for insurance. There are thousands of other regulations we do that shape the 'free' market.

* Food is far from a free market, although it might look that way from the consumer standpoint. The government helps in both ensuring a strong supply with farm bills and giving $114B/yr in SNAP on the consumption side.

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I’ve never understood The concept of competition in insurance. Fundamentally it’s about pooling funds to average out risk. We had this nonsensical system where we socially subsidize the most expensive (Medicare) and privatize lower risk. It literally makes no sense. Alternatively is we simply pooled assets and introduced competition into care delivery, health maintenance, and care quality I expect that the system would be more efficient and effective.

> We had this nonsensical system where we socially subsidize the most expensive (Medicare) and privatize lower risk. It literally makes no sense.

If older poor people had to pay the true market price for health insurance that takes age into account they couldn't afford it.

If insurers weren't allowed to take age into account then younger people wouldn't buy health insurance for that price.

> Alternatively is we simply pooled assets and introduced competition into care delivery, health maintenance, and care quality I expect that the system would be more efficient and effective.

What incentive is there for the patient to choose lower prices if the insurance is paying for everything? What incentive does the insurer have to prevent claims fraud or keep administrative overhead in check if they can just pass on the cost in premiums and no one has any other option?

Alternatively is we simply pooled assets and introduced competition into care delivery, health maintenance, and care quality I expect that the system would be more efficient and effective.

That’s effectively what much of the rest of the wealthy world does via some form of socialized/nationalized system.

> That’s effectively what much of the rest of the wealthy world does via some form of socialized/nationalized system.

While these systems can be more efficient, the rest of the world isn't amazing either. Nationalized systems do much more central planning for healthcare delivery, so they have almost non-existent customer service culture.

You generally have no direct control over who your doctor or when procedures are scheduled. Furthermore, the concept of preventative care is nascent. Yearly physical? Nope. Routine Bloodwork? What is that? You only see the doctor when something is going wrong and you often wait weeks to months. (unless you pay for private health insurance). I literally know of someone with cancer treatment follow up that they needed to hammer the phone lines to get scheduled.

Finally, most international healthcare is effectively subsidized by the US healthcare consumer. Firstly, the majority of global research funding in healthcare comes from the US. Secondly, US consumer (forcibly) pays 5x to 100x what international systems pay for procedures, medicine, technology. As a result, almost every major technological innovation in med device or pharma is either produced in the US or delivered first to the US market by foreign companies.

Nationalized systems do much more central planning for healthcare delivery. This results in a byzantine bureaucratic nightmare where most innovation goes to die. International healthcare systems effectively delegate the implementation risk to the US and wait to see (sometimes decades).

Note: In my experience, the healthcare workers and administrators all are trying to do the right thing and working really hard, but the systems they operate in are generally broken.

Bottomline, there is no free lunch, everything sucks.

So just kill the old people then?

Yet prices would come down if insurance companies actually had to compete.

1. I suspect the vast majority of engagement (and, spending) with the medical industry is non-emergency care. At least not emergency care required in the next hour or so. There are edge cases, but even considering most of what I've seen going to the emergency room there has been time to choose which hospital to head for.

Basically I think this is over-weighting the importance of emergency care. I don't have any stats on hand, but people entering the hospital system at ultra-short-notice is quite rare in my experience compared to having a bit of time to think. Most healthcare engagement seems to be for planned consultation, planned surgeries, emergencies but with hours to spare and then urgent emergencies. In about that order of frequency, and heavily weighted towards the first few cases.

2. People are more than capable of figuring out which of two options are cheaper. The ability of consumers to reject goods over tiny price differentials is legendary.

3. If people aren't up for the challenge of figuring out what to do in an emergency, then in a fair market you'd probably find the insurer starts to step in and assist. If the insurer has to compete for business, they have a very strong incentive to make sure their customers get good and cost-effective care.

4. And on food markets; those are distortions to the market, not limits on it's freedom. A free market can be distorted with subsidies and it is still free. The important factors are whether new providers can enter the market and whether they are allowed to compete on price and service quality.

No one knows how much care costs. Insurance companies and providers hide the real Costa when predicting in the guise of "information security" which makes choosing a facility on price literally impossible.

Time isn't a factor, if you have insurance that covers it you rarely if ever know how much it will cost.

CMS requires hospitals and health plans to publish price transparency data and give consumers tools for price estimation.

https://www.cms.gov/priorities/key-initiatives/hospital-pric...

https://www.cms.gov/healthplan-price-transparency/consumers

Vast majority aren’t in compliance, and the data they do publish is essentially useless. Lots about it online, but a reasonable interview here https://www.wbur.org/onpoint/2024/02/13/the-fight-for-transp...

re 2) People will reject more expensive options if and only if they have the time and energy to reach the point where they know what the price differential is.

Almost no medical practices in the US will tell you what the price is until after you've had the service there, and that price might even vary across multiple trips depending on how your insurance processed the claim _that_ time. (Ask me how I know.)

So you would need to schedule appointments and have the entire medical procedure done multiple times to have any price visibility, and even then, there's lots of nonsense around things like doctors operating in hospitals but billing separately, which completely obfuscates the end cost to someone.

People can and will choose the cheaper option, but I personally, as someone who has limited time, cannot afford to go through totalling all the bills for having the same procedure done twice every time, with all the months of back and forth for setting up being a new patient, scheduling things, being lied to about the doctor being available for the consult, showing up and having the staff gaslighting everyone about how it's not a problem on their end, everyone angrily waiting in the waiting room clearly got their appointments wrong, even if you have the reminders written by the staff at your pre-actually-seeing-the-doctor visit in hand showing their system is wrong...

It's incredibly exhausting and involved to visit a new doctor for even the most trivial things. Most people cannot afford the time commitment to do that multiple times even if the procedure is something where it's not a one-off or urgent.

Yeah. It is a comment talking about treating healthcare as a free market. The US doesn't treat healthcare as a free market, so none of the predictions or observations in that comment apply to the US.

The US seems to have some sort of racket going on in healthcare. What I've heard about their regulation makes sense if interpreted as a fairly basic system built by lobbyists to extract money from people, using emotional blackmail to break up political opposition. Otherwise it seems a bit silly.

"Healthcare can't be a free market" is an assertion rooted in sound logic going back at least to Adam Smith.

Making it more transparent won't change it.

"Emergency care can't be a free market" is a reasonable statement provided the customer is the patient and not e.g. an insurer with a contractual obligation to meet a particular emergency response time, who could contract with different emergency services providers in any given area in advance and secure lower pricing by playing two providers who could each meet their emergency response requirements against each other or threatening to enter the market themselves.

"Joint replacements can't be a free market" is simply nonsense.

Medical practices in the US are now required to give uninsured patients a good faith estimate on request.

https://www.cms.gov/medical-bill-rights/help/guides/good-fai...

Health plans are now required to give comparison shopping tools to their plan members. Those can be difficult to use for patients who don't understand the system, but it is at least a step in the right direction.

https://www.cms.gov/healthplan-price-transparency/consumers

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