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Comment by HarryHirsch | Hacker News Reader

> I dream of a day when I can walk into an area which offers 'services' and be offered a pricing chart.

I don't want to be offered a pricing chart when I have a kidney stone or get violently mugged. When that happens I don't want to have to deal with that sort of thing.

The free market in medicine is plain weird. Everyone needs the doctor on occasion, and everyone needs tyres on their car. Both things are pretty standardized, medicine is an established science, and tyres just need to have the correct dimensions and speed rating.

You show up at the doctor's, and they will treat you according to established procedure, most patients do not have complex illnesses, and you show up at your mechanic, and they will put new tyres on. It's very simple.

Yet on TV you see many many more ads for the local hospital or medication for condition X that you see for tyres. How come?

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The free market in medicine is plain weird

Says you. Time and again, Lasik surgery and cosmetic surgeries not covered by insurance or hindered by over-regulation have shown us that transparent pricing and competition work to make those procedures more affordable -- just like these forces work in other markets.

The State has perverted the medical market for more than half a century and you're just used to seeing it in its current screwed up state.

Lasik and Cosmetic surgeries are minimally invasive elective procedures that can be researched months ahead of time, it doesn't make much sense to compare them to major surgeries or even severe infections.

Yeah, so is a vasectomy yet when I went in to get a price on a vasectomy from various doctors, none of them could tell me how much one would be despite each doctor's having performed thousands of them.

Doctors, hospitals, and insurance companies play these obfuscation games in order to maximize revenues and profitability.

Removing unnecessary actors from the equation like employers and making pricing publicly visible would do wonders to reform the system.

The fact of the matter is that most surgery isn't emergency surgery. Most procedures can be researched and cost compared.

Even for semi-emergencies, illumination of pricing and other vital information would allow better decisions from consumers who at least knew the reputation of hospitals/providers in their area. I don't know how much a banana costs just now, but I know that if I need a really inexpensive one of dubious quality I can go to the super WalMart down the road. If I want a super fresh one that's probably more expensive, I can go to Whole Foods. If I want a "good enough" mid-price one, I can go to Publix.

I'd look at good old supply and demand before reaching for "over-regulating is distorting the market." Demand for Lasik and cosmetic surgery is much more elastic because they're not life-saving or otherwise necessary procedures. Meanwhile, supply is relatively higher because they're relatively cheap procedures to provide. They can be done in outpatient centers instead of hospitals, usually don't require general anesthesia, etc.

Medicine doesn't really follow supply and demand. If you install more CT or MRI scanners, you do more scanning. Demand follows supply. This is not helped by it only rarely being the patient who pays directly (usually insurance or taxpayer). People tend to do what their doctors suggest and go where their doctors say to go. There was a great article on this I read about a year ago. I thought it was in the Economist, but can't find it. Wikipedia is the best I can find sorry. http://en.m.wikipedia.org/wiki/Supplier-induced_demand

I believe the article you're referring to is Steven Brill's 26,000 word opus "Bitter Pill - Why Medical Bills Are Killing Us", which appeared in the U.S. edition of Time Magazine in March of this year.

In it, he makes a specific criticism that not only do hospitals that purchase diagnostic scanners tend to make greater use of it, but that quite often, an above-average count of referrals to diagnostic imaging centers (which are places which only do MRI and CT scan work) are one of the leading indicators of out-of-whack pricing for a given hospital.

Patients still reflexively follow their doctors orders. So if their doctor says an MRI or two is required before he proceeds with treatment, the patient will happily get the MRI done.

Changing the ingrained behavior of patients in this regard is a must if we expect to be able to control this particular aspect of medical cost increases.

sbercus10 has done this thread a huge favor in his comment (https://news.ycombinator.com/item?id=6015542) where he provides the following link to a PDF of Brill's Time article:

http://livingwithmcl.com/BitterPill.pdf

Not only that but my observation after working for 10 years in radiology is that many other departments either outsource diagnosis to radiology or at least want a study done. That way in case there is a lawsuit the finger can be pointed somewhere else. While this effect is hard to quantify it is definitely encouraged by hospital executives since radiology can be a highly profitable department.

I work in radiology too - interesting that we have come to the same conclusions for different reasons. You can't sue here (at least not easily) as there is a system of compensation for blunders etc and yet supply really doesn't follow demand and pricing is arbitrary.

Thank you. I saw that when I did a google but skipped it as I was so sure it was The Economist.

Neither Lasik nor cosmetic surgeries tend to be major issues of life and death, nor do they tend to occur in emergency situations where an informed decision may not be possible.

Free markets and transparent pricing that work require that there not be major information asymmetries between supplier and purchaser. If I'm in the hospital with an emergency or critical condition, I probably don't have the option of fully researching or understanding my options.

You don't think people with cancer research which clinic to go to? I know if I had cancer I dam well would.

More to the point, you will spend a great deal of money to extend your life, and there is no less-expensive alternative (at least not published). Lasik has a very low-cost alternative: glasses.

I sure as hell did. I didn't care about the cost, but I sure cared about the outcome.

And even in my case, time wasn't a huge factor. From diagnosis to pre-surgical chemo and radiation, was over a week. And surgery was a month after that. Plenty of time to weigh cost versus performance.

I wasn't talking specifically about people with cancer who have plenty of time to research which clinic is most cost effective.

I stated in my post: "If I'm in the hospital with an emergency or critical condition, I probably don't have the option of fully researching or understanding my options."

Just because situations exist where you have time to research, doesn't mean you always have time to do so. And a healthcare system needs to take that into consideration, especially when the consequences can be life or death.

Point taken. However, keep in mind that even when it's an emergency, you often have choices. For example, if you just had a heart attack, they will often stabilize you then talk about further options.

I agree that no one will do a price-check when they are on death's doorstop, but there are many instances where doing a price check for medical procedures is possible.

Fair point :)

It's also important to consider that Lasik and cosmetic surgeries are elective procedures characterized by elastic demand. Having a trauma surgeon remove a ruptured spleen, or being treated for a heart attack, are situations where demand is completely inelastic.

One might shop around for the best way to spend a spare $10,000 for an eye lift, but who can be expected to shop for an economically satisfying deal while in a life-threatening situation? Reducing regulation would not change this essential qualitative difference.

Doctors running all over the ER and into operating rooms plays well on TV... but in real life most surgery is scheduled days or even weeks ahead of time.

Even in emergencies, if you knew the reputation of a hospital and were responsible for paying your own bills, you'd likely go to the one that had the price/performance reputation that you were most comfortable with.

While emergency care needs to be taken into account, most medical issues are just not emergencies, they are merely pressing. Even super expensive, life threatening ones (ie, a cancer diagnosis) allow for a bit of shopping around, second opinions and such.

So if most surgery, and near all outpatient procedures are not-pressing and possible to shop around for, why can't I know how much it costs ahead of time?

> ... being treated for a heart attack, are situations where demand is completely inelastic.

Not true. Even in a sprawling place like Oklahoma City, most of the middle class lives within safe transport distance of several hospitals. It would be perfectly rational for them to tell the ambulance crew to drive another five minutes to save $25,000.

Most emergencies have plenty of time for price shopping.

>> ... being treated for a heart attack, are situations where demand is completely inelastic.

> (...) It would be perfectly rational for them to tell the ambulance crew to drive another five minutes to save $25,000.

I wouldn't want to be in your care. If you're having a heart attack you want to get into a hospital ASAP. And that's coming from somebody that took a taxi to the hospital after being stabbed in the chest.

Most heart attacks are small and not immediately life threatening. Some are dangerous but they tend not to be survivable anyway.

Most Americans wait over two hours to seek care for a heart attack! Cost is a big reason why—even a false alarm can cost several months of income. If people had the privilege of taking the time to comparison shop and drive out of their way for a good deal, they would probably get care faster.

I like prices before the service, even health. I think the not knowing the price aspect keeps many people from services they need and makes people do services they might not need based on not knowing the price.

To live in a capitalist society and accept a service without knowing the cost is a bit scary and stressful. Yes it is your health and must be paid attention but so is maintenance on your house and vehicles and you'd never agree to some service on your house or vehicle for its health without knowing the price. You want at least an estimate before going through with it with that provider.

Contractors for repairs around the house as an example, they vary in quality and price, it is better to make a smart decision than one that is brash and payment is determined after the fact. Granted health costs are harder to predict and extremely important but the added stress of not knowing the cost I think is actually bad for health.

I hear this complaint often, but it's rather short-sighted. The majority of medical procedures are not 'critical' operations, as in dealing with unexpected and urgent medical conditions (car accident injury, broken bones, gunshot wounds). Most are scheduled operations planned days, or weeks in advance. These operations are the ones being targeted for shopping around for the best price. The unexpected, extreme injuries are why people need to have a high-deductible insurance policy, to cover such cases.

I see commercials for tires all the time. Michelin, Goodyear, and Firestone, all saying how their tire is the best. I also see a lot of commercials for places like Aamco, National Tire and Battery, and Just Brakes, saying they have the best prices for tires.

> Yet on TV you see many many more ads for the local hospital or medication for condition X that you see for tyres. How come?

Tires are a simple, well-known product, whereas medicine is not. Drug discovery happens to be a billion dollar process that often results in failure. All of the low-hanging fruit have been taken, and the remaining solutions all require intense research. Though a compound or antibody or whatever might be cheap to replicate once elucidated, you still have to pay the price for the process.

Marketing then directs dollars to product. Drugs often target a very specific healthcare niche, which requires massive education campaigns. Everybody knows that they need tires. Not everybody knows about the existence of a novel drug that solves a medical problem that only a subset of the population encounters.

More importantly, tires are low margin products, newly patented drugs are extremely high margin products.

The higher the margin a product is, the more valuable it is to market.

This must a a US thing - I have never seen an advert on TV for a healthcare clinic of any sort that I can recall. I saw a poster at a cinema recently for a medical clinic, which I remember as it was so unusual.

They are actually quite common in the US. You'll often drive by billboards on the freeway where hospitals claim "No more than a 30 min wait in our emergency rooms!"

I personally think it's a good thing.

Its also quite common in Hong Kong.

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