This post is muddying arguments by mixing everything in healthcare together. Lasik has gotten much better AND much cheaper because people shop around. There are many more things that can be handled like this. Instead, doctors and patients tests to be on the safe side because it is "free".
Lets take a quick aside for MRIs. The machine has a high fixed cost but the margin cost is pretty low. Just the time of the operator and 2 minutes of a doctors time to read it. They actually cost between 1k-12+k. Why is there such a huge cost difference? This would not happen anywhere else. Yes, MRI might be required right now but they can also be required in a few days, or weeks. Some cases you can wait and see if it is needed at all. All of the people could shop around and go to the 1k place. Right now there is no incentive to shop around. If there was an incentive, the 1k places would get way more business. Some people would still be willing to pay 14k but it much smaller. Eventually they would need to lower prices to stay in business. In all markets, most people are willing to pay more than the list price. However, the list price is determined by the marginal customer. Eventually the person that would have paid 100k would still only need to pay 1k.
Your example of knee surgery works the same way. If you are paying the whole cost or even 25% of the cost, you will care about the cost. You will want a good doctor that will actually fix your knee. But you would not want to pay 2x the going rate from a slightly better doctor. With other big expenses like buying a home, car, getting married, or even buying a computer, people read reviews, consider several options, and look for a good value. With healthcare, they only care about quality since there is no price.
People need many goods beyond healthcare. They need food, water, and shelter. We still can have prices for all those things. I am baffle by your definition of a guaranteed market. Yes there is guaranteed market for food but that does mean that any given supplier will get that market. It seems like you are assuming a monopoly or something. Finally, none of this precludes supporting health care of poor people or have insurance to protect people from getting huge amounts of healthcare debit.
"Health care" is an umbrella term which subsumes both things where "wait and see, shop around" is viable, and things where doing that results in death or serious lifelong disability. Hence the common refrain about how you can't shop around for price quotes when you're having a heart attack: you're going to get taken to a hospital, with little choice of which one, and billed for whatever that hospital charges, because the alternative is you die right then and there.
It is a non sequitur to talk about how Lasik has gotten cheaper due to shopping around when others are discussing the heart-attack case.
The original article is arguing that there should be prices in health care. The vast majority times is a lot closer to lasik than it is to heart-attack.
Even you would agree there are times were prices could work in health care. It is a non sequitur to respond a call for prices with the most extreme example and say you can't use prices for all of health care because of the extreme case. For the extreme case, we can have catastrophic insurance or government payment. However, it doesn't make sense to make all cases work like the catastrophic case.
I am acknowledging that there are times that the healthcare is different than other goods. However, the counter arguments seems to be that the acknowledge catastrophic situation is all that happens or matters? Everything but the most extreme cases is closer to the market for food or rent. It is extremely important that you receive it but there can be competition for which one you pick. Also, similar to the market for your labor. It is extremely important that you stay employed but still not life and death for many people.
There are benefits for real prices for the normal cases even if the extreme cases don't pay. Prices are determined by the marginal buyer. Consider a procedure that is life and death for 50% consumers. If several hospitals are competing for the other 50% that can shop around, that will drive down the price for everyone.
For routine care, people with insurance have a copayment that's fixed and printed on their insurance card. They care about and can easily find that price, and it's the price they pay, so why should they care what's going on behind the scenes between the doctor and their insurance company?
Except this disproves the "just show the price" argument. People know what the price is they'll pay for routine care, because it's printed on the card.
The one that's hard to figure out is what you'll pay for inpatient or otherwise complex/non-routine care, which is often where "shop around for a good price" isn't possible anyway. If you get hospitalized for a heart attack, you can't find out the price in advance, but you also don't have time to anyway.
All my previous comments explain that the heart attack example does meant much for how we should handle routine care.
A low flat rate for that is the same for an ear infection and 12k MRI leads to misuse. Price is a signal to suppliers and consumers. High prices causes consumers to look for alternatives. It also drivers more suppliers to the market. Flat copay does none of this
Lasik and discrete MRIs are really awful examples. The former is elective, the latter is an oddball.
In reality one needs to shop around for the things that happen after the positive MRI such as the radiologist who reads the MRI, physical therapy, medications, anesthetist, recovery room, OR, OR supplies, recovery room supplies, expendable surgical device costs, and a mass of other things I forgot about even though I just had one of these.
Everything is itemized and the actual end cost cannot practically be shopped.
Lowering the cost of an MRI (regardless of whether you need any follow-up things that are not directly related to actually performing the MRI) is beneficial to consumers in every case.
Without the ability to shop, the MRI price stays high, and consumers end up paying more.
I am talking 100% about MRI costs. It is hard to find the real costs but that is all due to nonsense that happens between doctors and insurance. I am talking about the actual cost that my insurance pays for just the MRI. The price depending on where I went had a huge impact for my insurance. I choose to go to a cheaper location purely because I thought it was a waste. The place I went would have charged me directly 11k but charges my insurance 2k.
>Yes, MRI might be required right now but they can also be required in a few days, or weeks. Some cases you can wait and see if it is needed at all. All of the people could shop around and go to the 1k place.
In what manner do you expect this to be done? You're talking about buying a machine that is upwards of 800K, not including facilities and staff. Then, you're marketing it to a reduced price. Thats your competition strategy, to do it cheaper. Sure, it may create competition and the hospital will reduce their prices. Then you're out of an investment pretty quickly, and as such its not a sustainable business model.
Thats not to mention that healthcare again, is a service. Its created to be all-encompassing, and even if an MRI is more expensive in-hospital, your doctor can still highly suggest you do that, and you'll do it. Because you don't know any better, and you probably really don't.
>You will want a good doctor that will actually fix your knee. But you would not want to pay 2x the going rate from a slightly better doctor.
How do you know the quality of the doctor? You don't. You know what the hospital looks like, and how the doctor acts. You have no idea about what they're doing is correct or really what you need. So, yes, actually, people will pay 2x for a better doctor or hospital, because the easy reasoning is 'they'll have to do it once'. The other hospitals may have to do it multiple times, and do unnecessary things because they're just not as experienced, not as funded. It doesn't matter if its true or not, because you don't have access to that information, and neither are individuals who usually think they're knowledged know the complexities of what they're talking about.
>Yes there is guaranteed market for food but that does mean that any given supplier will get that market.
Again, simplifications that don't add up to healthcare. You, your person, is not food. Its not a car. Its not a house. Everything else is replacable. You are not. This is important, because that is the incentive and expectations of the service. Which, again, this is a service, not a product.
>It seems like you are assuming a monopoly or something.
Yes. Healthcare is very monopalistic. It doesn't have to be one monopoly to be a guaranteed market, because this spans the entire U.S. Its like saying Telecoms aren't a monopoly. Sure, not strictly speaking, but effectively you don't get an option. Healthcare is significantly more so, because as I said, its care, you physically need it to survive in many cases. Therefore, it does not matter if the market as a whole, due to the few that have control, increases prices for worse service. You will bend to it, because you have to. That is a guaranteed market.
Lets take a quick aside for MRIs. The machine has a high fixed cost but the margin cost is pretty low. Just the time of the operator and 2 minutes of a doctors time to read it. They actually cost between 1k-12+k. Why is there such a huge cost difference? This would not happen anywhere else. Yes, MRI might be required right now but they can also be required in a few days, or weeks. Some cases you can wait and see if it is needed at all. All of the people could shop around and go to the 1k place. Right now there is no incentive to shop around. If there was an incentive, the 1k places would get way more business. Some people would still be willing to pay 14k but it much smaller. Eventually they would need to lower prices to stay in business. In all markets, most people are willing to pay more than the list price. However, the list price is determined by the marginal customer. Eventually the person that would have paid 100k would still only need to pay 1k.
Your example of knee surgery works the same way. If you are paying the whole cost or even 25% of the cost, you will care about the cost. You will want a good doctor that will actually fix your knee. But you would not want to pay 2x the going rate from a slightly better doctor. With other big expenses like buying a home, car, getting married, or even buying a computer, people read reviews, consider several options, and look for a good value. With healthcare, they only care about quality since there is no price.
People need many goods beyond healthcare. They need food, water, and shelter. We still can have prices for all those things. I am baffle by your definition of a guaranteed market. Yes there is guaranteed market for food but that does mean that any given supplier will get that market. It seems like you are assuming a monopoly or something. Finally, none of this precludes supporting health care of poor people or have insurance to protect people from getting huge amounts of healthcare debit.