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by dragonwriter
1460 days ago
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> My point is that we know properly functioning markets set fair prices For frequently-repeated purchases of goods with robust competition for close alternatives where the approximate total infinite-horizon costs and utilities resulting from the decision are both entirely experienced by the participants to the exchange and very clear before or quickly after it occurs so that behavior can rapidly adjust to more optimal alternatives when suboptimal choices are made, in other words where the perfect knowledge assumption underlying rational choice theory is, while it is never actually accurate, at least closely approximated in the relevant market, and there are no externalities making inefficient in the global sense actions efficient from the perspective of participants. Medical care very much does not fit this pattern. |
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It painfully obviously does not. It is literally a market with both buyer and seller colluding to raise the prices!
Why? A few reasons. Insurance profit is capped as a percentage of expenditure, so if they think there is more money they could extract from the insurance customers total if things cost more, it is in the insurance company's interest for prices to go up. Providers are not going to balk at getting mopre money.
This is only one of the many ways the system is screwed. The fact that medical billing coders need to customize the codes they submit for the exact same procdure to depending on what insurance company it is being sent to (for example, this is common for a procedure that is not a perfect fit for any standardized codes, or where some insurers are still using the older revisions of the medical coding standards, etc) and other similar nonsense also artificially inflates costs.
Basically everything about the system from top the bottom seems to be designed to prevent market based price discovery from working well.