[rgbrenner]

The US healthcare system is not a free market. The pricing system--critical to any free market--is broken when it comes to healthcare. Customers are unable to shop on price (even for non-emergency care).. but also the AMA limits the number of doctors; and hospitals require a certificate of need (giving competitors a veto over new businesses), for example.

It isn't just that we spend more... if that was the only issue, then everything would be fine because we would be obtaining what we paid for.

But since it's not an efficient free market... the fact that we spend more only increases the urgency that we reform the system... since those inefficiencies become so huge in a system that accounts for such a big portion of GDP.

So while RCA's analysis might be perfectly correct... unless he also proves that the healthcare market is at least as efficient as a free market system... then we still need to reform it.

[yellowstuff]

A post from RCA's blog a year ago addresses that more directly:

https://randomcriticalanalysis.com/2018/11/19/why-everything...

He argues very convincingly that high income leads to high health care spending very directly. Not only is the US not an outlier in terms of inefficiency, but he can't find any compelling examples of countries significantly improving on health care spending predicted by actual household income. (Other countries have better health outcomes, but not significantly less spending relative to income.) So while common sense indicates that there's lots of room to reform the system, analysis of data from around the world indicates that no one's been able to do much to avoid spending roughly a fixed percent of actual income on health care.

> The most successful cost containment regime in the OECD was probably the UK (NHS), which was perhaps an accident of history. They rationed particularly aggressively and managed to hold costs substantially below what we would expect for a country of its wealth for a few more years than usual.

> However, people (voters) ultimately wouldn’t stand for it, so this rationing effort was radically reduced (budgets expanded). Today they are much closer to expected spending levels.

[beagle3]

First time I hear of RCA, I will have to read the analysis to evaluate, and it might already have been addressed, but ...

a) many (perhaps the majority, don't have time to source now) of the bankruptcies in the US are due to medical issues and spending, and at least 75% IIRC of those going bankrupt from medical spending HAD insurance. This is practically unheard of outside the US.

b) The rate of growth of US spending on healthcare, especially government spending on healthcare, far outstrips the rate of growth of money / wages / any other measure of something that can pay for it.

c) The same medicines by the same manufacturers and often the same production lines (not just equivalents or generics, which are much cheaper still!) often cost 10-100 times more in the US than they do in other places. The DaraPrim and QuestCor cases are famous for being outliers, but they are only outliers in the speed of price increase, not in the fact that prices in the US (but not outside the US) keep going up irrespective of costs.

It was not until I lived in new york that I heard gainfully employed people say things like "I have to stitch my cuts my self because I cannot afford medical care"; neither could I understand George Carlin's "dirty doctor" joke.

So perhaps the overall spending/GDP analysis is not direct proof, but the US medical and healthcare system is very, very sick. Karl Deninger at the https://market-ticker.org has been documenting these atrocities very dilligently since 2007.

[rcafdm]

> a) many (perhaps the majority, don't have time to source now) of the bankruptcies in the US are due to medical issues and spending

The vast majority of medical bankruptcies have nothing to do with the cost of medical care, but the disruption to career/income flow imposed by illness. This is clearly a problem in other countries as well.

https://www.nejm.org/doi/pdf/10.1056/NEJMp1716604

> The rate of growth of US spending on healthcare....far outstrips the rate of growth of money

This is true in other OECD countries too. Further, this doesn't mean what you think it does. As our productivity rises, the share spent on consumption categories with high productivity growth (increasingly low relative prices) can decline, which frees up spending to be spent on health and other areas subject to less productivity growth (the majority of the expenditure growth corresponds to rising real health consumption tho)

https://randomcriticalanalysis.com/2019/12/03/no-means-no-th...

> The same medicines by the same manufacturers and often the same production lines ... often cost 10-100 times more in the US than they do in other places

One might be able to find outliers of this sort, but that clearly doesn't reflect anything close to central tendencies (mean, median, mode, etc), especially when compared (accurately) to other high-income countries. Richer countries, like the US, generally pay relatively higher prices.

The US may pay a somewhat higher premium, but there are tradeoffs here vis-a-vis incentivizing innovation in the long run. It's also not widely appreciated that the US pays markedly less for generics....

[nradov]

Please stop posting misinformation about the AMA. It does not limit the number of doctors. The actual bottleneck is in residency slots, and the AMA is actually advocating to increase funding there.

https://www.ama-assn.org/press-center/press-releases/ama-fun...

Most patients are able to shop on price. The majority of insurers now provide web sites where their members can obtain estimates of out-of-pocket expenses for common treatments at network providers. There are still some gaps and room for improvement but most people are able to do price comparisons for non-emergency care if they want to.

[koolba]

Bullshit. Trying to get prices from an insurance company requires hours of time, researching individual billing codes, and at best leads to a ballpark guess.

[nradov]

That's not true. Most insurers allow you to search by text and see an accurate estimate of what you would pay at each provider. Such features aren't universal yet but the majority of patients have access.

[IAmEveryone]

Your argument is circular: You are assuming a "free-market system" to be better than the US health care system. Then, you use this assumption to "prove" that US health care is suboptimal. Which in turn you're using to argue for a "free market" system.

They are making an empirical argument that pricing in the US is not actually out of line when compared to the correct base. This would imply that the US system is about as efficient as all others. And considering the differences between vastly different systems are almost negligible, it is also an argument that these systems are rather efficient. Because if there were easy wins with any specific measures, you would expect some systems to improve relative to others with skill or just luck.