The free market in health care: one man's story
Joyce Park stashed this in Healthcare
This guy decided to actually do what free-market theory says will lead to lower healthcare costs: he gave up his health insurance and pays for all his health needs with cash. Takeaways:
* He has no dependents
* He negotiates with all healthcare providers for lower costs
* He buys medications from online Canadian pharmacies
* There is actually a blue-book for healthcare procedures
* Apparently the process of individual negotiation is time-consuming and frustrating
* His goal is to get Medicare
One point I want to make is that the "retail" price of any procedure is generally far more than any insurer will pay... so even with his negotiated lower rates, this man may still be paying a lot more for each service than an insured person.
This story shows that "market efficiency" can sometimes translate to extreme individual inefficiency, unless you're willing to assign a market value of zero to your time.
Wow, this is disheartening.
The retail costs of healthcare, without group bargaining power, will bankrupt us all.
Unless something changes.
Everyone wants Medicare.
Why not just have "Medicare available to anyone who wants it" and be done?
Because no one wants to pay for Medicare.
When I had cancer while I was in the 90 day period of starting a new job a lot of hospitals and doctors gave me cash discounts. I didn't negotiate pricing because I was more worried about HAVING CANCER. Even with discounts it was still thousands of dollars. The biggest hassle was that so many doctors outsource lab work. So even when I thought I had all my bills stacked up and organized I'd get a surprise $300 bill for some silly test. I wasn't even sure if all of them were legitimate, if the norm became people paying for their own health care via cash I could see spam companies popping up all over the place.
It does seem like too much of a profit motive creates an oversupply of things they can charge for.
It also seems like they take advantage of people who are under duress by negotiating with them while they're sick and/or anxious.
That just doesn't seem right, Amy.
Or we could just go fight wars in other places...
While we're at it we should cut taxes too...
Heart goes out to you, Amy! Glad to hear you are well.
What do fighting wars and cutting taxes have to do with making Medicare available to anyone who wants it?
We would do better by ELIMINATING group buying power by requiring that individuals always receive the lowest price (or create a legal fiction where not otherwise represented patients are part of an ersatz group with a lowest price guarantee), and by banning proprietary pricing. Free markets need comparability data to operate effectively.
How could a low price guarantee be enforced?
Does such a practice exist in another industry?
There is apparently a blue book for medical procedures. However it's a little bit unclear whether that kind of data is at all practical.
Here's an example: let's say my doctor recommends that I get a mammogram. I look in the medical blue book and discover that my doctor's medical practice is on the expensive side for these procedures. There's allegedly a cheaper one at an HMO across town. Can I just walk into the HMO and say I want to pay cash for the mammogram? Doubtful. Also, my doctor will be irritated at me because if I have the mammogram through my normal medical practice she would have gotten my results in digital form in real time -- and she will explain to me that because I was getting the mammogram due to suspected breast cancer rather than just as a precaution, she specifically wanted a radiologist to review it and that was one reason for the extra cost.
I'm a healthy educated person with plenty of time, who lives in a stable location with numerous healthcare options... and I STILL think that it's totally impractical for me to deal with all this complexity. Take anyone who is sick, uneducated, has poor transportation options, lives in an area with few healthcare providers, is time-stressed, etc. -- and it's even less likely that they could exercise line-item cost-containment through the magic of the marketplace.
Dealing with an auto mechanic to fix our cars, is complicated.
Dealing with the healthcare industry to fix ourselves, is worse.