3904

Ok, I think I misunderstood. But you do have the freedom to walk away from a doctor at the deal stage (except in rare cases when you need treatment within 4-6 hours).

Do you have the freedom to walk away from health care entirely? Well, you can survive much longer without seeing a doctor than you could without eating food. Yet we don’t usually look at grocery stores and restaurants as an example of market failures.

3905

There is an enormous distinction between medical care and the market for food b/c although going without food in general CAN kill you, going without a very specific kind of food may make you unhappy but won’t kill you. But in health care, you don’t just need “health care”; you need the exactly right type of health care at the right time.

So health care features a much greater scarcity of appropriate choice than the food market does, which makes them vastly different in economic terms.

In addition to that, making the right health care choice also involves specialized knowledge beyond the experience of most consumers, in contrast to food choice.

A good example of this is the one area where these two markets overlap: food allergies and replacement foods for those with allergies. It is routinely the case that specialized replacement foods (not generally available stuff like non-dairy or gluten-free but more esoteric replacement foods) cost more than non-specialized foods, and on top of that there is substantial regulation of this sort of food, due to the manifold health concerns. And even in the general food market, we do in fact have substantial regulation to promote things like food safety, disease prevention and so forth.

Lastly, to be technical, I’m not describing the health care market as being in a status of full blown “market failure” (except for extremely serious life threatening emergencies) but rather in a state of “market imperfection”. In my view we don’t need a full-blown UK style NHS health care takeover (as we would in a status of full on market failure) but rather we need major health care reform either on the Canadian single-payer or French/German multi-payer with automatic enrollment models, to respond to market imperfection.

That’s part of my overall view of the market as a tool that needs to be used appropriately, with reasonable regulation. I’m not a socialist, but I also consider the full blown “free market deregulation 4eva” types to be idiots.

3906

I think that for most medical decisions, there are always at least a half-dozen providers capable of providing care. But it’s true that some health care settings (i.e. rural) and some conditions (i.e. rare diseases) don’t provide enough choice.

Yes, IMHO this is the biggest problem with market based approaches. This is how you end up with Steve Jobs dying of treatable cancer, and countless other anonymous tragedies.

3907

Who wants to contract their heart surgery to the lowest bidder? And how would you judge which bidders are high quality and have a history of getting good results on that procedure? I can’t imagine many people would prefer this system to trusting their doctor’s recommendations.

Market solutions don’t work for healthcare.

3908

Is this a good argument? Really?

3909

Well, it’s better than “All essential services lead to market failure”. But to his credit Sharpe wasn’t making that argument.

3910

Well good thing I wasn’t either. Instead I laid out several conditions which can contribute to market failure, and how they apply to medical services.

And unlike @Sharpe I do consider our medical system as being in the process of failure.

3911

You don’t always use the lowest bidder for a kitchen remodel . Not do most of us have the skill to evaluate plumbers, electrician etc. But we increasing rely on crowdsourcing, Yelp Angie’s list etc. If one surgeon had twice the failure rate for making me impotent but was 10% cheaper. I wouldn’t choose him but if one was twice as expensive but only 10% better I might.

3912

Just to be clear, the long run trend IMO unless we stabilize and strengthen the ACA (and/or enact more comprehensive health care reform), is that I do actually think our overall medical system in the US is “in the process of failure”. I just don’t think it’s gotten to a “full blown” failure yet. If you look at the trends of medical inflation at 2X or 3X overall inflation, increasing shifting of costs from employers and carriers to consumers, increasing medical bankruptcy before the ACA, and numerous other trends, the system is in fact in a slow collapse, partially delayed by the ACA, although not IMO permanently.

3913

The problem with outcome metrics, like this one, is that they don’t take into account patient complexity.

So for instance if Dr. X is better than Dr. Y, then she will be referred more complex patients and/or be more willing to take on complex patients. That could lead to lower complication rates for Dr. Y, even though any individual patient would do better with Dr. X.

3914

I think analogies comparing home contractors to healthcare providers are of little use.

  • I can evaluate a plumber a lot easier than a surgeon, and I suspect that is true of everyone in the world who isn’t also a surgeon.

  • If I pick the wrong guy to replace the upstairs carpeting, I’m only risking a bit of money.

  • If my drywall guy doesn’t know the carpenter and they aren’t accessing the same records, that could cause a delay in the project, but it won’t kill me.

We don’t need some moment of brilliance to solve healthcare. Every developed country in the world has approached this issue. There are a sufficient number of live, working models to examine and adapt. As far as I am aware none of them use Yelp for Doctors as the primary tool.

3915

A recent example for me is when my wife had a stroke earlier this year. I had a choice presented to me about whether or not the doctors should administer a drug (it carries 6% mortality rate but helps about 30% of those who take it). It has to be administered within 2-3 hours of a stroke happening and we were on the back end of that timeframe. In the meantime, my wife had almost completely lost the ability to speak. Not taking the drug might have made it more likely that that was going to be her new permanent state.

Just contemplating the risks of the drug made it a tough enough decision as it was. If they had told me the drug was going to cost $100,000? $500,000? $5 million? And I had to make a financial decision at the time? I would have said yes even if it cost $5 million, even if it meant I’d be penniless and debt-ridden the rest of my life. I would have had neither the time or the frame of mind to think about financial decisions. They could charge anything and everything they wanted and I would have eagerly paid.

And that’s where the free market will never work with healthcare. Demand drives prices and there’s no demand greater than the life of yourself or your loved ones.

3916

Well, as your own example shows people have to make difficult medical decisions regardless of whether they are in a single-payer system or a theoretical free market. And even when money is not a factor, people do not always choose to extend their own life by any possible means. There are other valid demands and considerations.

Injecting money into the decision process makes the decision more complicated, but it does not suddenly invalidate the decision.

3917

Sure, I’m just saying we can’t rely on normal pricing constraints of a competitive free market to work here. A profit-seeking company can inflate the cost of a drug (see $700 insulin) to whatever they want and people will pay. The market cannot and will not govern itself.

3918

Ah yes, the broken patent system. Another serious problem with health care.

But in your case, the drug in question (TPA) is off-patent and made by multiple companies. So even if you were willing to pay $5 million, they wouldn’t actually charge you $5 million.

3919

So, basically what I’m continuing on from is Sharpe’s comment about a patient’s frame of mind and whether they can make rational market decisions. In my situation, I absolutely was not. A better person/place to hash out the pricing details would be a government regulatory body or insurance provider.

I mean, we understand this sort of thing with utilities. The gas company can’t hike prices 800% when a brutal cold snap hits.

3920

Even if you were calm and capable of making rational decisions, are you going to be knowledgeable enough shop around? i.e., “based on physical exam findings X and lab results Y, I may have either A or B. I’m looking for an ultrasound of my bladder to determine whether Z (or any or other abnormality) is present. Can you do that for 10 quid?” doesn’t seem like a reasonable ask for any regular joe.

3921

Nope, I most assuredly am not! If a doctor tells me I need an ultrasound or I have X which means I should take Y prescription, I really have no idea if I really do need that or if he’s getting a sweet kickback from the pharmaceutical company. Yes, people can go get a second opinion, but when doctor visits are running 500 bucks a pop…

3922

If the medical profession always agreed on the best next step and how to compare quality, then it would be possible. In other words, if every doctor would recommended an ultrasound of my bladder, then all I need to find is the cheapest ultrasound provider with acceptable (i.e. top N %ile) quality.

But quality comparisons are hard for reasons mentioned above. And medical professionals do not always agree (even if they are not corrupt!). So if one doctor recommends an ultrasound but another would recommend waiting six months, you cannot expect a rational uninformed patient to properly engage a complex marketplace.

3923

The question is why is all that necessary? What’s the problem you thinking is being solved by the free market?

I mean, I love the free market, but it’s not the goal or the end point is it? It’s a tool for creating an efficient system, to reduce prices and help distribute resources by tapping into people’s self interest.

But, it doesn’t seem to be a solution to our health care problem. So, why continue with it?