>Health Care is not market since there is hardly any market opaqueness. You simply don't know how much anything costs in health care, its all a big mystery until you get your bill. Health providers are out to make sure you never know how much something costs until it is time to pay for it.
Define "how much something costs?" I can pull up the spec sheet from my insurance company and tell you the in network price and out of network price for just about anything. The crappy system we have now sets the price between you and the insurance company. It's not that the providers don't want you to know how much something costs, they don't know how much it costs.
Conversely, I can go into the local urgent care here, a place that caters to many uninsured. The prices for their services are literally posted on the wall, not unlike the menu at a fast food restaurant. You know exactly how much an x-ray costs, or a cold/flu visit, or a cast, etc. When people are paying for these services with their own money and the prices aren't the result of some individualized, convoluted pay schedule with your insurance provider, then the prices suddenly become extremely transparent.
>and completely ignores what insurance is in the first place.
Insurance is there to help you out in the event of a disaster, not to pay your ongoing day to day costs. So let's make sure we're really talking about insurance.
>If you gave them cash and said this is your medicare, they would take it and spend it on everything but medical care. In the end, they would get sick and die or be crippled or worse,
That is historically incorrect. Yes, people may choose to spend less on healthcare than you would like them to, but why do you feel the need to be so authoritarian about your opinion on what's best for them?
>then leave everyone else with the bill.
Only if people like you force it on us.
>We know prices would never drop to the floor because that is the system we have in place now and prices keep going up.
As was pointed out by another poster the prices for elective surgeries like LASIK which are not covered by health insurance are going down over time. It's funny to me that you have no problem accepting that some people would take their Medicare money and blow it on something else, but you think that healthcare providers would not do anything to try to convince those people to spend their dollars with them.
>Define "how much something costs?" I can pull up the spec sheet from my insurance company and tell you the in network price and out of network price for just about anything.
Except if you go in for a major procedure, you don't know what you'll end up needing off that price list, and often, neither does your doctor. So even if providers were perfectly transparent about what a procedure would cost (and it's well-established they're not - just try calling and asking for prices) the nature of the service being purchased is that you sometimes don't know exactly what you're buying until it's too late to change providers.
A few years back I broke my leg and went to the hospital. Halfway through the process I was offered a couple of Vicodin, which I would later be billed $1,000 for. Was I supposed to haggle about them with that, or take my xray and hobble out down the street to someone who would sell me vicodin cheaper?
>Except if you go in for a major procedure, you don't know what you'll end up needing off that price list, and often, neither does your doctor.
One of two things is going to happen here. One is I have a flat rate for a hospital visit, so the cost is known no matter what I need. Second, if I'm hitting my out of pocket max then that cost is also known.
>A few years back I broke my leg and went to the hospital. Halfway through the process I was offered a couple of Vicodin, which I would later be billed $1,000 for. Was I supposed to haggle about them with that, or take my xray and hobble out down the street to someone who would sell me vicodin cheaper?
The only reason they could get away with even pretending like they would charge you $1k for a vicodin is because of the distorted system we have where everyone pretends the money comes out of the insurance company's money instead of your own.
Let's say I was paying out of pocket. (Given my HDHP, I effectively was.) Would that somehow magically change my ability to negotiate the price of those pills?
No.
It's not a "distortion". It's the inherent problem of trying to turn healthcare into a market. The dynamics of service delivery make it impossible for consumes to negotiate or compare prices in the manner necessary to have a functioning market.
I'd also note, that since I've never gone to any other healthcare institution with a broken leg, I have *no way to compare my experience to other providers. This is yet another way in that healthcare does not lend itself to market solutions.
You were paying the rate your insurance provider negotiated out of pocket. Again, all the pricing of healthcare is written up as if it were coming out of the health insurance company's pockets instead of yours.
In the midst of your one single incident, no, you would not have been able to negotiate the price of your vicodin. However, two things would change. First, they would not have offered you the vicodin without clearly informing you of the price if the norm was people paying out of pocket for most care. Second, if they charged $1k for vicodin but the urgent care down the street only charged $500, then basically no one is going to the first location. Rinse, repeat, until the prices are rational. So the cumulative effect of everyone paying out of their own pocket for most care is market-wide lower negotiated prices.
Funny, it happens that I actually tried to go to the local urgent care that day, and I was turned away because they couldn't handle an injury that serious.
Even if they did, I made my decision based on which provider I thought was doing to do the best job... I didn't know at the point I made that choice whether I would need those vicodin, so they wouldn't have been part of my decision. And once I was checked in to the SF General Hospital (after two hours of waiting) I was definitely not going to hobble down the street, trying to compare prices on vicodin.
Also my damn leg was broken. It wasn't really the right moment to break out Google Sheets and create an expected value analysis of my various healthcare provider options.
It's nice to say "if only we had more agency, prices would be lower"... but it ignores the fact you still need risk pooling (insurance) unless you expect everyone to keep savings for the worst case scenario. And pretty quickly a risk pool means someone has to decide how much that pool should pay to help treat a particular injury... and you're back to where you started.
Of course I would expect people to carry catastrophic coverage. And your case with a broken bone would qualify for a catastrophic event. But if the majority of healthcare purchases are driven by 300 million people seeking the lowest price for Vicodin, no one would be able to charge you $1,000 for vicodin even if you were going through insurance for this particular incident.
>And pretty quickly a risk pool means someone has to decide how much that pool should pay to help treat a particular injury... and you're back to where you started.
Not someone, EVERYONE. Each individual person must decide for themselves if they want to try pay a middle man insurance company some profit every time they get the sniffles or if they'd rather deal with that on their own, save money, and just get catastrophic coverage.
All of these things you're concerned about... we have an entire history of the healthcare industry before the New Deal where we saw how low healthcare prices were. We distorted the market with New Deal regulations putting caps on salaries, so companies started offering healthcare to employees. We can undo the damage done by the New Deal without getting all authoritarian about it.
Define "how much something costs?" I can pull up the spec sheet from my insurance company and tell you the in network price and out of network price for just about anything. The crappy system we have now sets the price between you and the insurance company. It's not that the providers don't want you to know how much something costs, they don't know how much it costs.
Conversely, I can go into the local urgent care here, a place that caters to many uninsured. The prices for their services are literally posted on the wall, not unlike the menu at a fast food restaurant. You know exactly how much an x-ray costs, or a cold/flu visit, or a cast, etc. When people are paying for these services with their own money and the prices aren't the result of some individualized, convoluted pay schedule with your insurance provider, then the prices suddenly become extremely transparent.
>and completely ignores what insurance is in the first place.
Insurance is there to help you out in the event of a disaster, not to pay your ongoing day to day costs. So let's make sure we're really talking about insurance.
>If you gave them cash and said this is your medicare, they would take it and spend it on everything but medical care. In the end, they would get sick and die or be crippled or worse,
That is historically incorrect. Yes, people may choose to spend less on healthcare than you would like them to, but why do you feel the need to be so authoritarian about your opinion on what's best for them?
>then leave everyone else with the bill.
Only if people like you force it on us.
>We know prices would never drop to the floor because that is the system we have in place now and prices keep going up.
As was pointed out by another poster the prices for elective surgeries like LASIK which are not covered by health insurance are going down over time. It's funny to me that you have no problem accepting that some people would take their Medicare money and blow it on something else, but you think that healthcare providers would not do anything to try to convince those people to spend their dollars with them.