How do you explain other free markets that obviously deliver quality products at low prices? I don't feel gouged when I buy a television, a cell phone or lumber at Home Depot.
You might if you were carted into a Home Depot unconscious on a gurney, handed a non-returnable light bulb and stuck with a bill for $6,844.
Plans are deliberately priced to be confusing to compare prices; plans are frequently updated to cause people to be stuck in win-optimal contracts; consumers are gouged on some items (see bizarre cost of sms in UK); and companies collude to defeat market mechanisms - see the use of area codes in auction bids as a method of communication when frequencies were auctioned off.
I'm a bit confused how anyone using a cellphone could chino otherwise.
We choose between what we have, not what is the best or the right thing to choose.
So because in this day and age it's convenient to have a cell phone, the choice to do without one is not a free choice. And because one doesn't have an unlimited number of carriers to choose from, that choice is also not a free choice.
I'm using free choice in a different way, perhaps. To me, unless someone puts a gun to your head (so to speak), every choice you make is a free choice. That doesn't mean the choices are without consequences, or that they are necessarily good for you.
So you are free to not choose one but the consequences are huge to most people in fact to big.
It's not a rational choice as the free market philosophy claims, its a choice thats primed by whats considered desirable at any given time.
cell phones opportunistically exploit that innovation.
the fact that you get great hardware for a tiny monthly cost is just proof that they're over charging most people for something else.
You are getting fleeced!
Those are examples of designed markets, even though there are accompanying technologies, as is the current mobile telephony business. Now guess who stands in the way of implementing those changes?
Most hospitals will not, however, tell you how much a procedure costs making shopping around for non-emergency procedures impossible. Combine that with the usual low deductible health insurance plans and you've driven out any incentive for the consumer to even attempt getting a good deal.
Home Depot would happily gouge you if they could form a cartel and gain enough control of the supply chain.
This is, after all, the reason we tend to avoid government monopolies if we can avoid it. It's not just that government is inefficient, it's that monopolies are inefficient, whether "private sector" or otherwise.
There's nothing peculiar about medical supplies that make them easy monopolized. Pharmaceuticals and medical devices (neither of which are the topic of the original post) enjoy patent protection, but there are often many out-of-patent substitutes available.
Doctors are limited, but that is primarily because the state makes it illegal to practice "medicine" without either being a doctor or being supervised by one. Much other scarcity stems from this one, e.g. limited insurance options because it's difficult to create a physician network.
There are absolutely free-market-advocates out there who would remedy price-fixing problem by allowing self-taught people practice medicine. That should increase enough market-entrants to break any cartels we see.
I'm not one of those advocates, because I see some sort of quality guarantees as helpful in this arena. But there are lots of aspects of the healthcare market that could benefit from more market-like behavior, whereas there are other aspects which could use less (i.e. more regulation). We need nuance in order to make progress.
I do very much believe more consumer choice for non-urgent care would be helpful, i.e. lab choice, hospital choice, a menu of drug options (ratings, side effects, out of pocket cost). This is controversial for a number of reasons, but after considerable, I believe this would have significant positive impact on the overall efficiency of healthcare.
A record fine for a CRT price-fixing cartel that ran from 1996-2006:
http://www.bbc.co.uk/news/business-20608949
And an LCD price fixing cartel that ran at the same time:
>When she became pregnant, Ms. Martin called her local hospital inquiring about the price of maternity care; the finance office at first said it did not know, and then gave her a range of $4,000 to $45,000.
http://www.nytimes.com/2013/07/01/health/american-way-of-bir...
Even in the suburban areas I've lived in, for us that meant a "selection" of between 3-4 potential clinics, not exactly a very wide choice (and completely based on where I lived so it could very well have been that I would have been selecting from 4 of the worst clinics in the whole state).
When my wife was pregnant, at some point we got billed several thousand dollars for a procedure the insurance company refused to cover. She called the insurance co., and they (I think) recoded the procedure to something that cost a couple of hundred dollars and was covered to boot.
It seemed like there was a bunch of new employees on both sides who were learning as they went (and pressing random buttons). So forget in advance, pricing was hard to find out even post facto ;)
If you buy a bad TV you can return it and provide a bad review, so next time you shop from a better store. If you buy a car and it turns out to be a piece of shit, you just lost lots of money. It will take you years to recover and save for a better, but you still can.
You can't get your life back, you can't get your health back sometimes, you can't return your dead child back. That's the problem.
free markets are really good at efficiently allocating resources in certain types of markets, and not so good in other types of markets
You're just convinced it's not.
Some very high-end custom-designer fashions might be excluded, but if you're buying off-the-rack (or mail-order/online) clothing manufactured in mass, you're buying a commodity, in the sense of a largely undifferentiated item. The label is the _only_ item of distinction (and not even that when you're getting grey-market goods).
Incidentally, look up "commodity" in your dictionary, it doesn't mean what you think it does.
A commodity would be silk, or cotton - the raw fabric used as base materials. What you then do with those materials to increase their value directly changes them from commodities into products.
Put another way - gold is a commodity, as is silver. Jewelry, however, is not. It can't be a commodity if the material has been changed into a diversified form to increase its value - it has to be raw in order to be a commodity.
Check your dictionary.
Billing the saline to you is an accounting device. It has no meaning--it's just a component in a service that isn't a commodity at all.
There are dozens of options and hundreds of styles and the end customer can try them on and decide what works for them.
When you are at the emergency room and are given treatment with no opportunity (and in most cases, ability) to compare the various treatment options, then, yes, you tend to expect the caregiver to not mark something up 10, 25, 100X.
This isn't true at all, not even from a standpoint of brand and marketing. Most people cannot tell the quality of a garment by comparing alike items. Most people are not aware of fashion trends outside of what they see for sale at stores in their price point.