Why can't the market deliver healthcare at a low cost?

Discussion in 'Political Opinions & Beliefs' started by ProgressivePower, Jun 10, 2019.

  1. ProgressivePower

    ProgressivePower Active Member

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    I have been politically confused for a number of years, trying to figure out, where my true beliefs, more importantly economic beliefs stand, and while yes, I may have been on the left for sometime, I was always open to other ideas and could see other arguments from legitimate, principled people on the right, like at the Mises Institute, or other free-market libertarian organizations.

    While I still somewhat am holding on to being on the left, I am slowly starting to see a shift towards more free-market, sound money, principles, which I believe can indeed increase living standards for everyone, including in healthcare.

    One of these issues is healthcare. Here are two videos, which seek to determine why healthcare costs so high in the US, both from an Austrian economic perspective. So I will pose this question, if the market can provide great quality services, in other areas like TV's, phone's, camera's, gadgets, etc.. at a low cost, why can't it do this with healthcare?

    Right now, I do not believe we have true capitalism in healthcare. What we have is crony capitalism, and corporatism, which institutes regulation, and subsidies, and special favors to healthcare companies, bidding up the cost of healthcare. Both the left and the right agree on this, but with varying analysis.

    But what I see from the left, is not solid economic reasoning on why costs are so high, but merely just a broad brush, stating that it's 'capitalism, free markets, and rich people why costs are so high' all the while not having solid economic examples to show how this is the case, which I do see from libertarians.



     
    Last edited: Jun 10, 2019
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  2. ProgressivePower

    ProgressivePower Active Member

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  3. mitchscove

    mitchscove Well-Known Member Donor

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    Went to my ophthalmologist today. He doubled his staff to feed the software he was forced to buy for Obamacare. It was sad to watch the disaster Obama foisted on his office and the medical industry as a whole. He's now stuck with that trash years after Obama left office. Adding to the problem was the expansion of Medicare. When people are allowed absolutely free access to medical care, the phony demand drives prices up for everyone else

    More proof that socialism can destroy free markets.

    Look at University costs. Uncle Sugar created a huge demand for college educations. Every little bed wetter signed up for Women Studies, African American Studies, LGBTQ Studies. If you can explain why we create demand for space and faculty at universities for garbage degrees that add no value to society, but drive costs up ,,, I'll go along with your premise.

    I haven't even addressed public sector union benefits that politicians could give away without suffering the negative effects of bankrupting their cities and states ,,, since the bill for stuff like pensions don't come crashing down until the politicians are long gone.

    None of the problems have anything to do with free markets.
     
  4. fencer

    fencer Active Member

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    There are relatively low cost alternatives in the U.S. healthcare industry now and they are increasing. This link (https://www.dpcare.org/) has a map that you can use to find a direct primary care physician for a very reasonable fee. I just did a search and found a clinic that cost 79.00 dollars a month for someone my age and includes all regular office visits and treatment, annual physicals, unlimited access, telehealth visits. They're also associated with sedera health cost sharing which provides cost mitigation for care that the direct care clinic doesn't include. Direct Primary Care clinics don't use insurance and can therefore provide their services for drastically less cost than traditional insurance driven care.

     
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  5. tecoyah

    tecoyah Well-Known Member

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    Why can't the market deliver healthcare at a low cost?

    Health Insurance Companies and Corporate Greed.
     
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  6. Reiver

    Reiver Well-Known Member

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    Health care? The idea of a free market is nonsensical. Instead, we have to talk about a spectrum over the extent that market forces hold. There are then two types of analysis.

    First, there is international comparison into efficiency. Enabled by techniques such as stochastic frontier analysis and data envelopment analysis, that finds that national health care analysis is more efficient (i.e. for a given level of inputs, it delivers greater outputs). That will reflect issues such as economies of scale.

    Second, there is case study analysis offered by Britain. Its national health care system is being slowly privatised. The effects have been spectacularly bad. Contracting out of cleaning led to a significant increase in infections. Care has been replaced with 'race to the bottom' cost minimization (e.g. replacement of one to one care with call centre approaches). If you want to minimise amenable mortality problems avoiding market forces is a must.
     
  7. ProgressivePower

    ProgressivePower Active Member

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    That's the thing. Obamacare is literally corporatism. It's the government and corporations getting together, which gives nothing but a disaster, and ridiculously high prices. Even people on the left, who I consider principled, and not partisan washington hacks, even they called this a supposed 'step in the right direction.' Sure more people are covered, but they are covered at higher costs.
     
  8. Quantum Nerd

    Quantum Nerd Well-Known Member

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    There can be no true free market in healthcare for two reasons:

    1) The customer (patient) has no choice whether or not to buy the product (health service), usually the decision is made for them by medical events. Also, when health services are needed, especially in emergency situations, the customer cannot comparison shop to select the best or cheapest service.
    2) The supplier cannot turn the customer away, even if the customer cannot pay. The provider is FORCED to provide health service. How do they solve the problem? By billing customers who can pay for the bills of the customers who cannot pay (i.e. socialism).
     
    Last edited: Jun 10, 2019
  9. Chuck711

    Chuck711 Well-Known Member

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    America is the Worlds Greatest Country ? Not if Judged by Heathcare.

    America comes in Last in Quality and Life Expectancy yet the most Expensive in cost of Healthcare.

    Probably because we don't put a Value on Quality of Life.

    Education levels our our country are directly related to this problem.

    What do you expect when when our tax structure is among the Lowest ?

    We need to move away from employer based healthcare .................... this puts our companies at a disadvantage

    World Taxes.JPG
     
    Last edited: Jun 10, 2019
  10. 61falcon

    61falcon Well-Known Member

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    There are NO FREE MARKETS!!!All markets are FIXED,someone ALWAYS has their thumb on the scale.
     
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  11. ProgressivePower

    ProgressivePower Active Member

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    But what if true competition brings prices drastically down? This would make it much more affordable to everyone, and allowing for increased competition amongst more companies, which is certainly not the case now,.. this would continue to make this more of a possibility, wouldn't it?

    If markets are unable to enable adequate healthcare access, I would support a universal multi-payer system like Germany, which doesn't get rid of competition entirely, but I would need some convincing first.
     
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  12. 61falcon

    61falcon Well-Known Member

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    The leading cause of bankruptcy filing in the USA MEDICAL BILLS!!!
     
  13. ProgressivePower

    ProgressivePower Active Member

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  14. fencer

    fencer Active Member

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    I didn't have a choice to buy a car, employment requirements made that decision for me. That didn't preclude me from buying the car I wanted. If I'd waited until the day I needed the car my choices would have been much more limited and my cost much higher. Does that mean there isn't a free market in cars?
    This point is merely a policy. There is no reason health care providers should be forced to provide services.
     
  15. fmw

    fmw Well-Known Member

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  16. Eleuthera

    Eleuthera Well-Known Member Donor

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    That is the long and the short of it. Our insane model--physician and patient relationship crushed and distorted by insurance companies--is completely stupid and expensive. When an insurance company gets one-third of money spent on healthcare, it's going to be expensive.
     
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  17. fencer

    fencer Active Member

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    Regardless of the imputed costs of a product (taxes, regulations, price restrictions, etc.), if the buyer and seller are free to make the exchange on a voluntary basis, its a free market. Someone's thumb in the scale is irrelevant if the transaction is voluntary.
     
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  18. fencer

    fencer Active Member

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    And the answer is direct primary care, cutting out the insurance companies and corporations.
     
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  19. ProgressivePower

    ProgressivePower Active Member

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    Another thing that proponents of universal healthcare don't often seem to acknowledge is the total elimination of competition.

    Lets say the care you are receiving from the government is poor, very bureaucratic, and just not very good, and your in need of care. The supplemental private care also is not covering what you need.

    Too bad, there ain't nothing else out there for you. You will just have to live with the govt healthcare.
     
  20. spiritgide

    spiritgide Well-Known Member Donor

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    And you have asked exactly the right question!

    Insurance, which plans like Obamacare tries to impose on everyone, is unaffordable because medical and prescription drug costs are unaffordable. Fix the costs issue, and you fix the insurance problem as a side effect. So why do you get billed $15 for a ten-cent tylenol in American hospitals? As a comparison, should you need something major like a hip transplant- it will run $50-60K in an American hospital. If you have standard medicare, your share is $10-12K. However- If you contact a medical travel service, you can fly to Spain, get at least equal quality care, and they will pay your round trip airfare, your hotel for post hospital recovery and most all associated expenses- for the amount of your deductible in the USA.

    I believe there are two factors that drive our medical expenses through the roof:

    One- We are a very adversarial society, meaning that we like to blame others- and take their money. If that sounds cynical, consider this:
    Japan has 7 lawyers per 100,000 people.
    England, second highest in the world- has 83.
    America has 287. We love the idea that "You may be entitled to money", and we can help you get the compensation you deserve." The idea is that if anything at all happens to you- it must be somebody else's fault, and they should pay. We really like to sue to collect our righteous due- or at least the lawyers do. They take 33-60% of what you get. That's the honeypot of tort law.

    If you look at the ads on TV, consider how many are for drugs- always associated with side-effect warnings that take up half the commercial- and then the next ad will be for lawyers, telling you that if you took some drug or medical procedure and think you may have developed bad gas, you are entitled to money- and you should call them even if you aren't sure.

    Ads like that cost a huge amount of money. Defense of litigation- even when frivolous, cost a huge amount of money. Companies will pay to get rid of a lawsuit to stop the costs of defense, even when they aren't liable- it's cheaper. It's also a form of legalized blackmail. The lawyers have turned medical litigation into a major industry that no other nation tolerates- and all those wonderful damage awards are paid by? the insurance that doctors, hospitals and drug makes must pay. Where do they get the money to pay those premiums? From YOU, of course. The only winners are the lawyers- all consumers are losers.

    Medical Malpractice liability insurance is required. If you were a OB-Gyn, your premiums might be as high as $200,000 a year. If you deliver 100 babies a year, the insurance built into each patients bill will be $2,000. Your insurance company pays that bill..... and you pay the premiums that pay their bills.

    Two- Government regulations. While we DO need proper regulations, the current state of that is to cause doctors to spend a great deal of time and money- time they can't be treating patients, reducing their billable hours, and money paying staff that maintains records, which is money that must be drawn from those fewer billable hours. It's worse with drugs. Cost to get a new drug through the approval process- $2.6 billion, and it can take years. The cost varies with the drug, but the money has to be recovered from sales revenue- INCLUDING the money spent on drug developments that never get approved.
    This is why when my Dr prescribed a drug that cost $5 a pill (one a day) I checked into overseas sources, and purchase it for $0.26 a pill. While that is an unusually high contrast, virtually all pharmaceuticals are vastly cheaper offshore- including ones made in the same factories. Remember our insurance costs? Drugs purchased offshore don't carry the load of US liability insurance costs, and that alone is a major factor in the lower cost.

    Bottom line- our legal process and our regulatory process are killing our medical industry financially. We could change that anytime we wanted to. To date- I have yet to hear a single politician speak to these things. They talk about the cost of insurance, but not of the things that make insurance costs prohibitive. Like a hound barking on the wrong tree- and getting no results.
     
  21. 61falcon

    61falcon Well-Known Member

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    Right now many have to live with the network of hospitals and doctors their insurance plan approve???You'll just have to live with it??
     
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  22. Eleuthera

    Eleuthera Well-Known Member Donor

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    That's the point IMO. The personal and private relationship between physician and patient is infringed upon by a mercenary third party.
     
  23. 61falcon

    61falcon Well-Known Member

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    Healthcare in the USA was very cheap in the 1950's&60's prior to the creation of HMO's and a lot of health gimmicks introduced in the 1970's it has only been onward and upward for prices ever since.
     
  24. 61falcon

    61falcon Well-Known Member

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    In the 50's and 60's doctors still made house calls to your home and diagnosed and treated you in your own home.When I had pneumonia in the 50's I never left my house until I was fully recovered,no hospital.
     
  25. ProgressivePower

    ProgressivePower Active Member

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    Thanks for the substantive answer. Sure medical litigation can be an issue, although I do believe most in a lot of cases, people have been screwed over, so it is necessary. Now I notice you, agree with some regulations on prescription drugs, so would you be in favor of the bill that Bernie and even Ted Cruz support to lower the cost of prescription drugs?

    I also would like to include these two Mises articles if you haven't previously seen them, showing how government has bid up healthcare costs.

    https://mises.org/wire/how-government-regulations-made-healthcare-so-expensive

    https://mises.org/wire/how-government-ruined-us-healthcare-—-and-what-can-be-done
     

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