[alexanderstears]

the US has an entire political party angrily decrying any effort to regulate healthcare as socialist slavery.

Argubly regulation is the problem we're in this mess. Do you think an epipen would cost $600 if there weren't a Government granted monopoly?

We have two parties who love the current amount of regulations on competition - you need to go to an AMA approved medical school to become a doctor, there aren't H1Bs for health care workers, and the government gets to pick and chose who's allowed to sell medication.

They just disagree on the amount of subsidies for poor people. One party thinks prepaid consumption with cross subsidies is insurance and the other party thinks that insurance shouldn't be so binding if you get sick.

[dv_dt]

Regulations can put pressure on prices (and if you look at epipens in particular, part of the regulations allowing the increase of their price have nothing to do with monopoly and a lot to do with getting policy placed into areas where organizations are required to keep an epipen on hand by regulation...).

But in terms of overall effect, one can't ignore other nations which pay much lower prices for healthcare with both regulation for drug patents, as well as regulation on drug prices. That combination manages to deliver better care at lower costs than the US (we pay on average double per capita). So I don't think one can generically fault "regulation" for a poorly performing health market in the US.

[alexanderstears]

So I don't think one can generically fault "regulation" for a poorly performing health market in the US.

You're absolutely right, however, I do think the worst parts of our medical system exist as consequences of regulation.

The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill.

The licencing system isn't optimal for cost effective care.

There's a lot to be desired for people who favor supply side solutions to expensive problems.

[dv_dt]

> The mandate that emergency rooms treat anyone who enters is onerous and there's no free lunch, paying customers are stuck with the bill.

I don't think that's onerous, I think that is a minimal, and admittedly imperfect, expression of our societal intent that people shouldn't die unnecessarily in emergency rooms - either from lack of being able to pay; nor from a practical standpoint, lack or delay of on-hand proof of ability to pay.

Removing those regulations would cause all sorts of other problems. Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted. Even more profitable, if I judge that person as having a well connected social network, I can charge even more because I know their friends and colleagues would chip in to save them... I'm not sure how a competitive market with no regulation changes the worst case for this transaction - if someone is near death then moving on to another emergency room is out of the question.

I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy).

Insurace with a shared risk pool is a technically workable, but adds even more overhead, and ends up a more expensive way to do the same thing... but again regulations are involved (and fixing very flawed ones at that).

[AnthonyMouse]

> Someone arrives in an ambulance near-death, if I lack morals then one level of maximized extraction price is to have those patients commit to pay a value that represents the earning potential for that person for the rest of their life. They have to agree before getting admitted.

Actual markets don't work that way. If you could actually make that much money then someone would open a competing emergency room right across the street, let everyone know that they charge $1 less and take all the business. Then the first emergency room would charge $2 less to take it back, until they're both charging reasonable prices.

It's the same reason you don't have to sign your life away to buy food even though you would die without it.

The problem in the US is that the regulations on the market for medical services work almost the exact opposite of that. There is no price transparency at all so you have no idea which facilities are more expensive. And if someone wants to open a competing facility, they have to get a Certificate of Need proving that the existing facilities don't have enough capacity. Even though having enough capacity doesn't preclude charging outrageous prices in the absence of competition.

> I see universal healthcare with a shared cost-pool as the lowest overhead way to provide for our social moral desires (but then I'm not in fear of the regulation with may be needed to implement that policy).

The existing US system is pure corruption. It's heavily regulated but the regulations are a result of regulatory capture by insurance companies (who want higher costs because higher costs means more vig), and all the industries the insurance money pays for like pharma.

The result is that medicine in the US is outrageously expensive. But the expense doesn't go away even with universal coverage unless you fix the regulations, and if you did that then people would be able to afford medicine out of pocket without insurance.

[dv_dt]

> Actual markets don't work that way.

Isn't that exactly what's happening in slower motion with the incredible price hikes in many drugs such as insulin? And you assume that the neighborhood can sustain two emergency rooms - a second competitor isn't going to arise if the setup costs are high and the competitor can't undercut and survive the competition phase. This is exactly why there aren't multiple competitors to residential ISPs, because after the risk and costs are factored in setting up overcapacity for a market isn't a good investment.

Further if you look at the drug markets, sufficient cost and time barriers exist and allow even makers of generic drugs (with no patent monopolies) to charge inhuman rates for drugs. And generally investors are not going to back efforts to fund a head-to-head competitive slugfest when the market of users for a given drug is basically of fixed size. Again building overcapacity is generally avoided in these markets because of the high entry barriers.

https://www.nytimes.com/2017/04/14/business/lannett-drug-pri...

[AnthonyMouse]

> Isn't that exactly what's happening in slower motion with the incredible price hikes in many drugs such as insulin?

Again, the market for medicine suffers from regulatory capture. The regulations make it prohibitively expensive (literally millions of dollars) for new competitors to enter the market, which allows the incumbents to conspire to fix prices.

If we had the same standards for manufacturing medicine as we have for manufacturing food, that wouldn't be happening.

> And you assume that the neighborhood can sustain two emergency rooms - a second competitor isn't going to arise if the setup costs are high and the competitor can't undercut and survive the competition phase.

All you need is for the profits from entering the market to exceed the entry cost, which is exactly the case when the existing provider is charging outrageously high prices.

It is certainly true that adding a competitor will increase total costs. But that means total costs will at most double. That's not good, but it's not anywhere near as bad as having a monopoly that can demand your lifetime earnings in exchange for saving your life.

And everybody knows that to begin with, which is why you get this:

> This is exactly why there aren't multiple competitors to residential ISPs, because after the risk and costs are factored in setting up overcapacity for a market isn't a good investment.

It would be a good investment if the incumbent ISP was charging $500/month for residential internet service. But they know if they did that then it would open the door to a competitor who could charge $400/month and still pay the cost of duplicating the entire infrastructure.

So instead the incumbent charges $50-$100/month, even in areas where they have a monopoly, because they know that price is low enough to deter new competitors from entering.

A credible threat of competition is enough to prevent prices from becoming completely outrageous even in areas where there continues to be a monopoly in practice. Only monopolies under no threat of competition, like the ones enforced through patents or Certificate of Need laws, can charge outrageous prices without that happening.

[alexanderstears]

I don't defend the status quo. I think this is the right way to resolve healthcare.

I agree with about 95% of this: https://market-ticker.org/akcs-www?post=231949

We just need smarter regulations:

> every medical facility needs to have a price for each billing code

> every healthcare facility has to publish their prices

> heatlh care facilities must honor their published prices for everyone

> if someone needs car and they can't pay, the government will pay for the care but the government holds a debt and can garnish wages / use tax refunds / credit welfare to cover the debt

If people could shop on price for routine care, medical companies would become more efficient and extend those prices to people in an emergency

[candiodari]

Have you seen healthcare regulations ? The lengths hospitals and drug makers have to go through to prevent ANY mistakes are simply not reasonable.

That's not 1/1000. Not 1/1000000. Not 1/1000000000. Zero. Entire companies get shut down because of a single mistake. Think about how ridiculous that is. A company owns 5 separate factories, and in one of them a product was produced that may, in a panel of doctor's opinions, have caused the death of a patient (mostly one who would have died without the medicine), and all 5 are immediately shut down until an extensive investigation is not just run, but run in an approved manner by outside experts, and the resulting cause was both found, approved by the panel of doctors and the government.

And of course, a company is supposed to take care of any patient they damaged, for life, full treatment for all ailments (not just the one that had something to do with what they did), ...

We used to let people prepare medicines in corner shops with at least a few ingredients they procured themselves. Needless to say, pretty cheap. Mistakes were ... not common, but certainly more so than today.

Until we find a balance between care provided and acceptable risk there will be no reasonably priced healthcare. Until we stop giving health at any cost, and count on "management" mistakes to do cost saving (regulating that people get thrown out of hospital the day after open heart surgery unless there are complications. Well, if you want to survive, you bloody well hope your doctor finds some complication. Needless to say, proposals for making it same day are on the table. Good luck).

And of course, like good capitalists faced with demands like this, companies don't say "are you bloody insane ? This will bankrupt the entire country", they say "How secure do you want it to be ? Perhaps even a bit more ? I mean we can always do better. That'll be $xxx(xxxxxxxxxxxxxxxx)".

[alexanderstears]

I 've seen a ton of healthcare regulations and apprently we're in agreement they leave a lot to be desired.

[dv_dt]

Healthcare often isn't billable in consistent units. Someone goes in for surgery, and they get opened up, despite pre-imaging, there are complex things that can go wrong and instead of a 1 hr 10k effort, you need to put in a 6 hours 100k effort? how is that billed? are you going to require statistics of probabily of going wrong too? By the time you get all these 'consistent billing units' figured out for all the multitude of ever changing procedures wouldnt have been cheaper just to have covered reasonable costs instead of maintaining a multi-way cost/trust verification excercise?

[alexanderstears]

how is it billed?

Go ask the people who get jobs as billers - most hosptials have more billers than beds, they can sort it out.

Before you go to surgery agree on the price of everything and ask for a video so you can verify the work was done as billed and there wasn't any padding. In an emergency situation, you're entitled to the price they advertise. IF you can't afford it, the government picks up the bill and maybe you pay for it, maybe you don't. If you want insurance, you can buy insurance but let the insurers use every actuarially relevant bit of information so the insurance works as insurance

[conanbatt]

I concur. The argument that healthcare in the US is broken because its a market almost triggers me. It has profound regulations that affect its market behavior.

[jeffbax]

"So I don't think one can generically fault 'regulation' for a poorly performing health market in the US."

Well articulated counterpoint: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...

Also, we live in a country where most places they don't even allow opening a new hospital without the permission of surrounding hospitals, and all of the recent healthcare regulations have encouraged a seriously problematic consolidation just like the big banks.

As an industry, healthcare is so over-regulated it isn't even funny. The good news is that drug prices are still generally falling outside of big examples like Daraprim and Epipens and there are fairly effective solutions to the spikes we could have if the FDA would get onto more reciprocity with other nations: http://marginalrevolution.com/marginalrevolution/2016/02/the...

Also relevant, the US Cost disease: http://slatestarcodex.com/2017/02/09/considerations-on-cost-...

[dv_dt]

I don't find that first link well argued at all: because corporations have achieved some degree of regulatory capture from the FDA, we need to eliminate regulations and let those same corporations run completely rampant and somehow that will result in better performance? That makes no sense to me.

Also, the comparison there in the drug vs the chair market there is poor too. The key difference between manufacturing drugs and chairs (as in the example), is that anyone could enter the chair making with one guys who has had high school woodshop. Manufacturing a drug has a much much higher bar...

[alexanderstears]

I don't find that first link well argued at all: because corporations have achieved some degree of regulatory capture from the FDA, we need to eliminate regulations and let those same corporations run completely rampant and somehow that will result in better performance? That makes no sense to me.

If that's what you got from SSC's cost disease article, you might have some bias in your framework.

[Sangermaine]

>Argubly regulation is the problem we're in this mess.

No, that's not even arguable. Other countries with even more highly regulated healthcare manage to provide it for much, much less. You're just regurgitating mindless libertarian talking points that have no relation to the real world.

The particular form of regulation in the US may be a problem, but regulation in general is demonstrably not.

[alexanderstears]

Let me clarify - the US's regulations are the reason the US has expensive healthcare.

IF we regulated single payer health care into existence, we'd have cheaper care. The problem isn't regulation per se, it's our current regulations.

[milcron]

Party A: Create new regulations which benefit pharma

Party B: Remove old regulations which disadvantage pharma

[alexanderstears]

I love the reductionism.

[hansthehorse]

The epipen delivery system and the Epinephrine inside of it should be sold at cost. Both were developed by the US Military (taxpayers) and American taxpayers should own it.

[alexanderstears]

At-cost? Enough to cover the executive compensation, right?

[tormeh]

>Argubly regulation is the problem we're in this mess. Do you think an epipen would cost $600 if there weren't a Government granted monopoly?

All property is government intervention. And property is good. Because property is capitalism, and capitalism is God's will.

/s

[evanwise]

I sometimes feel like "free-market" types are actually incapable of understanding this point. The idea that markets and property exist as some sort of independent, empirical objects is baked so deeply into their ideology that it's almost as if they lack the symbolic vocabulary to even conceptualize the idea that property itself is created by regulations.

[Banthum]

You seem very strongly invested in this point, which is strange considering how easily refuted it is:

Property existed long before third-party regulation.

Rather than ownership being enforced by a third party with monopoly on violence, it was enforced by the threat of escalating violence from the property owners themselves.

Eg. You take one goat from my herd and refuse to give it back, and we are now at war. Result: Nobody takes any goats.

So the property was defined by mutual understanding and mutual enforcement, not regulation.

This is still done in some societies and sub cultures (Eg. Criminals). Even animals do it, with things like territory or sharing food from a kill.

A mutual cultural belief in property strengthens this mechanism and makes it work more smoothly. This cultural belief is part of what ""free-market" types" (sic) would like to spread.

[evanwise]

It's interesting that you start off attempting to refute me but end up demonstrating my point. The cultural conditions in early agricultural societies, before the development of the city-state, were insufficient to support a strong rule of law, and hence, property as we now know it. Property and personal possession are not the same thing. Certainly, individuals claimed ownership of goods, and barter occurred, but these were far from the only or even the dominant modes of economic activity in early agricultural societies, which also incorporated gift economies and cooperative sharing of labor and goods. By interpreting past economic systems through the lens of capitalism, you are proving my point: that the defenders of the free market commit the fallacy of reifying markets and property, as we now define them, as some sort of inevitable emergent attribute of human society, when there have been many different economic systems throughout the history of human civilization, none of which fully correspond to the abstract conception of the free market as discussed by economists.

[dv_dt]

And with those conditions economic growth and stability of society seems much lower than the more civilized alternatives...

[hacking_again]

This doesn't mean property exists in the same way that objects exist. A piece of property is just a protected object.

[alexanderstears]

Go try to wrestle a caveman for his fur pelt and see if he considers it to be a protected object.

Force protects the object, sometimes the government exerts the force sometimes not.

[tormeh]

>Go try to wrestle a caveman for his fur pelt and see if he considers it to be a protected object.

But if I show up with a better club then all his stuff is now mine. A third party enforcing certain resource allocations with overwhelming force is different to everyone defending their own stuff.

Government is the difference between property rights and might-makes-right.

[hacking_again]

Eh, I don't disagree, I was just trying to distinguish between property existing and objects existing. But maybe force defines existence all the way down.

[philwelch]

Property is created by government, but markets are more like evolution or society; a system that emerges naturally out of multiple separate but interacting agents given the right set of conditions (namely, scarcity and the ability to exchange goods and services).

Even in places like East Germany or prison where overt markets are suppressed, people still exchange things with each other, even developing bootleg currencies such as loose cigarettes. And if there’s a sudden shortage of a specific good inside these black markets, the price will go up; likewise if there’s a sudden surplus, the price will go down; likewise; if there’s a sudden surplus in whatever good is used as a currency (e.g. cigarettes) then there will be inflation, at least until its cost-effective to switch currencies.

[131012]

Or swords and chainmails if we go back to the birth of common law and guns and bacterial warfare in the case of Turtle Island aka Americas.