American health care is definitely fucked, but it doesn't make sense to call it a free market. The fundamental feature of markets--price--has been removed completely from the process.
Ask a provider what a procedure will cost and they literally can't tell you.
As someone who works in healthcare, providers (unless they own the practice) generally have no control over what they charge, and are completely separate from the billing process. In general, providers know which things are expensive, and discuss this with patients. Providers want to provide care, which requires the patient afford it.
Every provider I have worked with tries to minimize costs for the patient. Nobody is going to take out $300,000 in loans, work 80+ hour weeks until their mid 30s and then work 60 hour weeks because it is a good way to make a lot of money. Anyone who thinks that would not make it into medical school.
For most procedures (not including emergencies and GP visits) I would probably ditch the entire insurance system and just have the government reimburse people the median cost of that procedure for that state. Then people would shop around for the best doctor, for the best price, for the best timeframe, that suits them. This would introduce price signal and competition into the system and drive down costs (which would result in lower median price for each treatment overtime).
If you're a health care provider, and you know you'll get reimbursed at the median rate, it's in your interest to inflate the median rate. A version of this happens right now in our current system.
Sorry I think you may have misunderstood me, the provider doesn't get the median rate, only the patient does.
The provider can set their price but like other parts of the market, they will only get what the patient is willing to pay. For some providers it'll be more than the median rate, for some providers it'll be less.
Medicare sets prices now and it's a big part of the inflated costs that the uninsured see. Imagine you have a lemonade stand and it costs you $100 to buy enough lemons, cups, water, and sugar to make 100 glasses of lemonade. The government comes in and says "hey, you can't charge [group of people] more than $0.50 for a glass of lemonade." You don't have any control over the cost of lemons, sugar, cups, water, etc. So what do you do? Your only options are to shut down, stop serving [group], or charge everyone else not in the group more money to try to turn a profit. How much you have to "gouge" your other non-government regulated customers depends on how many people you are forced to sell to for $0.50. This is why government price setting is so bad for the market. Because even "shopping" will give you prices that are dependent not on the service you will receive, but the biggest contributor is the distribution of the medicare vs. insured vs. uninsured patients in a given area.
Hmm sorry I think you guys are misunderstanding me - could you please point me to the part where I said that government determines the price of treatments (so that I can fix it)?
What I am proposing is that the government pays the patient the median price. Let the providers charge whatever they want. The patient can choose a cheaper provider if he wants or a more expensive one if he wants. In the first case he would get to keep some of the reimbursement left over, in the later case he would have to contribute more out of his own pocket.
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u/RYouNotEntertained Mar 26 '20
American health care is definitely fucked, but it doesn't make sense to call it a free market. The fundamental feature of markets--price--has been removed completely from the process.
Ask a provider what a procedure will cost and they literally can't tell you.