[pcai]

I think you’re still missing the point - it’s NOT classic supply and demand because the mechanism by which that works is prices, and in many healthcare markets including the US — the buyer isn’t the payer, and shortages lead to rationing (via wait times) rather than increased prices, so often increasing supply doesn’t change prices even as it increases aggregate costs (because there’s still excess demand and rationing).

[tptacek]

For this argument to work you have to believe that decreasing the price of service delivery wouldn't decrease the price of health insurance. Provider costs dominate US national health expenditure, like it's not even close; it's not a full order of magnitude difference but it's close to one.

[hangonhn]

But part of the provider cost is driven by the availability of money to pay, which is part of the reason why drug costs are so much higher than in the US. For example, the doctor has no strong incentive to prescribe less costly drugs since they don't pay. The patient don't know any better and aren't the payers either. The insurance has some control over what they will pay for and how much but except for some cutting edge treatments, it is very hard for them to say no. This is part of the reason why insulin in the US is so expensive and why drug companies advertise to doctors and patients, etc.

I think in countries where the health care costs aren't as astronomically high as the US there is some form of government intervention to distort the market. And the original post is more or less arguing for a market distortion that doesn't rely on simple price signals to bring costs under control. But that is very different than what has happened in Denver's housing market.

[tptacek]

Drug costs are also a small percentage of the national health expenditure, which is dominated by procedures delivered in hospitals and outpatient clinics. I don't accept the logic you're using for drugs, but we don't reach that question until we figure out why the single largest health expenditure in the United States has no impact on health insurance costs, which are the primary way Americans interface with the health insurance system.

If that expenditure does impact health insurance costs, then the rebuttal given above about increasing the supply of doctors not improving affordability fails.

If you google [National Health Expenditure spreadsheet], there's an annual spreadsheet that has includes an incredible amount of detail about where we spend money, broken down in a variety of different ways.

[pcai]

> For this argument to work you have to believe that decreasing the price of service delivery wouldn't decrease the price of health insurance.

I think we are talking past each other. My argument is not that lower prices for medical services wouldn’t lead to lower insurance costs. My argument is specifically that increasing supply doesn’t necessarily lead to lower prices for medical services. It would be quite a finding if US cities with more doctors per capita have cheaper medical services but if anything the opposite is true