[bohemian99]

Exactly- people don't/can't really comparison shop when it comes to medical procedures. They don't know how good their doctors are at it, this is all unpublished information.

Similarly college textbooks- if your professors assigns work from their book, then you need that book. You can't competitively shop on that.

As the response points out, all of these groups and then backed by accreditation systems to limit new entrants.

[dalbasal]

Starting from Patrick's question, and working through the list...

It suggests that some of our market-thinking has been off mark. Free-market economic policies have tended to define things in terms of market "freeness." How much intervention, etc. This is commonly how we think politically, because it relates directly to policies.

The way these affect reality is through the market structures themselves. We can regulate or deregulate barber shops and restaurants... but within wide margins they are likely to remain pretty good market structure. Lots of choice, competition, churn, etc. Hospital services or college tuition are structurally different. If we are "laissez faire" with hospitals, and have heavy handed regulation for restaurants... Restaurants would still behave like a more free market, just because of innate structure.

It would take a truly byzantine accreditation system to make restaurants look like textbooks or pharmaceutical drugs. Someone would literally have to assign you a dinner reservation.

[aeternum]

I think you're right that some industries are more conducive to competition in general. However shouldn't we be more careful then in terms of creating barriers to competition?

If we treated restaurants like hospitals/healthcare we would give your employer a tax break in return for determining the set of restaurants you may dine at. Any new recipe or cooking method used by a restaurant would need to first be approved by the FDA. Restaurant chains would not be allowed to operate across state lines. Restaurant would have to accept below-market pricing for some proportion of customers (medicaid). Each restaurant would need to hire a law service to ensure they comply with HIPPA, and staff a department to allow import/export of your dining history.

[dalbasal]

Possibly.

But, I think a lot of economics gets stuck in a sort of theoretical mud. In theory, barriers to competition, entry or always have negative effects. Those negative effects can be small, big, or irrelevant relative to other effects related to the same policy.

What i am suggesting, is that industry structure determines these. So yes, there are theoretical policies that might make hairdressing worse or hospitals better in this regard. In reality though, policies are very often acting within margins where competitiveness doesn't move the needle much either way.

Assuming a thriving restaurant market exists, it will probably remain pretty competitive under any "normal" policy regime. No one is really going to implement FDA approvals for recipes or tax related employer funding schemes.

No one is going to implement a totally nonaccredited hospital system, where doctors & nurses don't have to be trained or licensed. At the very theoretical end, laissez faire dynamics might yield a market-based regulation system that accredits doctors and such without government intervention. But once again (a) that's very unlikely and (b) if it did happen that would still be regulation.

For 99% of real life scenarios, restaurants lend to a free market dynamic while hospitals do not. Governments are involved, but they do not create this reality. It is innate. One policy regime or another (short of communism or such) is not going to change that.

[aeternum]

Does licensing of doctors and nurses really add much? Don't hospitals have sufficient incentive even without licensing to ensure that their doctors and nurses have the necessary skills?

Uber/Lyft have their problems, but one takeaway is that a simple rating system works better than complex licensing and medallions.

[cryptonector]

This is especially true in the U.S. There's no market as such because there's no pricing signals. The barriers to entry are super high: education and licensing of doctors is extremely restrictive, while construction of hospitals requires prior political approval ("certificate of need"!). All the HMO/PPO in-network thing also adds opaqueness, and discourages any negotiation by the consumer. This is madness.