Exhibit A for why "free market healthcare" is an oxymoron.
I have yet to hear a coherent explanation for how anyone can reasonably expect for price discovery to even pretend to function in a market where the consumers can't even guess the prices until after they've already purchased and frequently couldn't reasonably be expected to refuse service even if they did believe it was overpriced.
Price discovery is indeed difficult in the current market. However, the current healthcare market is no where close to a free market.
For example, suppose you wanted to start a hospital that offered price transparency, like the Surgery Center of Oklahoma does. (1)
In thirty-five states and the District of Columbia, you'd first have to acquire a certificate-of-need (CON) from the state healthcare regulators.
In order to get certificate of need, you must prove that the community “needs” the new or expanded service, and existing providers are invited to challenge your application.
Existing hospitals typically don't want new competitors taking away their patients, so they vigorously fight to prevent new CON's from being issued.
For example, Dr. Mark Monteferrante wanted to buy a second MRI machine for his radiology practice in 2003. But it took five years and more than $175,000 in fees to get the certificate. (2)
And conlaws are just one example of perverse effects of state intervention into the healthcare market, from state laws restricting insurance competition, to severe restrictions on new entrants to the medical labor market, to drug monopolies.
Price discovery requires pricing some people out of the market. Period. There is no "free market" healthcare system that can or ever will deliver required health services to everyone.
Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow. That is both a massive distortion and non-optimal for the economy as a whole.
There are certainly regulatory inefficiencies and other inefficiencies in healthcare markets, but a truly "free market" in healthcare not morally justifiable.
> Price discovery requires pricing some people out of the market. Period. There is no "free market" healthcare system that can or ever will deliver required health services to everyone.
There is no economic system that can deliver all of the health care to everyone who wants it.
Fundamentally, health care resources are limited: doctors, beds, MRI machines, etc.
Desire for health care is much less limited.
The question is not whether to give everyone what they want, but instead how to imperfectly ration what we have.
We are overspending on the quality of health care we get today. Further there is a lot of fear mongering about socialized medicine.
I've experienced medicine in both the UK and the US. I can tell you, there isn't a difference in quality. Further, when I got a cold and went in, wait time wasn't 6 hours or whatever other BS people claim. Wait time was ~10 minutes. In fact, the time to see a doctor in the US is almost always longer. Why? Because half the time you have to fill out forms and provide proof of insurance and a whole host of other information for them before they will put you on the waiting list.
What did I have to fill out to see a doc in the UK? A card that had my name and current address. Even that, they told me, was optional.
Cheaper medicine for less money is a reality. The only people that lose with socialized medicine are admin and insurance. Everyone else in the nation wins.
I've had different experiences from you. My experience in the UK was wait 90 minutes in a waiting room and when it was finally close to my turn I was told I could only see a nurse and she wasn't allowed to proscribe any medicine so if I wanted to see a doctor I should go down the street to the private doctor. This was in London near Soho.
In Japan the first time I went to a doctor it was for stomach pain. He gave me on ultrasound and declared I had hepatitis. My personel department at my company decided to take me to another doctor. Had to weight 2.5 hours in a room with around 250 other sick people. Was finally told I had food poisoning.
I am not defending the USA system but both the UK system and the Japanese system have issues as well. I've spent the most time in the Japanese system. What I like is it's easy to see a doctor and relatively cheap. Prices are apparently set by the government. Conversely a large percentage of Japanese doctors are quacks and would be unqualified to practice in the USA. It's a common topic of conversation for foreigners here to tell their horror stories of all the crazy experiences they've had with doctors here. Also, top doctors, or rather surgeons are known to require bribes in the $XXXX-$XXXXX range beyond the decided on fees.
I’ve had to wait 3 hours in an ER in America - also have had to drop providers because they only had appointments weeks out.
The decision to go to a doctor is a financial one in the US, sometimes superceding a health one. Our life expectancy is dropping as well. It’s a broken system and adding more of what is broken about it won’t work, if the goal is for society to be healthy.
The UK system isn't amazing, unless you're evidently having an "emergency", you can be waiting for hours (once waited for 4 hours with a broken wrist for example) - that being said, the triage is pretty solid and you'll cycle through intermediate steps in the meantime.
I think the best part is not having the mental burden of potentially going bankrupt afterwards...
There are severe problems with the English NHS, but we need to remember that it costs the tax payer a lot less than the US system.
That's the thing I don't understand: they pay more in tax, and they pay more in insurance, and they don't get universal coverage and have worse outcomes across a range of measures.
Was this with your GP or did you just turn up at the A&E with minor ailments - turning up at the A&E with something you should be seeing a GP with will mean you got the back of the queue.
I have never had a problem getting a appointment to see my GP.
> In Japan the first time I went to a doctor it was for stomach pain. He gave me on ultrasound and declared I had hepatitis.
Ultrasound? That is absurd.
I can't speak for UK/US/Japan but in India situation is quite similar. Opaque pricing along with quacks (or maybe genuine doctors) out to milk as much as they can, especially if they know that you have insurance.
A colleague of mine who had stomach pain was told that he had to get his appendix removed. When he refused the doctor actually threatened him with a write-up to ensure that he doesn't receive any insurance money. After the company got involved he was moved to another hospital, only to be told that he had stomach gas.
When were you in the UK system? I've noticed a lot of variance between people's opinions based on the fact that there's been a sort of sabotage campaign against the NHS in recent years (it's dropped ten places in the worldwide healthcare rankings in the last five years). So people that had experiences with the UK system in the early 2000's generally had a good time, whereas later, it became a lot more mixed.
Assuming you are not an EU citizen, you are don't get free healthcare in the UK anyway. They probably told you to go to the private doctor because if you are non-EU you would have health insurance which would cover this no?
That's not how this works. If you are from outside of EU you are not limited to private doctors and hospitals - you can still go and be seen by any NHS doctor, but you have to disclose the fact that you are not covered by national insurance - they will simply ask you for personal details and send you the bill few weeks later(well, if it's worth if - if you're only seeing a doctor about a cold or a broken wrist they will not even bill you anything because it's not worth the time spent filling out documentation, and pretty much no hospital even has a billing department).
> I've experienced medicine in both the UK and the US. I can tell you, there isn't a difference in quality.
My experience was very different. In January-February this year I had to visit (unfortunately) both the Emergency Room in NYC and the A&E in London. While the quality of the medical equipment in London matches the one in NYC, the understaffing is much more severe. In neither place was my wait time only 10 minutes, but in NYC I had to wait for about 1 hour (including paperwork), while in London for about 6 hours.
I talked with other people in London about my experience that the medical system is severely understaffed, and all agreed. On the plus side, I did not have to pay anything in the UK (they didn't even care that I was not a UK resident). In the US I had to pay north of $1000, despite having insurance.
My Girlfriend managed to stick her finger in a blender in January. We went to a London hospital, got seen by a doctor within 1 hour (she had stitches within 20 minutes of arriving) and she had plastic surgery on her finger that evening. For free.
Different A&E departments have different problems. The NHS is the largest employer in Europe, and it's reductive to say "all London hospitals are understaffed". They are not. Part of the problem is seasonal and even daily shifts in A&E visits, you can't staff for the worst case all the time. And January/Feb is known to be a busy couple of months.
In Boston I recently had to wait in an emergency room for 5 hours with multiple broken bones. This was at one of the best rated hospitals in the country.
I recently moved to a new state and I’m trying to get set up with a new primary care provider. I’ve been trying to get an appointment for six months, but they keep bumping my appointment back. Did I mention that I had to settle for a nurse because none of the doctors in my area are accepting new patients?
This weekend I was feeling incredibly sick and there were ketones in my urine (potentially deadly for me). We got there at 9p.m and weren't seen until 2a.m. They stuck us in the room where they keep patients with potential mental health issues because they were so full so I didn't even have access to a charging outlet. We have good insurance. The US healthcare system is often times just as understaffed. Both can be terrible experiences but one can potentially bankrupt me.
>> I talked with other people in London about my experience that the medical system is severely understaffed, and all agreed.
That is because NHS spending is being slashed viciously. Obviously, if socialised medicine is being dismantled, it can't be expected to work all that well anymore.
Insurance is complicated in the US in no small part because of government intervention.
Starting with the fact that employers pick insurance plans for their employees, eliminating enormous market power: and this happens because the government doesn't tax the money that is spent on insurance plans.
Why did you go to a doctor for a cold? That seems to be a problem. You send someone to school for 10 years and they spend their time talking to patients about a runny nose due to a common cold. And for what? To write a prescription?
For a cold, just wait a week or two. There's nothing medicine can do for you anyway. If it's still there, then it's worth checking. Also, you shouldn't need a sick note unless you are off for more than a week (your legislative framework may vary).
It depends entirely on the employer. Some places will require a doctors note if you miss more than two shifts. So in places like that, people typically go to work sick, and just spread the disease. This includes most fast food restaurants so think about the implications of that.
I wondered the same thing. My mother was a registered nurse who rarely ever took us to a Dr unless we were very sick for several days. For colds she simply treated the symptoms. If we had a fever it meant bed rest and sipping 7-Up to help settle the stomach. The only time she took me was for ear infections and tonsillitis.
That assumes that the desire for health care is unbounded like other consumables.
In reality most healthy individuals want a limited amount of care, sick individuals want the least amount of care required to return them to health - and there are fundamental limits on the amount of care that can be provided to those who are beyond the help of current technology.
As such you would expect a finite level of demand from the economy as a whole if everyone was allowed as much healthcare as they desired. Any attempt at rationing care will both reduce efficiency, and constrain supply - driving up prices. The most market oriented system would leave supply unconstrained and provide universal and automatic coverage allowing more suppliers to enter the market until supply outstrips demand and "prices" naturally fall.
No, the demand for healthcare is basically infinite.
I got a cold yesterday with a crazy bad sore throat, I thought of maybe popping into the doctor. But it turns out to be just a regular cold. My mother would have 100% gone to the doctor. The clinics here in Canada are chock full of kids with the flu and people coming in 'because'. Maybe that's beneficial due to the risk 'it could be something bad'. Or maybe the economics don't make sense i.e. for really mundane things it's better to just stay home and take Tylenol.
But the demand is super high. Once people cross 50, there are always problems. Always something. And it's all expensive.
That’s finite demand as the effort of going to the doctor is non zero. People in good heath are not going to waste their time.
Assuming the average doctor’s visit is 15 minutes and the average person goes to the doctor every month. That’s only 1 GP per 640 people. After that point they might send you to a specialist some fraction of the time, but it’s still finite.
Consider dental insurance is ~15$ a month and most people go to the dentist twice a year. That’s about what GP side of heathcare costs. It’s the care after that point from people with actual issues that gets expensive. Yet, without the vast overhead of insurance you cut the costs of providing actual heath in half. Which more than covers the costs from people that are currently turned away.
PS: And yes billing is ~50% of current US costs when you include Doctor time dealing with paperwork. Remember the entire insurance industry and their profit is pure added cost, but so is the medical billing people inside each provider.
> Maybe that's beneficial due to the risk 'it could be something bad'.
I would assume it's detrimental because it results in doctors' waiting rooms full of people with colds (making it a dangerous place for anyone who is immunosupressed and really needs to see the doctor).
The problem in the US is that you can't just go get your throat swabbed for a strep test in that situation. That could take 5 minutes and cost less than $50, but nope.
Are you saying that the richest country in the world can't accomplish something that already exists in plain view in some of the poorest countries in the world?
There is no country on earth that gives people all the healthcare they might want with no limits and that is not what we should be aiming for. There are many that give people enough healthcare and that is what we should be aiming for.
You really should get the facts on how those systems actually operate.
I'm currently living in an european country that has a national health service that supposedly ticks all the socialist talking points, including free (in theory) access to emergency care, but not only is the service largely inoperational with year-long waiting periods for surgeries, including cancer treatments, but also has a disgruntle workforce who systematically complains they are underpaid and overworked.
The situation is so appalingly bad that the national health service even routes patients to private hospitals and clinics, ending up paying a hefty bill for the services they were supposed to provide in-house but are largely unable to provide.
While I understand your point, I don't know if it could be distilled that succinctly. I have friends who have worked in European countries with universal healthcare that was sub-standard by a U.S. perspective. What I'm curious about is whether this is directly attributable to the healthcare system structure or if it's more causally related to other factors like GDP, access to a trained workforce, or basic infrastructure. Meaning, if we look at two very similar countries that happen to have different healthcare systems would the same effect you outlined still hold?
While I also come from a country like the one you described, there is a very simple fact that cannot be ignored - when my dad got cancer 8 years ago, every single one of his operations and all the drugs(including incredibly expensive Glivec) were 100% free. He was even reimbursed for the cost of travelling to the hospital for his monthly check-up.
If he had the same disease in US, he would die much earlier than he did, I'm 100% certain of it, because quite simply there is no way he could afford the treatment or the premiums that americans are paying for their healthcare. Even when he was sick enough that he couldn't work anymore, he was still 100% covered and didn't have to pay anything for anything ever.
My point is - there are people in our countries who are probably dying because they have to wait months to be seen by someone. True. But there are also people in US who are dying because they cannot afford the treatment they need. I feel like this is far worse than the first situation - after all, we only have a finite number of doctors, a finite amount of hospitals, and limited capacity to add more(for reasons other than financial too). But US is the richest country in the world - and its citizens die because they cannot afford cancer drugs? That's abhorrent.
You have gone from a hypothetical to concluding that people in the US die because they can't afford cancer drugs.
If your dad was over 65, he would be on Medicare. If he was younger than 65 and impoverished (income between 0 - ~150% of poverty level) he would be on Medicaid or another state plan for low income people. If he's above 150% of poverty level he probably has health insurance available at work or thru ACA. In fact is legally obligated to.
It's entirely possible to have health coverage and still be financially ruined by a health emergency due to deductibles and pre-existing condition loopholes.
Medical expenses, unlike credit card debt or student loans, can still be discharged through bankruptcy. For lower income elderly folks, that coupled with low paying job opportunities usually leads to disaster.
> Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow.
This is also true with food. What keeps the price down is competition, not price controls.
so when I get into a car accident and am bleeding internally, I can march down the street to the next hospital if I think the bill at the one I'm at is too high?
No; but suppose we agree that emergency response services (fire, medical, police) should be state-run. The goal of such state-run ER is to get you as quickly as possible to a hospital, where care can be provided. The state can then shop around for the cheapest/best private provider for each catchment area. One could also make a case that the state should pay for this emergency care out of tax money - unless the state can show that you were the one responsible (e.g. if you end up in a hospital because of excessive drinking on a night out - taxpayers should not have to pay for you in this case).
But such true emergency response seems like actually a very minor part of all medical care. It would be better for people to have private emergency arrangements through their insurance - but, of course, this is not always viable (if you are bleeding out in a car accident, there is no time to figure out which hospital you have a deal with), so that is one area where the state should probably be involved.
Does it have an end goal of maximizing profits, though? Couldn't the goal of price discovery be to find the point where supply = demand, without necessarily maximizing profit?
Granted, this ignores the human trait to increase consumption when removed from directly paying all associated costs (e.g., my behavior at Golden Corral)
Doesn't that imply they compound profits by either 1) raising prices and thus reducing demand for their product in the presence of non-profit maximizing suppliers or 2) creating efficiencies to increase profit margin at an equal-or-lower price?
In situation one wouldn't the advantage go to the non-profit motivated supplier and in situation 2) doesn't it ultimately benefit the customer with lower prices?
I think the point is if one company is making outrageous profits it’s trivial for a competitor to undercut them. The food industry for example rarely makes more than 2% in profit because it is so competitive.
I would agree, but only with industries with a low barrier of entry of commodity businesses. There are also other moats that prevent trivial competition. Examples may be intellectual property, branding, switching costs etc.
I see your point if the term profit is defined in a general sense, but with the exception of "corporations as people" caveat there's plenty of everyday examples where people are trying to maximize outcomes other than capital (sometimes at the expense of capital). I'm not sure that makes it any less of a free market
It does. There's no free market for soup kitchens for the homeless, for example.
There exist entities who are willing to provide soup kitchen services below operating costs in perpetuity (i.e. charitably, for free). The price for services is kept artificially low ($0) by constant infusions of capital from outside the market (charitable donations), which prevents for-profit vendors who don't receive constant cash infusions from being able to compete on a level playing field. The resulting market is thereby warped by the distorting influence from non-market forces, preventing it from operating efficiently. It's not "free", in the technical sense.
This isn't necessarily a bad thing, to be clear. The charitable funding system may well provide better aggregate social outcomes than a free market would for any number of reasons, not the least of which being that one of the freedoms that "free market" implies is the freedom for vendors to decide that some of their potential customers are more trouble than they're worth to serve.
You illustrate the point well and maybe I'm just not well versed enough in the topic. You imply that a charity warps the free market by undercutting profit-motivated competitors but in the last statement you give the vendors the freedom of choice in regards to their customers. Is there any reason why this same freedom of choice can't be extended to people who choose a specific social outcome at the cost of less (or nil) profit? For example, are B-Corps fundamentally less "free market"? Or does the very nature of free market imply a profit maximizing function? As an example that comes to mind, I'm curious how not-for-profit and for-profit hospitals interact in a "free market" of healthcare in the United States.
> Furthermore when the alternative is death or debilitation, the price a "consumer" is willing to pay is effectively everything they possess and can borrow
Someone is morbidly obese. They will die and are already debilitated. The cost of having their life back is eating less. Many are not willing to pay that price.
No, a well working competitive market reaches a price where marginal revenue equals marginal cost. Unless you are using an unorthodox version of microeconomics.
> There are certainly regulatory inefficiencies and other inefficiencies in healthcare markets, but a truly "free market" in healthcare not morally justifiable
Socialized healthcare has its own "immoral" trade-offs. We essentially reduce per capita quality in favor of all-inclusive coverage. Proponents of free-market healthcare would argue that the inefficient allocation of resources inherent to socialization is immoral. Libertarians would argue that forcing money from one person to give to another for medical care is immoral. It's not really a question of morality, more of preferred philosophy and practicality. Framing it around morality makes the other side seem abhorrent and the situation difficult to find common ground.
> Socialized healthcare has its own "immoral" trade-offs. We essentially reduce per capita quality in favor of all-inclusive coverage
That's a false dichotomy; there are many mixed systems where the government provides a baseline level of care with private insurance providing additional services or benefits (eg: government covers a shared hospital room, private insurance covers a private room).
>Libertarians would argue that forcing money from one person to give to another for medical care is immoral
True libertarians also argue that all taxation is theft (if they're purists anyway), making road construction immoral.
> Framing it around morality makes the other side seem abhorrent and the situation difficult to find common ground.
A "free market" in healthcare requires us to condemn people to death or debilitating injury when they cannot afford care. Unlike nearly every other area, this one literally involves life and death so I believe it must meet a different standard than other activity (economic or otherwise).
> True libertarians also argue that all taxation is theft (if they're purists anyway), making road construction immoral.
No, it doesn't make road construction immoral in the eyes of libertarians. It makes taking money from other people, by force, in order to build a road, immoral. People are totally free to build roads privately and pay for it themselves, and even band together to build these roads.
(Part of where the standard libertarian argument falls apart, in my eyes, is that government in many ways really is just a scaled up version of "people banding together to build a road". There are there are legitimate moral/philosophical questions around opt-in vs. opt-out though).
> Part of where the standard libertarian argument falls apart, in my eyes, is that government in many ways really is just a scaled up version of "people banding together to build a road".
There is a significant qualitative difference in that "people banding together to build a road" is an entirely voluntary activity, whereas government is nothing of the kind. It's not merely a matter of "opt-in vs. opt-out". Even in an opt-out system one can choose not to participate without penalty, but if you inform a government that you're choosing to "opt out" they won't just leave you alone to live as you please. They draw their arbitrary lines on a map and consider everything within those lines to fall under their control. Even if you move halfway around the world and renounce your citizenship, and in doing so cut off all ties to everyone and everything you once knew, you may find that they still claim a share of your income to pay for that road you'll never be able to use.
The "scaled-up" version of "people banding together to build a road" is a co-op or corporation. Such an organization does not have the power to tax or to impose regulations on anyone who doesn't explicitly and voluntarily agree to them.
> True libertarians also argue that all taxation is theft (if
> they're purists anyway), making road construction immoral.
Why would you call those people "true" libertarians? There are a lot of people who consider themselves libertarians of various sorts who strongly disagree with this. Some consider property to be theft.
There are many kinds of libertarianism, and the American-style extreme capitalist libertarianism is not the only one, and probably one of the most irrational forms of libertarianism.
Personally, I feel providing essential care to everybody equally does the most to free people from oppression and extortion by those who wield power over them at a time when they're vulnerable.
Exactly. It's the same reason we don't have free market police and fire services. You simply don't get to "shop around" for emergency services, which includes privatized ambulance services (which are outrageously expensive, on the order of $12,000 for the ride I took when I had to take one, and it was a relatively benign one... thank god I had insurance). EMS is covered, but that's the Fire Department. After that, it's all privatized.
If it's cosmetic, then I could see the argument. But when it comes to emergency services, and for ambulances especially, the "free market" argument just doesn't hold water.
The history of private firefighting is a particularly dirty one.
In the past, fire companies would show up and demand payment before putting out fires. If a payment couldn't be made, the company might negotiate the purchase of the burning property at a steep discount.
Later, insurance companies hired brigades to only put out fires on insured properties. Fire companies might have fought or sabotaged one another in order to win the right to put out a fire and get paid for it.
While it isn't perfect, and it's often underfunded, I definitely prefer the system we have now.
Not everywhere, though. In Denmark, private operators have been handling emergency services since 1926; currently one company (Falck) is handling 65 percent of municipal fire brigades and 85 percent of ambulance services. No particular nastiness has been reported afaik.
Right, but that's not paid for by the end customer (at the point of use), is it? There could be single payer with private doctors they'll just get paid with public money, which is entirely different to Joe paying his doctor.
The US has lots services that are provided by regulated monopolies. My garbage company, power company are all regulated monopolies. A key thing is you're required to have garbage and power service but the rates are negotiated by a public utilities commission or the city or county.
However Healthcare in the US isn't a regulated monopoly like that.
My point was just we do have regulated monopolies in the US. But healthcare in the US isn't a fully regulated monopoly.
I'll argue whatever PG&E problems are they don't rise at all to the level of healthcare. And their problems are due to poor regulation and the US's current terrible management culture.
I think this is because the culture is quite different in DK compared to the US. There is an expectation of how it will work which is very different by everyone involved.
No, it's because ambulance service in Denmark is a public contract. Private citizen don't pay out of pocket.
Essentially, the state (or region) contracts a company to deliver ambulance services. The contracts usually last a few years and are limited to a region.
Furthermore, the company that wins the contract (usually lowest bidder) is held accountable is too many responses are too slow, etc.. usually with hefty fines.
I guess you can call it privatization, but it's more of a regulated monopoly. Ultimately, these things outsources uncertainty from the state to the private sector. I'm not convinced it's always a good idea, since companies can just factor the cost of fines into the contract... Granted if there is competition, it can drive the prices down a LOT.
And public contract it is in many other places, like where I live (Finland). Local government pays ambulances, I pay a sum to the local government out of my pocket after I have used ambulance.
In the past, fire companies would show up and demand payment before putting out fires. If a payment couldn't be made, the company might negotiate the purchase of the burning property at a steep discount.
Usually credited to Marcus Licinius Crassus, who had a fire brigade for just that purpose. Contemporary of Julius Caesar.
I have a vintage fire plaque next to my front door. They were commonly issued long ago to show that insurance has been purchased. No plaque, no service.
> Later, insurance companies hired brigades to only put out fires on insured properties.
In some parts of the world, insured properties were marked with metal plaques (generically termed "Fire Insurance Marks" [1]) bearing the insurer's symbol/logo. This enabled the insurer's firefighting service to verify that they should protect the building. I've occasionally seen them on old buildings here in the UK. One I remember was a stylised representation of the sun, denoting The Sun Fire Office - which was founded in the 1700s and still exists as RSA Group plc.
Later, insurance companies hired brigades to only put out fires on insured properties. Fire companies might have fought or sabotaged one another in order to win the right to put out a fire and get paid for it.
There are analogies (with smaller consequences) in private tow truck operation.
I'm pretty sure not. The term "fire sale" refers to selling merchandise that survived a fire and therefore would have associated damage.
However the policy of negotiating for property at bargain basement prices while there was a fire next door was very notably one of the ways that Marcus Licinius Crassus (a political ally of Julius Caesar) enriched his fortune.
With our level of inequality, this is coming back. In the last Southern California wildfire, there were reports again of private firefighting groups operating in the Malibu area.
These private firefighters are generally contracted to government agencies. This is the same thing the US government or CALFIRE will do during any Type 1 incident.
The same as a concert promoter hiring off-duty cops.
Ah, I understand that happens, but that's not what I was referring to. I was referring to private homeowners and insurance companies hiring firefighters.
Companies like Rural/Metro, traditionally ambulance/EMS companies, have expanded into private fire, in those places (one notable city is Grants Pass, OR).
This is a wildly different situation than what the GP was talking about. If you have the means, why wouldn't you hire a private crew? The public crews are there to get the best outcome at a macro level, not to protect your house in particular.
It's not clear to me it is different. You still have a divergence of motivational coordination between public fire teams and private ones. For one a private fire team can force public ones to stay committed to areas by not heeding evacuation orders...
Why is this dirty? If you don't pay for fire protection, not even through taxes, why does anyone owe you incredibly hard & extremely dangerous labor saving your house? Firefighting is not a safe profession.
It's not the payment that was specifically dirty, it's that privatized firefighting was a dirty job historically in America. Like competing companies brawling in the street on the way to a fire, dirty.
" the company might negotiate the purchase of the burning property at a steep discount."
This creates the perverse incentive to demand an outrageous price so they can get an property for cheap. Next step would be setting fires to buy even more property.
Without their offer, the market value of the property is zero. Who is going to buy a house that has no fire insurance and is currently on fire? Is a steeply discounted price really outrageous? They might perish in the fire, they might fail to save it. Firefighting back then was no sure thing.
Now, if two crews showed up and bid against each other, things start to get interesting.
If two crews have to show up for a fire... That means higher prices because most of the time there is no fire, so they just sit around waiting -- more people higher cost.
It also means it might be that nobody shows up, because it's a holiday, so nobody was on duty.
Public services are often incentivized to create more work to protect their jobs. Famous examples include whatever department was enforcing prohihbition in the 20s to find other things to prohibit when alcohol prohibition was repealed. In Japan it's common to see unneeded road work because if the entire budget it not spent it will be reduced.
Sabotage and physical fights broke out between fire companies while fires burned. That's a pretty gritty situation.
Allowing fire sales gives way to perverse incentives, like the profitability of arson and predatory pricing of fire fighting fees such that certain portion of victims will always have to sell their property at a discount.
In theory, all of this also applies to a public "firefighting department", no? They too could do a really, really poor job. If this is the culture in a society, where people want to screw each other over, you are likely to get this poor outcome regardless.
But suppose that you have an honorable firefighting department run by an honorable man. Why could he not have set up a private firefighting company instead, doing pro bono work when required? Given the honorable behavior of his company, why would consumers not want to prefer him for insurance than shady competition, which may be cheaper but is also more likely to screw you over when you most need them?
Government-run agencies can be good or bad; private companies can be good or bad. There is no silver bullet and much depends on the prevailing culture. But government can use the threat of force to compel you to pay for their services. If a private company attempts the same, we would call it an organized crime group.
> If it's cosmetic, then I could see the argument.
Then there's another problem: who defines what is considered "cosmetic"? Most insurance companies currently don't cover e.g. facial feminization surgeries for transgender women, even though they're considered medically necessary by WPATH, a document drafted largely by insurance companies [0].
I said I could see the argument, not necessarily agree with it. I mean, in this day and age insurance companies also consider a severe cleft palate a cosmetic surgery and not a necessity. I certainly would not leave it up to them. I think it should be left up to the consult doctor, to be honest. If you don't agree, consult another =/
So prices are excessive because too many people don't pay their bills, leading more people to be unable to pay their bills, leading to even higher prices.
So my 15 minutes $600 allergy appointment that insurance refused to cover (after covering the same damn appointments for 12 years) is that high because of others, or so I keep hearing...
But yeah, I assume it's a combination of:
* Most people pay through their insurance, so they don't have to pay the sticker price or anything resembling it
* Some people going on payment plans and getting stuck in debt basically forever
* Some people bargaining their bill down, paying pennies on the dollar
* Some people going into collection, paying pennies on the dollar
Of course, it's absurd that all 3 out of 4 paths require you to take extra, often really painful steps (collection + bankruptcy, maintaining insurance, or long drawn-out negotiation) just to pay a reasonable price for something that is 100% non-optional and most countries provide for much-closer-to-free. But that's kinda what happens when the system is broken
There is so much good that price transparency would do. Most treatments are not emergency and you can absolutely shop around even if it's not cosmetic. Ever hear of medical tourism? It's not a perfectly 'free market', but it could benefit so much from better information.
Following the current government's cutbacks to the state-run police, residents in one part of London (which is incidentally the "one of the safest ... seats in the United Kingdom"[0] for the current government) have funded their own private police force[1]. This is apparently working out well for them. The issue is that it furthers the division between the rich and the poor, with proper protection from crime becoming available only to the wealthy.
Those aren't police forces. From my reading of the articles, they do not have the power to arrest people, serve search warrants, evict people, etc. They do do detective work and security work.
> A free market police system cannot work, because the police use force against people, which is not allowed by the free market.
The "free market" (in a libertarian sense) does not permit the initiation of force against people who have not resorted to force themselves. If that is a significant restriction on your police department's activities then there is something seriously wrong with your police department.
> Worse, the police aren't going to arrest people who pay them.
If they aren't willing to arrest anyone who pays them then no one will bother to pay them. Resolving disputes between two paying customers is part of their job description, and they won't retain customers if they're seen as biased or corrupt.
Arresting someone suspected of a crime is not responding to initiation of force, because the suspect hasn't been convicted yet.
There are private police forces, we call them the "mafia", and people pay them for "protection". Sure, they're corrupt, but with no government funded police, whatcha going to do about it?
> Arresting someone suspected of a crime is not responding to initiation of force, because the suspect hasn't been convicted yet.
If the suspect is eventually convicted (of something at least as serious as kidnapping) then that conviction retroactively justifies the arrest.
If the suspect is never convicted then arresting them is little better than kidnapping. If the police at least had a reasonable belief that the person they arrested would be convicted then it falls under the heading of accidental harm rather than negligence or malicious intent, which shields them from retribution, but that doesn't avoid the need to pay restitution to make their victim whole.
In short: Be sure you're arresting the right person, and don't do anything to them in the process which you'd find difficult to set right.
Arresting someone is no joke and cannot be done using free market principles.
Enforcing laws is the point of government, and a free market requires enforcement of laws. This is why countries with a non-functioning government are an anathema to business, not a paradise.
> privatized ambulance services (which are outrageously expensive, on the order of $12,000 for the ride
What state? In Washington (and many, though definitely not all), ambulance prices are regulated, for this reason. When I worked private ambulance a couple of years ago it was $680 + $8/mi.
Seattle, but I guess I had some perks. I didn't itemize it. That was for everything. They did not take me to the closest hospital, either, for some reason.
Although most humans are perfectly ambulatory, there are innumerable reasons why they don't get to "choose where to live". Income levels, employment availability, schooling, racial pressure, and many more factors come in to play. Not everyone can physically fit into the best areas. The best areas for emergency services don't necessarily align with the best education (although very high income levels tends to align with both). This comment essentially amounts to "Well if you don't like being poor, then just obtain more money". While everyone cannot live in the best places, nearly everyone will need emergency services at some point in their lives. Also, OP didn't suggest getting rid of private care entirely. A public option does not preclude a private system. If the private system provides value, it will likely survive.
The biggest complaint of public systems is wait times for services. If the rich can jump ahead and get treatment ahead of the poor then congratulations you've built a system that enables the rich to pay for life saving operation, while the poor do not. Right wing parties then spend their time in power weakening the public system so those wait times increase or quality of service lessons.
Another way of looking at it is we don't have private firehalls. I'd argue healthcare is the same.
Interestingly we are moving towards having private security forces, enabling some to be more safe than others. I don't agree with that either. So, maybe it's a philosophical difference, I feel strongly that for basic rights (e.g. health, safety) we should all be treated equal, and money should not grant me special treatment.
> If the private system provides value, it will likely survive.
And if it doesn't survive, good! Industries don't have an inherent right to keep existing if they don't fill some useful function. Refusing to implement an otherwise desirable social program because it might cause an existing industry to become obsolete is far and away the most anti-capitalist argument I see self avowed capitalists make.
You haven't rendered private health care "obsolete", you've just forced people to join your public system. Obviously people aren't going to pay for two health providers (unless the public system is completely inadequate). That does not imply that the private service is uncompetitive. There can be no competition when one service must find willing customers while the other takes its funding by force.
This is the same issue with toll roads vs. public roads. Imagine there are two similar roads leading from A to B, one a toll road and the other public. The toll road charges drivers $1 per 100 miles. The public road is free to use but costs every driver $5 per 100 miles in taxes. Which one do you think drivers will take? The more expensive public road, of course—because they're already paying for it, whereas the toll road would be an additional expense.
True, but that's subtly different than the point I'm trying to make.
Imagine your hypothetical were reversed. Imagine we already had a network toll roads priced at an average of $5/100 miles, and that we had a plan to build and maintain public roads at an expected cost of $1/100 miles. There might be plenty of good reasons not to prefer the more efficient public plan, but the fact that it would put toll road vendors out of business isn't one of them.
Capitalists don't mindlessly prefer private things just because they're private. We like them because they tend to self-optimize for efficiency more effectively than a centrally managed system can. Usually. There are a whole thread's worth of reasons to believe health care is one of the exceptions, both in theory and in practice. If that's the case, then refusing to implement a superior public system solely because it would decimate the inferior private one is just another flavor of the same anticompetitive protectionist bullshit that makes tarrifs and professional licensing and restrictive zoning and a dozen other types of cronyism distasteful.
> There might be plenty of good reasons not to prefer the more efficient public plan, but the fact that it would put toll road vendors out of business isn't one of them.
I have no particular sympathy for any private provider that can't compete with other private providers in the market. However, from my point of view private and public providers aren't in the same market, or even providing the same product: one is simply selling access to roads, or health care, while the other is giving these things away bundled with the dubious "service" of compelling other people to pay the bill. To me that bundled "service" is of immense negative value, and the existence of the public system is driving the providers of the unalloyed product I actually do want out of the market. So, from my point of view, the fact that the public plan would put the toll road vendors out of business and thus leave me with no decent travel options that don't involve externalizing the cost onto others is actually a good reason to oppose the public plan. (There are others: While I don't want to participate in this externalization process as an unwilling beneficiary on moral grounds, I'd also prefer not to become one of its victims.)
Of course, if there exists a way to build and maintain a road at a cost of $1 per 100 miles, there is no particular reason why that cost couldn't be payed through tolls instead of taxes, thus giving us the best of both worlds. There are basically only two ways which public services can manage to cut costs compared to a private provider. One is by externalizing the cost of the service onto non-users, and the other is by being exempt from regulations which private providers would be forced to follow (or, equivalently, having the regulations tailored to suit the public service by sympathetic legislators).
> Capitalists don't mindlessly prefer private things just because they're private.
Whereas libertarians such as myself do prefer private things simply because they're private, which is to say: because they don't involve the use of force. Which is not to say that there aren't practical reasons to prefer private systems as well—just that, to me, any system which involves force is automatically more costly than any voluntary system, which makes these other reasons more-or-less irrelevant.
True to an extent, but in any city (100,000 or more people) there will be two hospitals and so the poor can choose which of the two to use. Note that by poor choosing only a small number need to have the practical ability (which is to say the almost middle class) to choose since a hospital will want to attract them and that ups service for everyone even thoose who couldn't reasonably get to the other hospital.
You know the hospitals in this scenario wouldn't be next door to each other, right? The extra 30 minutes of driving time it takes for me to get to my second-closest hospital could easily mean life or death.
For the person 15 minutes from either hospital there is a choice though. Trying to attract those middle people results in better services for those who are clearly closer to one hospital.
In addition to what other people have said about the impracticality of assuming choice, said hospitals will often not offer the same set of services, or will specialize in certain aspects of them.
You rarely have this choice in practice. Plus, as the article points out, even if you chose an in-network hospital you may well be seen by an out-of-network doctor.
In a free market the incentives are different though. in-network only is a thing because hospitals don't have any incentive to ensure everyone is in network.
>> You simply don't get to "shop around" for emergency services
> You do actually, by where you choose to live
That's wrong on so many different levels:
1) The emergency service provider is unlikely to tell you how much anything costs in reality ahead of time.
2) Not all emergency services providers offer the best price for all services, or are even equipped offer all services.
3) Many medical emergencies are completely unexpected, you have no idea what kinds of services you'll actually need in an emergency.
4) You're not really talking about "where you choose to live," but rather "where you choose to be at all times." Do you really have a choice of ER if you have to stay within a couple miles of it at all times to make sure you'd always be taken there in an emergency?
I don't think there are many places outside repressive states where private healthcare is actually banned? Even the UK's extremely centralized NHS runs alongside a private system. It actually has the effect of making the private system cheaper since they don't have to cover everything or everyone.
That's a stretch. There are still a lot of private clinics operating in Canada for various grey-area medical needs. Also, Canadian (really, provincial) healthcare doesn't typically cover dental, and there's a massive grey area in rehab and injury recovery where private clinics abound.
Certainly it is true, I agree, that emergency hospitals and ambulances are public-option only.
Based on the success of private MRI clinics, I would say the demand is quite high for selective procedures. Either procedures that are relatively cheap but have very long wait times or procedures where patients are willing to pony up for expertise (joint surgery).
"Move to a better market" seems like an argument that some local marketplaces have failed. The whole value proposition of the free market is that it improves the available services and prices through competition. If I have to move somewhere else to find a market where this is true then the local market is clearly failing and the free market idea doesn't work.
Said another way: Should I then also move when I want to find a better price on milk?
"Move to a better market" also fails with regards to the fact that you may need the services when not at home. If you were working in sales would you refuse to do an onsite meeting with a client because their office is near a terrible hospital?
Did they leave Hawaii only because of the price of milk or because staple goods in general were more expensive than other places? In this case the market is working but it is a market where cities compete on cost of living, not milk. In that case moving makes sense.
> I think there's merit to investigating public health care. That line stops for me in eliminating private care.
Has anyone proposed that? If not, I'm not sure why you mentioned it.
Anyway, I suppose I can see the benefit to private doctors, but if private emergency response services for individuals are popular, then something is fucked, as your link demonstrates. Not saying they should be banned, but they shouldn't have to exist in a properly-run society.
What serious single payer proposals have been put forward that would eliminate private-pay, private insurance, or private care?
I've never seen one.
In fact, almost all "single payer" health systems that exist in other countries have private care and private insurance options. For example, such options are available in both the UK with the NHS and in Canada.
I've never once spoken with an advocate of single payer who wants to eliminate private pay, private insurance, or private care.
I am also an advocate of single payer, and I wouldn't advocate eliminating any of those things.
It most definitely means banning private insurance (not private care). Thats why its "single". IT has to, because otherwise it would have to compete on the market as any other plan, and it would fail because all private insurance would dump the expensive patients on to medicare, which will need to either increase prices or increase taxes to survive.
Plus the whole point is to eliminate dealing with the adminsitrative burden of claims and billing. IF you just add another insurance, you just make it worse.
No, the single payer portion doesn't have to compete with other plans. The other plans supplement the single payer insurance. E.g. single payer will cover everything up to a certain amount, and then you can buy a private plan to bring that amount higher, or maybe cover non-essential extras.
Ofc you can invent an infinite amount of models, and Sanders has not specified which one clearly yet afaik.
In the case that Medicare is expanded and is optional, medicare will have the following fair challenges: it has to compete with other private insurances, which means is has to pay as much, and any administrative cost dissipates, in fact it gets worse, as providers still have to do multiple billing.
If it has to charge ,it will also have to turn away patients. It it doesnt charge, everyone will have medicare, and private insurance will not provide services that medicare gives for free or without restriction.
Up to this point, "single payer" has not provided a single cost reduction means.
Didn't know this existed, thanks for sharing. (I got my other impression by Sander's fb which I follow).
If I understood this text correctly, this will be:
An optional insurance plan (SEC. 105)
An insurance that gets tax benefits (SEC. 701)
An insurance that has incredibly perverse utilization incentives (SEC. 202)
I would be quite on board on this plan if it weren't funded with special taxation, and it gave itself no promise of benefit for being the state, not because I think its a good one, but because it will confirm its a terrible one.
"Single payer" means the state pays through the tax system. It doesn't mean banning private insurance, which coexists happily with the NHS. Whoever told you otherwise has been misleading you.
This is quite evidently rubbish, as demonstrated by the fact that I live in the UK, receive most of my healthcare for free, on the NHS and also have private medical insurance (provided by my employer).
The problems the UK has and the US has are completely different. Starting with the fact that the model of providing both a public and a private insurance system in the US will not save a single buck.
Saying that Sanders is advocating the elimination of private health insurance because he favors Medicare for all is just as inaccurate a saying that anyone who advocates for improving public transit is trying to eliminate all privately owned vehicles.
I'm sure there are plenty of things to dislike about Sanders or anyone else whose political leanings tend toward things like publicly-funded healthcare coverage, it should be possible to come up with a few of them without blatant misrepresentation
Both Medicare for all and Medicare buy in plans wouldn't eliminate private health insurance.
Private health insurance would still exist under both plans as supplemental coverage that people could buy that would cover things that were not covered by medicare.
The markets would be potentially reduced (drastically with medicare for all, moderately with a generally available medicare buy-in), but it's totally false to say they would be eliminated under those plans.
Are they on felony probation? I have moved a few times with little money for better opprotunities. It seems like most people are just psychologically conditioned to die near where they were born. Most people just think the hardship is worth it, which is very much a choice. It is literally cheaper to move to most of the USA than live another month in places like california or nyc.
This ignores a huge array of practical reasons why people stay where they are.
Family networks are probably the number one reason. Child/elder care, food/housing/etc. sharing and a lot more are all major factors that by definition do not show up in economic reports.
And that's before people's "psychological conditioning" (which some people refer to as "being part of a family") is considered.
I, too, have moved around a lot - across the US three times, overseas and back once, with smaller cross-state moves in between. And it has worked out for me. I am also not married, have no kids, am not very close to my family, have a high degree of risk tolerance and high attraction to novelty, and seem to need a smaller community of folks in my life than many others.
I'm also well aware that I am an abnormally-unattached person. Most people have significantly more difficulty uprooting and moving somewhere else. Writing that off as conditioning that interferes with economic concerns not only fails to recognize very real economic aspects that don't show up a bank account, but also fails to recognize that humans value things other than money.
We do not have a free market. Most people get their health insurance from their employer - you cannot reasonably get insurance elsewhere (the same plan I have now for $100/month would cost over $1000/month, but I can't take that $1000/month to anyone else if I don't like my insurance so I accept it). This keeps me from taking a long leave of absence to live off my savings - until I quality for retirement (medicare).
In a true free market you would have more choices: most emergencies are close to home so you are likely to know which hospital is a good deal.
Of course there are still the emergency while on vacation, and the sudden collapse where a bystander brings you somewhere which are harder to handle. Though if there really was a free market there is incentive to handle those well - if only because the system is designed for the majority of cases where they have to handle it well or you would have gone elsewhere.
> We do not have a free market. Most people get their health insurance from their employer - you cannot reasonably get insurance elsewhere
What you are describing are in fact the freest parts of the health insurance market.
Employers, quite rationally and of their own free will, choose to offer health insurance as a benefit because it attracts and retains talent better than other similarly priced incentives. The fact that you're hesitant to take a leave reveals that it's working.
Insurance companies, quite rationally and of their own free will, choose to offer steep discounts to purchasers who buy for a large group of people instead of just one or two. It reduces their marketing costs and gets them a better balance between sick and healthy clients.
You, quite rationally and of your own free will, choose to both accept your employer's offer of discounted insurance and to remain at your position longer than you would otherwise prefer to maintain that insurance coverage. In fact, the only thing you foresee changing the status quo and allowing you to retire at all is when you become entitled to benefits from the state in the form of Medicare.
Nothing in the phrase "free market" implies the resulting equilibrium won't conspire to limit an individual consumer's choices.
> Employers, quite rationally and of their own free will, choose to offer health insurance as a benefit because it attracts and retains talent better than other similarly priced incentives. The fact that you're hesitant to take a leave reveals that it's working.
This is false. Offering insurance as compensation started during WWII when wages were frozen by the government. Employers found other ways of attracting workers.
There is also the fact that employer-provided insurance is almost entirely untaxed. A dollar in direct employer insurance is essentially a dollar directly to healthcare spending. If it goes through to the employee, that's reduced to at most $0.70 due to payroll taxes, and often much lower. This provides and incentive for both employers and employees to prefer employer-provided insurance.
Compared to these, the effects you described are negligible.
> Offering insurance as compensation started during WWII when wages were frozen by the government.
Absolutely true, and those regulations haven't been in effect for the better part of a century now.
If you want to argue that long-discontinued government programs can entrench systems that continue to produce market distortions today then I'm happy to agree with you, but that's the exact stated rationale for the broad suite of civil rights regulations that in my experience most libertarians oppose on economic freedom grounds. I don't think you get to have it both ways.
> There is also the fact that employer-provided insurance is almost entirely untaxed.
Again, true. But I think you're drastically underestimating how beneficial it is to an insurer to cover groups of mostly healthy people (i.e. a company's entire labor force) instead of groups of mostly sick people (i.e. those most motivated to acquire private health insurance).
In order for the market for healthcare to be truly free, in the sense you're describing, medical professionals would need to be willing to consistently refuse service to people who can't pay, which is frequently in violation of their professional ethics. Since that (entirely private and voluntary) market distortion isn't going away any time soon, insurers who can find other mechanisms to incentivize relatively healthy people to contribute to the risk pool can provide the same coverage at a lower cost per person.
That means that, tax incentive or no, insuring a broad cross section of mostly healthy people as a group is always going to be cheaper than insuring them individually. And the more healthy people can be incentivized to sign up, the cheaper it becomes for all participants, which gives whoever is making decisions on behalf of the group an incentive to encourage as much of their potential pool to participate as they can. The taxes reinforce this system, but it would still be self-perpetuating without them.
"Compared to these, the effects you described are negligible" is also a positive claim, and I did at least as much work sketching out why I believe my claim as you did sketching out why you believe yours.
I don't dispute that the current status quo emerged as a direct result of government intervention. Again, I agree with you that it can be traced back to WWII era wage controls.
My claim is that, once established, the resulting equilibrium is economically stable. Your claim, as I understand it, is that it's not.
Given that the price controls that we agree created the current status quo were replaced by significantly less coercive tax incentives decades ago and to the best of my knowledge the industry hasn't attempted to realign away from employer-provided insurance since then, I don't see a reason to privilege your hypothesis over mine.
Employers offering health insurance as compensation is a legacy of wage controls from WWII. Employers were prohibited from paying market-level wages so they offered health insurance. It is entirely a result of non-free-market government controls.
"Employers, quite rationally and of their own free will, choose to offer health insurance as a benefit"
Sorry, it's because of tax breaks, not pure rational free market. All the rest of what you describe are unintended consequences of that non-free-market tax break that seems like such a good idea on the surface.
Is this the magic phrase that means "free market" to you? Because the word "free" is in it?
We could say that the USSR, quite rationally and of its own free will, sent millions to the gulags and forced labor camps to create widgets. Cute, right? Hey, they did it quite rationally (after all, the labor is way cheaper when you're using prison camps) and of their own free will, therefore it's the free market!
We can't say the prisoners chose to enter the gulags of their own free will, though. Since freedom of contract requires all parties to enter into the agreement consentually, that means that the market for gulag laborers is not free.
The US governent does create incentives which change the optimal behavior of rational actors in the health insurance market, but those actors still have very broad latitude to respond to those incentives as they see fit. That's not perfect economic freedom, but it's a lot closer to it than the systems most other countries use. It also gets noticeably worse results on a broad variety of metrics than the systems most other countries use. Make of that what you will.
And the reason that healthcare costs $1,000/month, is because this system has caused prices to spiral completely out of control, beyond the level of lunacy. Due to multiple agents in the market behaving of their own free will.
Every other developed country manages to provide equivalent care for a fraction of the price. So much for the free market optimizing for better outcomes, eh?
It's about the same price, except you're totally covered and it includes your pension. Oh and you don't even see the money, it's paid by your employer directly.
You are missing one critical point though: If I through my own free will decide that I want a different plan I need to come up with that $1000 difference that my employer is kicking in for me. If I could get that $1000 back to spend on my own I'd have the ability to choose a $1300 plan instead of the $1200 plan (for $1100 because of the factors you sight), that extra $200 out of pocket is much more affordable than the extra $1200 I have to come up with now. Or maybe I don't want all the perks of my work plan would want a $1000 plan that doesn't cover something in the work plan.
Gee, that sure does sound like a private dispute between you and your employer to me. If you want to opt out of your company's health care plan then you're more than welcome to go attempt to negotiate with your manager about raising your salary by the amount of their health care contribution. Best of luck to you.
Group plans distort the risk pool and are disallowed in countries like Switzerland that require health insurance. The major problem with the ACA is that they didn’t eliminate employer group plans, leading to an apartheid like situation where those higher income people having a discounted rate because the group pool they are in is much safer than the pool poorer people on the individual market are put into.
What is worse is that poorer people in the individual market can’t even get a tax break for buying health insurance (not until it becomes 10 percent of their income and they decide to itemize). In contrast, employers buy health insurance for their employees tax free. This literally screws poor people in service jobs by making them actually pay much more for health insurance (even including what the employer would pay).
$1000/month is probably a heck of a plan or in a really expensive market if it's for a single person, and it's probably still decent for family coverage. If it was through the ACA Exchange it's probably also a Gold plan that when you look at maximum out of pocket costs simply loads up the premium rather than the OOP payments.
In California the cheapest plan is about $450/month from the Obamacare marketplace, so I'm not sure $1000/month is going to be that outstanding. And as I understand it, $450/month is about the minimum a plan can cost, since Obamacare outlawed the old high-deductible catastrophic insurance.
Also, I doubt that the average family has $12,0000 of medical bills a year, and would be better off paying out of pocket except for that fact that bills can be randomly expensive.
Obvious typo aside ($12K not $120K), this is entirely the point of insurance. If the average person would save money by buying insurance, then the insurance company would be losing money. In general, if you can afford to pay for the worst case scenario, you are always better off without insurance (BTW, this includes "extended warrantee plans" hint, hint). Insurance is for things where your can't afford the worst case scenario.
Yep. You get a choice to be gouged on premiums or essentially gamble, hoping that life doesn't reset your savings to $0 (or lower) by getting in a car accident or something.
It's actually not quite as bad as that. My personal preference is for things with copays instead of coinsurance, but beyond that if you look at the maximum out of pocket for most of the plans there's not that much difference between Bronze, Silver and Gold. The big difference between a lot of them is whether it's frontloaded (high premium, lower deductible, higher percentage coverage, lower copay) or backloaded (lower premium, lower percentage coverage, higher deductible, higher copay). There are also big differences in the size of the provider network, so it makes sense to check your preferred physicians (if any) and hospitals.
The thing I'd be very wary of is things like "50% coinsurance after deductible" which I think translates to "this is catastrophic coverage, you're responsible for all 'regular' medical expenses and we'll cover things like hospitalization."
None of the selection is easy, even for professionals (https://armandalegshow.com/4-why-you-and-i-will-likely-pick-... but all of the shows are interesting). Still, if you're in one of the states that allows a little longer to get on an Exchange plan and you need one, do so.
Emergency situations are exactly what insurance is for. Emergencies account for a minority (<15% IIRC) of health care spending.
Nobody advocating for free market healthcare is expecting people to shop around in emergencies. People are expected to shop around for good insurance plans which will cover emergency situations to their satisfaction. That is why many free market healthcare supporters also support removing the incentives for employer-provided insurance plans:
- remove the tax exemption for employer-provided insurance
- add a tax exemption for individual/family insurance, including a rebate for the amount of money payroll (social security and medicare) taxes would affect the amount of money available for that insurance
This way, people don't lose their insurance when they lose their job, and people have more insurance options. This would also likely have a beneficial affect on insurance competition.
"That system" as described by parent has not been tried, at least not in recent memory. What we see happening now are thousands of unintended consequences from government meddling with the free market.
I think you mean from the "free market" - which is neither free, nor genuinely a market - usurping the good-citizen responsibilities of mature and sane government.
Proper insurance pays you for insured losses you incur.
When my car is damaged in an accident, I take it wherever I want to have it repaired. I don't have to think about whether the shop is "in network" or not. My insurance pays for the cost of the repair, up to the limits of my coverage. Simple.
I'm not sure if you have ever done this but there are a lot of caveats to that. Many car insurers will have you shop around for a good price, have you pick one of their preferred repair providers or may decide that damage you claim happened in the accident was preexisting. The job is called "claims adjuster" and I'd be surprised if no one from the insurance company visited you when you filed a claim.
Is there any chance that facilities that don't "accept" my credit card would be able to:
* Not inform me they don't accept my credit card
* Provide the goods and/or render the services
* Charge my 10 times the standard price for those goods and/or services because my card was not accepted?
No sane person would agree that this would be an acceptable regime for credit cards. Yet it's the world we live in with health insurance.
A "free market" is only effective with price transparency and discovery mechanisms. This is not possible in the current healthcare and insurance system as it exists today.
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Aside from that, you failed to even engage or address the following points from my earlier comment.
> Further, even if the facility you visit does accept the insurance, that's no guarantee that all doctors within that facility accept that insurance.
> Even further, there's no guarantee you'll be conscious to validate that you go to a facility that accepts your insurance.
I think both of those points address and rebut your "check who accepts it" argument. Do you have any response to those?
If you read the article you'll find that the problem is that while the hospital may accept your insurance, a particular doctor won't. Also for some reason some doctors don't even know what insurance programs they'll bill.
...because even if you end up at a hospital where your coverage is great, they often have doctors or providers that won't accept your insurance, and there's just about no way to know this beforehand.
Well I don't have any legislation on the docket anywhere, but I would fully support the complete separation of health insurance from employment compensation. It's just another layer of obfuscation between the consumer and provider in the marketplace.
I'm doing it, and a few other libertarian type people. I agree with your statement though: we are a minority. Most who call themselves free market do not see how employer provided plans make things worse.
If it's such a free market, I implore HNers to explain what it might take to start your own free market hospital in the United States. Let me know what regulations you'll need to meet. Compare to opening a cafe.
And I'm not saying a hospital or a cafe ought to be at all similar. That's not the point. The point is how odd it is to pretend that health care is a "free market" in the current state as some rhetorical device to associate these surprise fees with free markets.
At a cafe, you don't get charged for using a stirrer or spoon or napkins. A cafe doesn't charge you for sitting on a stool. Free market health care would operate in the same way, if it existed. You get charged for your operation, they don't add in fees for specific items that you needed that would reasonably be expected as part of the process (a Tylenol pill, using a tissue, the gloves your surgeon wore). And again, I'm not suggesting this is how it ought to be, but let's not be disingenuous and pretend that absurd, opaque prices are somehow a result of a free market.
> Free market health care would operate in the same way, if it existed.
Any particular reason you think that?
Cafes sell standardized products--if we order the same small latte, we get the same thing and pay the same price. If you "require" something different, you pay a different price. Almond milk, for example, is $0.50 extra, near me. Flavored syrups cost a quarter.
Medicine is a lot less one-size-fits-all. Your fractured arm could be harder to repair than mine and thus takes longer or requires more supplies (and those aren't cheap--bone screws can run $40+/each). Maybe a diagnostic test is inconclusive and needs a more expensive follow-up. You can't really know how some of this is going to go beforehand. I suppose some places could offer a prix fixe option, based on their expected cost + a safety margin. I bet many wouldn't though, because the variance can be huge.
The problem is that neither models work and both have shortcomings.
In the US model healthcare is a profit center which allow those who can afford to get help and those who can't various sub-optimal variations of help.
In the ex. Scandinavian model healthcare is a cost center and there is a set budget each year which the providers need to function within. This means that prioritization needs to happen and various illnesses and procedures are limited to x amount a year.
Healthcare is a wicked problem cause it's a good thing that it's a profit center in the sense that it provides budgets to do more research and it's a a bad thing because it makes it unreasonable expensive to to not have healthcare.
In the scandinavian model it's a good thing that everyone gets treated (more or less) the same but a bad thing that they don't have as much capital to work with invest in new machines and that there are budgets which limit how much the government will spend on various procedures.
Personally I would like the system to be so that you pay to get normal check-ups, there is no limit to how many doctors are allowed in different parts of the healtcare sector and no one goes bankrupt from getting seriously ill.
That would at least help with some sort of a balance I think.
Of course the problem is that the US is such a big country with huge immigration and scandinavian countries arent so it's always hard to compare.
> Of course the problem is that the US is such a big country with huge immigration and scandinavian countries arent so it's always hard to compare.
US Population: 325 million
US Immigration: 1.5 million (2016)
EU Population: 512 million
EU Immigration: 2 million (2016)
(taken from top Google results)
It's fairly accurate to say that, compared to the US, the whole of EU has a "Scandinavian" model of health-care (ie, states guarantee good health-care services to everyone).
You can get downvoted by sounding like a knee jerk racist. Go spend a little time looking into where healthcare money is actually being spent and written off as bad debt in the US then come back with numbers and sources. If you can back up that illegal immigrants are the source of healthcare cost issues in pretty sure we'll all be impressed.
That's not what I said at all. I was explaining how the US system is very different than the Scandinavian system. That's all. You can't compare them at all.
Whatever racist undertone you heard there was your doing not mine.
Any time you're in an online discussion of US healthcare expenses and use the phrase "11 million illegal immigrants" you've pretty much just placed yourself into a category as far as almost anyone else reading the discussion is concerned.
That may not be what you meant to do and that categorization may not be fair, but it's one of many possible trigger phrases.
Its pretty obvious to anyone who is not looking to get triggered that there is nothing racist nor fingerpointing in what i say. The illegal immigration is used to illustrate one of the things that make the us system wastely different especially from the scandinavian system even though they are always used as an example. Almost every person there is has lived their whole life there.
And given i dont actually give you any other reason to think i am racist its pretty absurd that you decide to make that interpretation of what i say but unfortunately its becoming more and more the norm. Try asking me what i mean next time instead of just throwing words around accusing people you dont know anything about for being racist.
Your comment was making an implied link between the difficulties in the US healthcare system and the 11 million illegal immigrants - whether you intended or not (if you didn't, there'd be next to no reason to bring up illegal immigration at all).
Why would illegal immigration have any impact on healthcare, unless you were implying that they were a drain on the system (which is an assertion needing to be backed up by facts)?
My comment was making an implied link between many different things, illegal immigration being one of them. As it has an impact on the complexity os the US healthcare system and is one of the reasons why you can't just have a Scandinavian model.
There is a world of difference between a small homogenous group of countries where everyone pays more or less the same taxes their whole life and where immigration is fairly limited and then a country like the US where people arrive often later in life after they grew up other places and before they start paying taxes to the system.
Healthcare budgets are built up over decades not just year over year. It's based on people when they are young and don't cost too much for the system pays to the system so that when they grow older they are offset by younger generations again.
11 million people who live partly outside the system even when they pay taxes is a big number and since they live concentrated in around 20 metropolitan areas almost half of them in 3 states that make them an actual issue on top of the other things as they are not just distributed across the entire country.
In what universe it's racist to point out that illegal immigrants adds to the complexity of why the US can't have the scandinavian model is beyond me. You are the only one making illegal immigration a matter of race for some absurd reason.
There isn't a single EU health care system. Each country still does their own. Maybe each US state could do their own, but there are huge concerns about freeloader problems since we have unrestricted movement between states in the U.S. From what I've read the systems of European countries are being threatened by the freeloader problem that increase immigration as of late has caused.
There is unrestricted movement in the Schengen area, which is a subset of 21+ states of EU for the past 10 years, with current population of 420 million people.
(8+ state for the past 21 years, those 8 states having population of 291 million today)
That doesent mean the healtcare system is the same, its not. Again you probably need to do a little more studying of scandinavia and the EU cause you are getting some fundamentals pretty wrong.
My previous Norwegian employer gave me private health care as a perk. You had to get a recommendation from a government general practitioner first, but after that, it was all private, presumably to get employees back to work faster instead of having them wait for months for an operation.
Of course, most people/companies can't be bothered with this, since the government health care is good enough, but paying for private healthcare is definitely a non-theoretical option.
Of course the problem is that the US is such a big country with huge immigration and scandinavian countries arent so it's always hard to compare.
I really don't understand why it being a big country would make things difficult. Any sane person would adjust the needs dependent on state and smaller. Norway's population is about the same as Indiana's, but is more sparsely populated - so some of the same problems as the western states. The benefit of the US being large would be that there are more pools to draw money from. And there are just as many opportunities to save money.
For example, Norway will send a nurse to one's home up to 6 times a day. For free. Even if you live on a cabin on an island or on a mountain. Why? Simply because it is still cheaper than a nursing home, overall. And as a bonus, folks tend to live longer and be happier with life.
As far as immigration goes, it is impossible to compare. But: Not every immigrant gets free healthcare. I get the state healthcare because my immigration status is family immigration - my spouse is Norwegian. If I were here for a job, however, I'd have to pay for health insurance. Of course, they'll still treat someone that pays cash and still treat emergencies. I don't really see how this would be an issue in the US either so long as the laws were set up correctly.
I'll further add that I think the healthcare is a bit different if folks are coming from an EU country - there are agreements in place about health care and things like that. Again, I don't see why this wouldn't be the case in the states.
That's because you haven't considered how big the US is and you haven't considered that the US is mostly a land of immigrants not a land of people who lived their almost all their lives for several generations.
Healthcare systems like the scandinavian are established over decades as the young needs to pay for the old until they get old themselves and have to get covered by the young.
This kind of system is more or less impossible in the US and it would be extremely expensive.
That doesn't mean the current system in the US is any good, it's horrible to say the least. But the scandinavian dream isn't possible in the US and I have yet to see anyone showing any actual proposal that would work given the setup with federal and state and what they can decide.
*That's because you havne't considered how big the US is and you haven't considered that the US is mostly a land of immigrants not a land of people who lived their almost all their lives for several generations."
I'm American. The first one is easy enough to consider. I can drive to Sweden in the same or less time than it would have taken me to get out of Indiana. I know it is big. I just don't see how that is an excuse. It isn't like you can't customize health care to a geographic area so it serves the needs of the people best. There are multiple ways to do that.
And that bit about immigration? That's propaganda 101 in school. Trust me, I'm aware. I fail to see how that is an issue. Most folks in the US aren't new immigrants: They are at least 2nd to 3rd generation. Even if I take the higher numbers I saw - around 25% - most folks are still just Americans. I don't really see how that affects anything. Don't most folks still want healthcare? Do immigrants avoid health care? Don't most of these families have at least one working adult paying into the tax system?
And of course it would be expensive - the current system is expensive. But it isn't efficient now, and that can easily be changed. Just because you haven't seen a proposal you'd be happy with doesn't mean it can't work. Most of the proposals I've seen in the US are more focused on preserving health insurance companies instead of focusing on getting health care ot everyone.
These countries are homogenous which also means politically. You will be hard pressed to find any real fundamental political differences between parties in the scandinavian countries.
They are all on the left side of Sanders.
Furthermore, it matters quite a lot that you are dealing with a fairly limited population who all suffers from more or less the same issues because they genetically are alike.
And again keep in mind the Scandinavian countries have budgets which means that you can't always get the treatment you want/need even if you had the money.
Again I am not saying the US system is good it's obviously not.
But a single-payer system in the US just isn't realistic or attractive for that matter.
The problem in the US is the price, but that price is held up artifically not because of the market. So we need to remove the things that make the price go up that hight. That IMO would be a much better approach than trying to mimick scandinavian countries as great as they are for their population (but definitely not without it's problems)
Again, I don't see the size as anything but an excuse against it. Surely in the US, it would have to be adapted to different areas' populations. I'm not convinced Indiana is so much less homogenous than, say, Sweden. They are definitely not all on the left side of Sanders.
And again keep in mind the Scandinavian countries have budgets which means that you can't always get the treatment you want/need even if you had the money.
I don't know where you get this sort of information. I will never not be able to afford my medication. I broke my arm and got immediate, affordable treatment and had paid time off work even though my job was seasonal. In the US, with insurance, I would have struggled, not only with hospital bills, but with work. If you have an issue that they cannot treat in the country, you can travel outside of the country for treatment. Even if you are poor and have no money - the state does that. There are private hospitals and clinics around - if you have money, you can use them. They aren't always that much more expensive and the waiting period for non-emergency stuff is less.
The bottom line is that you are against a single payer system. That's fine, be honest, but please make sure your actual facts are facts instead of things people hear.
It sounds like you don't want to see the problem which makes it hard to have any discussion.
The size is a problem given that you would need to be able to offer consistent care across the nation this is exactly the kind of problems that single payer systems deal with. They are an actual problem in the scandinavian countries and these countries are small. Federal is federal.
I am not against a single-payer system. I grew up with one as I am Danish so I want a single-payer system. Especially as I have been having 2 melanomas and might likely get more and live in the US. I just wont work here and I won't be able to get the kind of care that I get now.
I know both systems pretty well that's where I get that information from I been living in both and experienced both.
> This kind of system is more or less impossible in the US and it would be extremely expensive.
That's literally how Social Security works, and the fact that more guest workers pay payroll taxes into the system than are eligible to collect benefits from it actually makes it slightly cheaper than it would otherwise be.
That's how social security works and it works great in countries with little immigration not in countries like the US where there have historically been.
I think it depends on the job. If you work for a foreign company and are temporarily in Norway (e.g., spending a quarter at the Olso branch from your HQ elsewhere), you're on the hook for your own insurance: https://helsenorge.no/bo-i-utlandet/posted-workers-outside-t...
Another thing to keep in mind is the Scandinavian countries are resource rich with comparatively low populations - Norway has oil, Sweden has timber and iron ore, Finland has timber, etc. These helps build excess in their budget
I think everyone acknowledges the current system is the worst of all worlds. _Both_ the left and the right are correct in my view: (1) single payer universal healthcare or (2) removing a ton of the existing government regulations and forcing healthcare to behave more like a free market, would each be better than the existing system.
I don't think "free market healthcare" is oxymoronic though. It does not seem to me impossible (logically...maybe it's impossible politically) to remove the current incentives that prohibit price discovery and/or enact laws and regulations that incentivize it.
Legislation requiring up-front presented costs to be honored and any additional procedures/costs to be cleared with patient consent as they happen (or a consent waiver obtained from the patient with a promised limit or incentive such as overall discount) might be an improvement. Or it may increase costs for the worse. Who knows.
Careful there though. If a surgeon is operating on cancer and discovers that the tumor is much larger than expected the operation will take longer - be more expensive - or the surgeon does the operation as planned and then charges even more for the second surgery to remove the rest. Or maybe all operations are estimated as the worst case and so you end up with no more clue about what you will pay than today - in some imaginable worst case this could be a five million dollar operations, so even though 99% are only fifty thousand you get that high estimate.
Which is to say don't propose something until you understand the unintended side effects. You can get your desired result but while making everything worse. (this paragraph applies to everything in politics)
I mean, I guess, but that's kinda a worst case. My vet, for instance, quoted me up front, made me sign to say that I was willing to pay (I think) up to $x000 and notified me that they might contact me if they need to do extra work, and then did the surgery with an up front payment. They ended up refunding me money after the fact.
No reason we can't have something similar that in US health care as far as I'm aware, at least for the happy path where the patient is lucid and in a reasonable state of mind up front. But then again, why do we have to worry about this when plenty of countries have a basically-zero-fee system in place?
That’s not really the problem we face, though. Our problem is you ask how much it costs to give birth at a hospital and then everything goes according to plan and later you get endless bills for much more than they said, often from providers who weren’t even in attendance, for materials that weren’t even used, and so forth.
> Which is to say don't propose something until you understand the unintended side effects. You can get your desired result but while making everything worse.
I think the American experiment in trying to provide market health care has demonstrated that you can, in fact, have a 'free' market for healthcare, while making almost everything about that healthcare worse.
A constant 30% discount on employer insurance via tax breaks does not explain the ludicrous growth in hospital bills over the last 4 decades.
Your vision benefits enjoy similar tax breaks, but I've yet to see an optometrist try to bill someone without benefits $800 for a vision exam, or $4,000 for a pair of glasses.
Insurance companies benefit from all those tricks: medical care billing is too complex to understand unless you have a full time team of people to understand it. Insurance companies have this team and you don't.
Vision doesn't work that way because enough people don't have basic vision care that they won't stand for the complexity.
NO, the problem is medical billing was allowed to become too complicated, and it is very hard to unwind that situation.
I'll contend (though of course there is no way to prove this) that if we hadn't had the advantage to company provided insurance the complex billing wouldn't have developed in the first place.
I’m reminded of airports which function very similarly to healthcare. There’s absolutely no choice of merchants I can be in an airport is decided by a very small group of people. It’s not like an open air market you’re finding some developing countries where people can just set up shop and start selling stuff. It is a tightly very tightly controlled market I have very very small number of entities and organizations.
frequently couldn't reasonably be expected to refuse service even if they did believe it was overpriced
I wonder if private urgent care businesses could offer free rides from emergency rooms to other facilities? There might well be laws against this. However, the existence of such services might give people a degree of choice they don't currently have.
A few years back, I was in the position of seeking emergency room/urgent care services for my girlfriend at the time in North San Jose. It was not a pleasant experience, to the point where we just decided to simply give up. On the other hand, I did the same for my girlfriend at the time in Houston, and found the whole experience to be relatively smooth.
Even if you could flip a switch and go to a free market, that doesn't reset where the current players are, so they will use that going in to insulate themselves and abuse the market.
For pricing, Hospitals/Insurance Co.'s are unwilling to absorb the cost of the statistical chances that something goes wrong or extra labor/things are needed during healthcare. That's why the patient-facing price could be anything and you get an itemized bill.
The only way to get slow-moving and predictable patient-facing prices is to get the hospitals/insurance to absorb these costs.
I have yet to hear a coherent explanation for how anyone can reasonably expect for price discovery to even pretend to function in a market where the consumers can't even guess the prices until after they've already purchased and frequently couldn't reasonably be expected to refuse service even if they did believe it was overpriced.