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

Rand Paul supports legislation to allow this again.

 

Folks dont go to the hospital for sniffles and stubbed toes when they pay out their own pocket. When the cost is obfuscated or others pay, they do.

And when hospitals have to treat everything as potentially life threatening to protect themselves from the overly letigious, sniffles and stubbed toes are very expensive to treat.

 

That mises.org article is laughable. It gives neoclassical supply and demand theory, ignoring market power and asymmetric information problems. It also ignores how healthcare with greater government intervention achieves lower costs.

 

The United States already has a single payer system (Medicare and Medicaid) administered by private insurance companies. One may elect to receive medical care through the government directly or go through insurance networks like Aetna, Humana, etc. The government funds these networks and they dispense money to the providers. The system is rich with possibilities and also deeply flawed.

Government regulations prohibit both Medicare and Medicaid from negotiating drug costs. This leaves it to the insurance companies to bargain with drug companies. There isn't much incentive to do this because it's easier to just pass the costs on to the patient.
this allows drug costs to skyrocket. Organizations with buying clout like Wal*Mart and Walgreens, will bargain and lower prescription drug costs. The big health care insurers also bundle providers into vast networks of doctors, clinics, and phsrmscies thereby creating integrated communities of provider networks. These insurance conglomerates have ample incentive to lower cost.

I suspect the United States healthcare insurance industry will survive by expanding this business model. It seems an eminently American way of doing business.

 

Profit

 

Used to be a doctor treated a patient in his home, his office, or the patient's home. The doctor gave the patient a bottle of a few pills if needed. Afterwards the fee was settled by weekly payments, or 2 hams, a gallon of milk, and a dozen eggs, or a small amount of cash. Now add health insurance companies and they need to make a profit. Add the government who add rules and red tape using a lot of people to shuffle the papers and those workers have a great salary and many benefits. -- which runs up the costs. Then add the ambulance chasers and all the litigation that runs up the cost. So the doctor needs malpractice insurance to fight off the ambulance chasers. The malpractice insurance companies need to make a profit so now the costs go through the roof. You ask why doctor bills run so high -- well the patient is supporting the doctor, the government, insurance companies, and two types of lawyers.

 

Bernie is psychologically incapable of supporting anything that is fair in nature. The man's thinking is like a child, firmly anchored in the "somebody else should pay" mindset. I eventually got to the point I refuse to even consider anything he says- and see him recommending anything as a guarantee that it is pure BS. As far as I'm concerned, long ago he burned the last credibility he ever had.

Of course there are legitimate malpractice claims and drug issues. But when mining money by way of these claims becomes a for-profit industry, it diminishes the validity of all claims. Everything is about leverage, not correction of wrong or what is due or fair. Major corporations like Dow Corning for example, was driven to bankruptcy by the silicone breast implant litigation- which, many years later, was proven to have no legitimate basis in fact, noting to justify the claims the huge judgements and legal costs suffered. You don't have to be guilty of anything or wrong to bring out the attack lawyers- all it takes is deep pockets. You can be sued for anything- and even if you win the suit, you lose. My company won a lawsuit a few years back where the claim was a lie. We won. The legal cost was three times what it would have cost to have paid the claim to make them go away. However, the plaintiff spent a lot more than we did- it cost him 4-5 times what he sought to gain. I took it all the way through a trial on principle, not monetary considerations. We both lost.

When lawyers pursue profit without justice- everybody loses. When politicians pursue power and control without respect for their duty to the people- everybody loses.

 

healthcare can’t and doesn’t function in a free market, as it is not a normal commodity or service. You can’t shop around for price like you can a tv or refrigerator.

Single payer systems are the proven superior system regarding healthcare. Every first world nation with si gle payer gets better care than us, at a fraction of what we pay.

 

We haven;t had a free market in health care since the Medicare law was passed.

 

Used to be barbers did surgery

 

I 'liked' this, but disagree with it in part. Corporations (insurers or otherwise) are simply exploiting the willingness of the customer to buy. It's what any business does. We can't demonise business, for behaving like a business. They are not charities.

When you (Americans) stop demanding your 'own doctor', absurd overservicing, and hospital rooms more like hotel rooms, then these corporations will go elsewhere for their easy money.

 

Well there ya go! You figured out a way to make medical care as affordable as a shave and a haircut.

 

That's as relevant as "paying with chickens"

 

I don't know about your barber, but mine prefers cash.

 

It was cheap because companies did not have to insure sick people and dropped them when they became too expensive. This isn’t rocket science. It’s more expensive to insure sick people with preexisting conditions.

 

More like since WWII.

 

"There is no reason health care providers should be forced to provide services." I'll just ignore this for obvious reasons. Ethics...

There is a scale. For one, the idea of a free market doesn't really exist in reality because of externalities. It's only a concept used to discuss the idea. but... The problem is the car market is objectively more free than the health market by nature. If you have a medical emergency you have little choice. You must go to the closest, you must receive treatment immediately if you wish to live, etc... Whereas even in the worst case scenario when buying a car there is much more choice. Markets are not black and white as you are implying with your question.

 

Too much government regulation.

 

Lawsuits being now healthcare business as usual, liability insurance, research costs, expensive technology, record keeping costs, and lengthy, expensive education of physicians and healthcare workers all has to be rolled into a doctor visit or a bottle of pills or immunization, and rolled into every other patient payment check and insurance payment in healthcare.

The trial lawyers have to be paid, and the patients collectively have to pay them.

 

Doctors didn't start medical insurance companies to help people, but rather to get rich.

They wanted the days of two chickens and a bushel of sweet corn in payment to be gone.

 

That and their is little to no choice for the consumer. It's not like you can shop around with a budget for the best doctor to get you stitched up in an emergency. That is a huge oversimplification but hey.

 

Why can't the market deliver healthcare at a low cost?
-Price Gouging
-Effectively zero ability to negotiate prices (very little consumer choice + insurance companies are a part of this)

 

The reason the medical costs have spiraled out of control over the past half-century is because increasing government involvement.

The increasing belief of people that medical Care is commodity they are entitled to.

My argument against this is that you cannot be entitled to a commodity because a commodity is produced by other people. If you force someone to give you the commodity they spent time producing you must pay them for it or quality will suffer greatly.

The solution I think would be best is not doing anything about insurance except for getting rid of all of Obamacare. Returning 100% to pre-obamacare insurance. Also extreme tax incentives for people who decide to buy into medical Care cost-sharing. and of course because there are people who can't afford to pay for the medical care they need there should be the pool of cost-sharing money devoted to the poor and indigent. The qualification for such program should be based on income and assets. I'm okay with this being subsidized by tax dollars but I'm not okay with a government agency controlling it it needs to be placed in the hands of a private company or a third party.

The government borrows against everything they can.

 

Externalities are the excuse leftists provide us for doing stupid things for no good reason. Government does not provide health care it micromanages it to the point of diminishing returns and then has the cast iron gall to complain about the free market that they all but suffocated.

 

The short answer is governent interference in the free market screws the normal working of the market