Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktWhy do doctors make so much? Why is medical care so expensive?
It is the law of supply and demand: The AMA restricts the supply of doctors.
The best article that I came across is: old. More recent and an established history of the practice..
But, why? Why on earth would you restrict access to health care, a necessity for all people; young, old, middle-aged, fat, thin, tall, short……..WHY?
I don’t buy that medical practioners are that much smarter than the rest of us.
So, is it to make it more simple to regulate practitioners? Or just up the salary? Or is an ego thing?
Does it disturb you? Why?
Filed under: aca, health insurance, healthcare | Tagged: ama, clinton care |
All Things in Moderation 
Ya know, I thought that I would put this up really quick, as something a little different.Little did I know that when I perused last night's Happy Hour, it had already been discussed.Once again, I am late to the party.
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TaroyaYou've gone one better though and given us links to look at. I think it's a shame that because of years and years of protectionism that now with ACA and hopefully more people receiving care, we're facing a shortage of doctors. Dumb, dumb, dumb.I'll have to do some research but one of our big state universities out here is valiantly trying to get a new medical school off the ground. I thought the issues were financial but now I wonder if there's more going on than that.
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And some of us can't read the comments at Plum Line, and often don't go there at all because we can't read the comments, or otherwise participate. So feel free to bring it over here.
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One of the key aspects of ACA and frankly most or all government health programs is the use of the power of government to force prices down. A shortage of doctors has always been an inevitable result of this strategy, and doctors long ago began refusing to take patients under government programs.It seems to me that accepting a shortage of doctors is part and parcel of ACA, Medicare, Medicaid, all of it. If you are a proponent of government controlling access and payment, haven't you already cast your lot with the world of shortage and rationing?
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Its a crying shame. I am very disturbed by it.During the ACA debates, everyone kept saying tort reform tort reform tort reform even after it came out that it was only about 1% of the total cost of health care.Nothing was ever said about salaries. I agree that doctors should get paid a pretty penny. IT engineers are, and not just because no one else can do what they do, but you WILL compensate me for 2 am phone calls and 20-hour days trying to get it all up and running again. No one wants to be on call 24/7 for a pittance (and yet, check out the police and fire departments….)But to deliberately limit the number of doctors…WHY?
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"But to deliberately limit the number of doctors…WHY?" It's a cartel designed to limit competition and keep prices artificially high. Occupational licensing and certification is often promoted in the name of public safety (and that may be true), but it's also a tool to protect your turf. It's been abused. I have to to run, but I was reading about an bill in Florida would license interior decorators. They seriously said that without certification, choosing the wrong paint color would lead to deaths. I'll find the link later, but I probably read it at Reason.
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NoVA:It's not a bill, but current FL law that commercial interior designers must be licensed. Residential interior designers do not though, thanks to a court ruling last year.
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"One of the key aspects of ACA and frankly most or all government health programs is the use of the power of government to force prices down."While this may be a possible result, it is not (unlike Clinton Care) an intentional feature of the ACA, as far as I understand it. The AMA agitating to keep an artificial cap on doctors reflects a clear intent to distort the market in favor of those currently practicing physicians. Thus, folks who through their lot in with Clinton Care might have necessarily been embracing artificial doctor shortages, the folks supporting the ACA clearly do not want an arbitrary limit on doctors (even if, in practice, unmodified, it resulted in a decrease in doctors). "But to deliberately limit the number of doctors…WHY?"If you're the AMA, it's to protect your members from competition that might drive prices down, or divide patient loads. There's clearly room for more doctors in almost any city, if you've ever had to sit 3 hours in a waiting room for a 15 minute consult. You're there because maximizing patients seen, in order to maximize billing, is the strategy. More doctors would have people going to different doctors, lowering patient loads, and reducing billable cases. Which is partially a product of the distortions created by general health insurance, but I digress. If you're the Clinton Healthcare Plan, you limit the number of doctors because the government is full of smart people and access to good data, and they can determine exactly how many doctors will be needed in a given discipline in a given geographic area, and then they tell med students what discipline they are going to go into and where they are going to practice once they are done (as the government should, as it's paying all the bills) and then our brilliant dear leaders would bring about healthcare utopia. You would never need any more doctors than the government, through careful calculation and demographic consideration, assigned to your sector. In that scenario, it would be foolish not to limit the amount of doctors.
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"Occupational licensing and certification is often promoted in the name of public safety (and that may be true), but it's also a tool to protect your turf. It's been abused."Say it's not so! Occupational licensing and certification used to protect turf? I find that hard to believe! 😉 Shouldn't they license anybody who does anything anywhere? Anything could potentially be dangerous.
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I think it's worth bringing up here, Taroya. I just perused last night's HH and was reminded why I don't go to the PL very often anymore. Who is that JeffBailey character? I think we should just force some lawyers to become doctors. If someone will pay for my education I'll even volunteer. I took a splinter out of my wife's thumb last night with nary a yelp from her. Very steady hands. And as someone said recently, we lawyers, particularly medical malpractice guys (which I used to be) know more than the docs anyway.In all seriousness, I think you touched on all of the various motivations for the AMA. It seems odd that they complain about a lack of physicians while apparently doing little to nothing to help remedy the problem. I wonder if they see this as a bargaining chip that may get them some concessions from the government (loan concessions). One thing I thought of is a possible expedited MD or DO program for General Practitioners. Becoming a GP may be more appealing if there was less debt involved and if if you could start your practice sooner to allow for more years of making money. Obviously there are safety concern and maybe you could prohibit a GP from doing more high risk things like providing OB care.
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qb:If you are a proponent of government controlling access and payment, haven't you already cast your lot with the world of shortage and rationing?That is definitely true, but there is also another effect at play here, which is probably what Taroya is talking about, and it is not at all particular to the medical profession. The very fact of government requiring special certification in order to participate in an activity will necessarily restrict the supply of people engaging in that activity. Which of course drives up the cost of getting that activity done. It doesn't matter whether the activity is providing medical services, selling real estate, or trading stocks. When the government requires special certification, the pool of people available to do it necessarily shrinks.There is always, of course, a "good" reason for requiring certification, and it is always ostensibly for the reason of protecting the customer. But it is also, of course, a ready-made way for those already in the profession to protect themselves from competition, driving up costs and limiting supply**. It is, as always, another example of the inevitable trade-offs involved when using the government to mandate things. **The exception to this inevitable reality seems to be lawyers, which, despite requiring special certification, never, ever, ever seem to be in short supply. 😉
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Taroya:But to deliberately limit the number of doctors…WHY?Because doctors are no different than any other humans in that they act on self-interest.
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If you are a proponent of government controlling access and payment, haven't you already cast your lot with the world of shortage and rationing?—————–Haven't you already cast your lot with the world of shortage and rationing when the bean counter in cube 6 gets to decide whether or not that procedure is covered by the premium you have been paying for 20 years?Only, for the bean counter, he gets a bonus for denying you.
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I don't believe any figure like 1% of costs attributable to a tort system out of control. A major driver is the separation of consumption from (perceived) payment responsibility, but much testing and intervention is defensive medicine driven by liability exposure.Kevin,ACA is labarythine and almost impenetrable in some ways, but, for example, it will cap premiums at some effective date, and it mandates minimum benefits, as well as strictly regulating insurance company budgets. This combination is effectively the same as dictating prices for health care. It cannot and will not work, and it will inevitably excacerbate any physician shortage. We were told during the debates that physicians wouldn't mind at all making less money; that absurd argument wasn't being made for no reason.Scott, I wasn't denying the cartel/licensing effect. It is, of course, a perennial topic in the legal racket as well. Restricted access is the principal reason given for aspirational ethical rules requiring lawyers to do pro bono work. My point was more that, whatever can be said about shortages caused by licensing and AMA machinations, government regulation is almost sure to be a more important driver.Taroya, In answer to your question, no, I don't consider private health insurance to involve rationing at all, no more than I think the grocery store rations my food. Health insurance is more complex and provides more opportunities for the insurer not to honor our contract, but it isn't rationing. If I don't like my insurance company, I in fact can go elsewhere (and de-linking it from employment would make that easier — too bad Obama trashed that idea during the 2008 campaign and instead gave us what he gave us).
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(sorry for my horrible typos and spelling, all. I am all scrambly with work right now.)
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I understand cornering the market, esp. in areas like, say, lawyers or stock brokers, but I put this in a different bucket.Everyone needs medical, every single one, and doesn't the Hippocratic Oath say something about Do No Harm?By limiting practioners for the sake of market share, I would say that is a great deal of harm, and deliberately inflicted at that.That is what disturbs me, much more than 'rationing' the type and amount of care being given.If the practioner pool were not so limited, perhaps at that point costs would indeed go down.All back to supply, and demand.And, aren't we supposed to have a 'free market'? Isn't that one of the gripes regarding ACA? What is 'free market' in limiting the number of doctors?And, doesn't it smack of communism, "and they can determine exactly how many doctors will be needed in a given discipline in a given geographic area, and then they tell med students what discipline they are going to go into and where they are going to practice once they are done"?
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Is okay, qb, I forgive you 🙂
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Taroya: "And, doesn't it smack of communism, "and they can determine exactly how many doctors will be needed in a given discipline in a given geographic area, and then they tell med students what discipline they are going to go into and where they are going to practice once they are done"?"That was in reference to the Clinton Healthcare Plan (one of the many reasons it failed). The AMA doesn't have that (I'm sure they'd like it, but they don't have it). Nor does the ACA.BTW, qb, I understand that the point is to control medical costs by capping charges and ensuring minimum levels of coverage, but that won't contain costs, any more than wage and price controls controlled inflation (or actually capped prices) in the 1970s. Other mechanisms will crop up to assure medical professional maximize their market value.
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Taroya:but I put this in a different bucket.You shouldn't. In economic terms, medical care is a commodity/service just like any other.And, aren't we supposed to have a 'free market'? Isn't that one of the gripes regarding ACA? What is 'free market' in limiting the number of doctors?It isn't the free market that is limiting the supply of doctors. It is government regulation, ie the requirement of certification, that does so.Again, there is a necessary trade-off involved. If you want the government involved in regulating who can and cannot perform medical services, they you must accept the limitation in the supply of that service that will necessarily follow.
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According to about everything I have come across, it is the AMA that is doing the limiting; not the government.The AMA is not a gov't department or agency. It is an Association. Kind of like a union for doctors."The AMA's stated mission is to promote the art and science of medicine for the betterment of the public health, to advance the interests of physicians and their patients, to promote public health, to lobby for legislation favorable to physicians and patients, and to raise money for medical education."
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scottIsn't the discussion here about the AMA limiting the number of doctors. Are you saying that is because of government regulations? It appears to me that they may attempt to use government as an excuse but I'm not sure that's valid. And why wouldn't we want a strenuous certification process?And another point, many of us don't actually view health care as just another commodity/service. I know we've had this discussion before but health care is more than just a commodity you can independently decide to buy or not. Most people will eventually end up in the emergency room whether they intend to or not and regardless of whether they have the funds to purchase it or not.
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ACA merely attempts to limit med ins profit and OH, not cap med costs, and that was bought into by the insurance industry as a trade for the individual mandate. Am I correct in this reading of history, NoVaH?The only attempts at med cost control were in fact pilot programs to train more health care professionals and staff more clinics, and I do not know if any of that will be funded, going forward.Loan forgiveness programs for MDs and DOs who do clinic care and public health service for a period of time would help correct the imbalance of "specialists" vs. front line care givers. But training more nurse practitioners and overcoming AMA obstacles to them also provides more first responders.
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Ok, I've had two posts not show up, but I'll give it one last try. I'm not sure what if any power the government has given the AMA, but to my knowledge it is the AMA that limits the number of medical schools and the medical schools which reject 50% of applicants. I think Scott is grossly simplifying this issue.Maybe I'm misunderstanding QBs point, but it appears to be that the ACA will result in physicians making less, so physicians will leave the market or people won't become physicians to begin with. That is likely true, but under what scenario do we reduce the amount of money spent on health care but have physicians make the same or more and thereby avoid the problems QB sees caused by the ACA.
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To Lighten the Mood a Bit.
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Mark,ACA is so complex that unless one deals with it daily it tends to fade into generalities, but it does cap insurance premiums, effective a couple of years from now, I think. Combined with mandated benefits, I don't see how this can not equate to price controls.Ashot, my answer would be, probably no scenario other than reducing consumption (and letting the supply pool shrink).
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In other words, keel over and die, quick. (reduce consumption).
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It doesn't cap them — it subjects them to a review for "unreasonableness" — i think it's more of a public shaming than anything else. but states can cap premium increases. Final rule (pdf) here
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The specter of a cap or pseudo-cap has already and/or will lead to short term hikes now, right? Taryoa- There is plenty of waste/ineffeciency that can be trimmed without us getting to the keel over and die, quick scenario. The one that immediately comes to mind is mammograms. Many mammograms are unnecessary and cutting out that consumption has been advocated and quickly shot down. Sadly, the type of argument that needs to be made (we'll save millions but a few women will die who otherewise would not) simply will never be made for obvious reason. It's in this sort of scenario where I see employor covered insurance has a problem. If people paid out of pocket for this spending they could decide if the risk was worth saving the money (put another way how much are they willing to pay for peace of mind). Of course the wealthy would have an easier decision but if we want to save everyone, we have to be willing to pay for it. So far we are trying to have it both ways.
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That argument was made, albeit by a much of public health scientists that were quickly told to STFU. And then it was made into a bunch of ads that proved that anyone who reiterated the idea hates women. This is why we can't rely on the so-called expert panels that are intended to be above the fray — because they're not. And it's sad, b/c of politics women are going to be subject to the procedure unnecessarily — one of the reasons for the recommendation was because of the pain involved and the rate of false positives.
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The pain involved? Really. As a woman, I don't find that a compelling argument. But also as a woman with no history, family or otherwise of breast cancer, I've told my doctor I will only go every other year for that particular test unless something turns up obviously.I honestly believe consumers would be better utilizers of health care dollars if they were better informed and not so programmed to avail themselves of every little test or procedure that comes along.One of the things that's been occurring as the cost of insurance rises is more people are cost sharing and making decisions based upon finances. This may be good in the long run but it doesn't seem to be bringing down health care costs as predicted.
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"That argument was made"Yeah, I should have said, "successfully made" or something similar. It's sad that practicing evidence based medicine means you hate women, men, children etc. lmsinca- I would think the false positives would be the bigger concern anyway. Which adds even more to the already unnecessary cost of the testing itself. As for costs not going down, it's sort of like how companies manage to out maneuver tax reform efforts. It's their job to make money, they know how to do that better than those who are trying to control costs.
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Here's the recommendations — pain made the list. I remember that being mentioned during the press conference, but it doesn't look like it's a big concern. Annals of Internet Medicine PDF
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Has anyone else here ever had one of those epidural shots to the back? Biggest waste of money in health care I've ever spent. I resisted and resisted but my GP begged me to try it because I don't take pain medication very well and she could see my back was causing me a lot of grief at the time.It's considered out patient surgery as they briefly knock you out and microscopically insert the needle. It was supposed to be a series of three shots. The first one cost me $300 as a co-pay and the pain relief of about two days didn't match up with the reaction I had which lasted three days. I'm laughing now, but I never went back for more, why would I?
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lms:Isn't the discussion here about the AMA limiting the number of doctors.Yes, but the AMA is involved with the accreditation(?) process for schools, and in order to practice medicine in most (all?) states, one must, by law, graduate from an accredited school. Therefore, the AMA, by law, is in a position to control the supply of physicians.And why wouldn't we want a strenuous certification process?Because the more strenuous it is, the fewer the doctors and the higher the cost of using them. I'm not saying we shouldn't have a certification process. I am simply pointing out that there are unavoidable trade-offs involved. As always, there is no free lunch. (When I was a freshman in highschool I had a teacher who had that saying, "There is no free lunch", posted above the chalk board in big letters. It has stuck with me more than anything else I was taught that year.)And another point, many of us don't actually view health care as just another commodity/service.I know, but that doesn't change the fact that, economically speaking, it is like any other. The fact that we may want people to have access to it regardless of their ability to pay doesn't suspend economic reality.I know we've had this discussion before but health care is more than just a commodity you can independently decide to buy or not.No, it isn't. You and I may not like the consequences of an inabilty to buy it, and we may feel some moral obligation to take steps to lessen that inability, but that doesn't change the economic reality…health care is a product/service subject to the same economic forces that any other commodity/service is subject to.
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Re: mammograms. Like lms I have no family history; unlike lms I had two false positives (not much to mammo = higher likelihood of false positive. Good build for running, not so much for mammograms! 🙂 ). After the second false positive and an absolutely horrible experience at the radiology clinic to straighten it out, and then the announcement about them not doing much good as a diagnostic tool for women under 50, I told my doc I'll go get one then.Re: doctor shortages. Not to stick up for the AMA, but another component of this is the expense of medical school, both to the student and to the school. Here in UT we've had to reduce the size of the med school class by 10% in order to keep the tuition halfway reasonable. I'm pulling the number out of a place that doesn't get much sunshine, but I seem to remember that it costs a university in the neighborhood of $100,000/year/medical student to provide the schooling. Cadavers for the anatomy class alone (which I helped teach here for years) are around $6,000 each–a fee which is NOT included in tuition. A medical school is a very, very expensive proposition to undertake.
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Scott: I always heard it as "Tanstaafl". Rolls off the tongue a little easier than "Tinfl", but means the same thing.
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tanstaafl….There….ah, what?Re mammo's, I have had one, wasn't that bad, but I am 46, so as long as I don't need to, I won't.Even with all of the controversy, I would far rather do a full body MRI every 2-5 years. I think that the results are great deal more accurate and worth the money.With the strides made in genetics and molecular bio, I wouldn't have an issue with going in for blood tests every few years either.Preventive is more that just healthy diet and exercise.
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AH! There ain't no such thing as a free lunch!
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Tanstaafl: tan-stah-fullThere ain't no such thing as a free lunch.Don't know if it originated with Robert Heinlein, but his books were where I saw it first and then heard it several times (usually, like Scott, from a teacher or professor) after that.The mammos in and of themselves weren't all that bad, but the false positive results! First time just took a re-read of the images to determine that it wasn't anything. The second time they brought me in for a second mammo, then wait while that was read, then a sonogram, then wait while that was read, then consult with a third radiologist. . . all the time while I'm sitting in a freezing exam room with nothing to read, they wouldn't let me call anybody to come be with me, four hours of waiting to find out that "oops! You've just got dense breast tissue. Sorry!". Nope, not gonna do that again until it's more medically indicated.
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Great minds, taroya!!
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ScottYour opinion of health care as a commodity, like any other, is not a fact. It is an opinion not shared by everyone going back all the way to Kenneth Arrow in the 1960's. There are a lot of reasons why it's not like buying a loaf of bread, one of which is the insurance industry and another is the lack of transparency in comparison shopping, which is virtually non-existent. Those are just off the top of my head. It is NOT subject to the same free market principles in theory or fact, IMO, as other commodities or services.And I've seldom had or asked for a free lunch. It's not just a slogan for free market principles.
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Mich…come to think of it, I think the sign did say There Ain't No Free Lunch.
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Nor is health care sold on the stock market,or bid for, unlike commodities such as corn.
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Re: what is driving costs. There are 4 things that are largely agreed on: 1) technology and drugs, 2) an aging population, 3) chronic disease, and 4) administration*. http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx#What%20is%20driving%20health%20care%20costs?*it's often said that Medicare admin costs are way lower than private sector. and that's true. if you don't count the unfathomable amount of fraud in Medicare.
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NoVA, one of my pet peeves other than fraud in Midicare, which I would think would be problem waiting for a bi-partisan solution, is Pharmaceuticals. The advertisements on television remind me an awful lot of all the ads during the housing boom for easy mortgages.
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maybe i'll do a post later on fraud if it's of interest. i spent a lot of time on that when it was at medicare. re: the drugs, i hold the docs responsible for that. i'm sure ads help drive the desire, but ultimately it's the docs writing the script.
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Gotta love those ads, though.This product will cure your —-, but be aware of the side effects, such as dizziness, nausea, vomiting, difficulty breathing, heart stoppage…
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NoVA, I'd love a post on Medicare fraud, from a past insider no less. When you have time of course.Taroya, those crack us up around here. The number of words used, in a very soft voice, outlining the side effects are usually much longer than the supposed benefits.
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"usually much longer" — most times that is the supposed benefit. I'll add fraud to my list of stuff for lms.
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"most times that is the supposed benefit"I'm so old fashioned it took me a couple of minutes to get that. Yikes
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lms:Your opinion of health care as a commodity, like any other, is not a fact.I think it is. Perhaps you can explain how the normal economic forces which act upon other commodities/services don't act upon the provision of health care. I don't understand how the existence of the insurance industry, or the absence of transparency, somehow makes the provision of health care unlike the provision of any other service in economic terms. And I've seldom had or asked for a free lunch. It's not just a slogan for free market principles.I donn't think it is a slogan for free markets at all. I think it is a slogan describing the nature of reality.
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ScottThe insurance industry and the insurance commissioners in each state dictate the rules of the health care industry. I can't just wake up one morning and decide I want to purchase an MRI and get on the phone and start comparison shopping. Perhaps if you have an unlimited supply of money you'd be able to do that and afford it, but for most of us we rely on our insurance company through a referral service and our doctor to send us to a specific location for an MRI. When you're in the hospital you can't just say, I'd like to have someone bring me my meals and tylenol and have them taken off your bill. As consumers, we are very limited in our choices. A large part of that is because of the insurance industry. If you want to eliminate the insurance industry and self insure against open heart surgery, that's a different story and good luck.
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"Has anyone else here ever had one of those epidural shots to the back?"During her first "labor"–it was a waste of time anyway, but the show we had to go through before insurance would cover the C-section–and it apparently almost killed her (she has a heart arrhythmia-thing that did not respond well). 2nd child, it was just straight to surgery with general anesthetic.
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lms:I can't just wake up one morning and decide I want to purchase an MRI and get on the phone and start comparison shopping. Perhaps if you have an unlimited supply of money you'd be able to do that and afford it, but for most of us we rely on our insurance company through a referral service and our doctor to send us to a specific location for an MRI….As consumers, we are very limited in our choices. A large part of that is because of the insurance industry.We are deviating somewhat from the topic at hand, but that's ok with me. Your first sentence above suggests that, without insurance, you wouldn't have access to certain kinds of health care, an MRI in your example. Yet you then go on to conclude that it is insurance that limits your choices. Something seems amiss here.The fact is that you are limited in your choices not because of insurance, but because certain kinds of health care are simply too economically expensive for most people to afford. Insurance, however, provides a way for such people of limited means to gain access to these kinds of health care. Far from limiting you, insurance actually opens up more choices to you.But to get back to the original topic, insurance is a method by which certain health care services can be purchased by people who otherwise could not afford them. I still don't understand how this makes such services economically different from other services/commodities. The fact that demand for health care services is increased because of access to insurance doesn't mean that health care services react differently than other services/commodities to market forces. It just means that the market for health care services is bigger than it otherwise would be.
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"As consumers, we are very limited in our choices."Which is what happens when you introduce 3rd party payers, and abstract customers from the purchase of the product. Which arguably is a secondary consequence of attempts at wage controls, making benefits the way companies competed for employees . . . but it is very true that, as a consumer, your choices are extremely limited unless you have a great deal of money. At this point, there is not a good solution. Vouchers aren't the answer, ACA isn't the answer, and single payer isn't really the answer. Arguably, the market is permanently distorted. BTW, regarding free lunches: I've never turned down a free lunch. When I've been unemployed, I collected my unemployment. I think it's probably a bad idea to have 99 weeks of unemployment, but if I had been unemployed during that period, I would have collected it. If I was unemployed and unmarried and childless, I'd move in with my parents or a friend and collect all 99 weeks. I ain't no dummy!
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"We are deviating somewhat from the topic at hand"We're going to do that a lot. ;)"Far from limiting you, insurance actually opens up more choices to you." This is a fair point, although it's basically one that suggests that shared risk pools make it possible for more expensive types of care to be available, because the hundred people who don't need it help bankroll the 1 who does. Which could also be used as an argument for single-payer healthcare, given that would create the largest single shared risk pool possible.Of course, countries with single payer healthcare tend to have less of the new expensive MRIs and CAT scanners and what not. Which also limits consumer choice.Basically, until we have inexpensive nanobots to magically fix all health issues, we're screwed.
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But, speaking of the free market, health insurance has gotten so expensive that it's very difficult for an individual or family to afford to buy for themselves, so you're dependent on whoever your company purchases insurance from. I didn't comparison shop for Cigna (they are all right), nor could I afford to purchase insurance from anybody else. The insurance, bought as an individual, would be more than my rent and my electric bill put together. While I could comparison shop practices, I only shop on relatively quality of service and location, as the price isn't likely to be different for me. I cannot comparison shop insurance–it's simply not practical, and the coverage wouldn't be worth the price difference, even if I could afford to go it alone. Healthcare falls short of an ideal free market, where I'd be paying for all my healthcare out of pocket, but a simple blood test would cost $20 and an aspirin and a bandaid wouldn't cost a quarter. A few X-rays might run $40 or $50 bucks. But I wouldn't be charged $400 for a shoe boot I know can't cost more than $40, and probably comes in closer to $20.
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"I cannot comparison shop insurance–it's simply not practical, and the coverage wouldn't be worth the price difference, even if I could afford to go it alone."This is the whole idea behind the exchanges — comparison shopping. Someone at HHS is going to see this and burst into tears.
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Health care consists of goods and services, just like everything else. Our system of systems makes it complicated and unweildy, but it is nevertheless subject to the same economic forces and rules as everything else. Much of what makes it unweildy and seemingly immune to choice and negotiation is a function of government regulation. Insurance competition is restricted by law, and insurance terms are increasingly dictated by law. Obamacare just multiplies all of this.
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"Someone at HHS is going to see this and burst into tears."That was funny, but I'm not counting my 2014 chickens unless they hatch in 2011. For most of us not much has changed yet, except rising costs of everything having to do with health care.
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scott & qbWhat kind of similar economic force in any other commodity would tell you that a small group policy for two people age 60 to 65 in a standard HMO 40 will cost exactly the same no matter which insurance company you purchase it from? You can blame the government or you can blame the Health care industry but that's not some kind of free market principle. And if my choice is to go without insurance or try to buy it on my own, there are even fewer choices. It's an economic fantasy to say it's the same as any other good or service. The market is completely distorted and has been for a long time.
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lms,I agree that the market is distorted, but that's a different claim than that health care isn't subject to market forces and laws. It means those market forces and rules are being distorted.My main point was simply that health care does in fact consist of goods and services, nothing more or less.There is a movement that seems to say, no, health care is something else that can't be subject to economics. Rukidding used to get insensed at me for saying this and denying that health care is, instead, a "right." I simply don't know what that can mean. What is the context of your example of prices are idential across insurance companies? I have never seen this, but if it is happening in the market, it certainly can't be a result of market forces. Government, yes, but not market forces. What do you think is distorting the market?
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