[avar]

    > The second you detach the consumer from the
    > price of something, even through an
    > intermediary such as health insurance, that
    > is when they stop caring about how much
    > something costs, and so the price jumps.

In reality, this claim doesn't survive a cursory glance at the OECD's numbers for health expenditure per capita[1].

You'll find that (even ignoring the outlier that is the US health care system) that in some countries where consumers bear at least some of the cost directly via mandatory insurance and deductibles, the spending per capita (and which survives a comparison with overall life expectancy etc.) is higher than in some countries where the consumer is even further detached from spending, via single-payer universal healthcare systems.

Or, the other way around, it's almost like it's a very complex issue that resists reducing the problem to an Econ 101 parable.

1. https://www.oecd.org/en/publications/2023/11/health-at-a-gla...

[trollbridge]

If consumers actually directly paid the whole cost for health services (as opposed to a fixed price, like a $20 copay, etc.), the prices charged would become far more regular.

An easy way to examine this is to compare the price of over-the-counter versus pharmaceuticals. If a third party weren't paying for them, the price would have to either come down to something affordable to the average person, or else the market for it would shrink to only the wealthy.

[avar]

I'm aware of your and the GP's claim, I'm saying it doesn't survive contact with reality.

If you look at e.g. the per-dose price of insulin it's as low or lower in countries with single-payer universal systems, where someone requiring insulin is never going to have any idea what it even costs, because it's just something that's provided for them should they need it.

In that case it's usually some centralized state purchaser that has an incentive to bring prices down, or a government that has an overall incentive to keep the inflation of its budgetary items down, which ultimately comes down to public elections etc.

In any case, a much more indirect mechanism than someone who'd be directly affected paying the costs associated with the product, which directly contradicts this particular argument.

[lyu07282]

Why do you even argue against someone that doesn't think "insurance" should exist? Its a troll, not even most serious libertarian freaks are that idiotic. Our goal should be to make sure these freaks have no power.

OF COURSE single-payer means lower prices, the government has a shit ton of power in negotiating prices if they want to. They don't want to because they are corrupt, freaks like the above are only there to rationalize the theft. They need to be defeated politically.

[int_19h]

The original argument wasn't against public healthcare per se, but against the US system in which it really is run as insurance, with multiple competing providers, who therefore don't have the power to negotiate down prices.

It's very easy to find examples of abuse in this system. For example, in modern "factory towns" around corporate campuses, somehow, routine dental maintenance costs exactly the maximum amount provided for this purpose by the employee health plan.

[lyu07282]

I was posting in reference to:

> If consumers actually directly paid the whole cost for health services, the prices charged would become far more regular.

Which is arguing against the very idea of insurance which distributes risk, its an absurd argument not even libertarians make. The problem for literarians/neoliberals is that we already have exactly the system they think should work great, it just doesn't, but they completely refuse to ever recognize that the reason it doesn't work is systemic and it will never be fixed by more literarianism/neoliberalism, we need to shove it. Whats needed is a single-payer, universal, zero(!!!)-private, public health care system.

[int_19h]

Why insist on single payer? It's not even dominant in Europe, and it makes the whole thing a much harder sell politically, yet there are no clear evidence that single payer is superior to other public healthcare arrangements.

[saghm]

If it "would have" to happen, how do you explain the data cited by the comment you're responding to where it clearly hasn't?

Reasoning about things abstractly without taking in into account actually measured phenomena that conflict with your conclusions; just ask Aristotle.

[lucumo]

> OECD's numbers for health expenditure per capita[1].

Interesting that the graphs use PPP, but that the age-adjusted graph still shows the richer OECD countries spend more than the poorer ones. I wonder what's up with that.

[reliabilityguy]

These reports tend to ignore how fast you can get a specific service or test done. There is plenty of anecdotal data out there that in US you can get CT or MeI the next day, while in many countries in the EU you have to wait months.

I think looking only on the spending per capita tells us nothing about accessibility of service, and its quality. Once you start to consider those things, imo, the whole thing is not as a clear cut as it looks.

[cowpig]

Wouldn't that be a latent variable in health outcome data?

[kortilla]

Markets with prices fixed by the government have fixed prices. This isn’t interesting for markets

[AnthonyMouse]

It's also a mechanism for some governments to cheat, because medicine is R&D-intensive.

Suppose that to devise some treatment for 10 million people worldwide, it costs a billion dollars once for R&D, i.e. $100 each, and then $10 more per person to actually manufacture it. So the average person will have to pay no less than $110.

Then some countries say "that costs you $10 to manufacture, we won't pay more than $40" and if you don't take the $40 you can't sell there at all. So, if you don't recover $30 of your R&D per person there then you recover $0, even though you need to average $100.

If everybody does that it doesn't work; they go out of business. But suppose that half the patients live in those countries and the rest live somewhere that the company can charge enough to sustain themselves, i.e. in those countries people have to pay an average of $180 instead of $40 so the total average can stay $110. Then they don't go out of business, but the countries not paying their share are cheating the people in the other ones.

And to add insult to injury, you then hear the people in the countries paying $40 saying "why are you paying $180 instead of doing it like we do"?

[matthewdgreen]

Yeah that’s the story people tell. On the other hand, I need to take a brand name version of a medicine that was patented in the early 20th century, and in the US the co-pay alone costs me $200/mo or more (not including what insurance pays) while I can buy it from Canada for $30 without insurance. (The generics cost a similar amount, but don’t work as well due to bioavailability issues.) So while I appreciate the idea that high US prices are all about R&D, I also have pretty visible evidence that US pharma will just charge whatever the market will bear, even for drugs that are long out of patent and inexpensive to manufacture.

[AnthonyMouse]

The trouble is that it's both things at the same time. Countries that fix prices are paying less than their share of the R&D and the US market has bad regulations that unnecessarily limit competition.

The situation you're describing can happen in one of two ways. The first is that the more bioavailable version wasn't patented in the early 20th century, only the less bioavailable version, and then the version you like is still under patent and that's exactly what's supposed to happen. They get to charge a lot until the patent expires as the incentive to invent the more bioavailable version to begin with, and then Canada isn't paying their share and the US will be paying less when the patent expires, and if you don't like what they're charging then you can use the old version until the patent expires.

The second is that nobody is making a generic of the more bioavailable version even though the patent is expired. The US could and ought to fix that by remediating whatever regulation is impeding other companies from entering the market even though they should be able to. But then we're into a different problem because it can't be other countries not paying their share for something still under patent if it isn't still under patent.

[matthewdgreen]

>The second is that nobody is making a generic of the more bioavailable version even though the patent is expired.

I've been taking this drug since 1995 and the brand-name version has been in production (in its current format) since 1938. I don't think there have been any substantial improvements in the formulation in decades (as evidenced by my dosage, at least.) It certainly isn't expensive due to patents.

What's happening here is that in the US generic alternatives are supposed to demonstrate bioequivalence (meaning the same bioavailability), but the standards are lax and not well-enforced. Insurance formularies aren't going to spring for a brand-name drug formulation that costs 10x when the government has certified the cheap generic as bioequivalent. Manufacturers of the unpatented (but more bioavailable) brand-name drugs know that in reality some subset of their patients will need their formulation to keep blood levels stable, which means that in the US they can crank their prices way up and soak a bunch of sick people. In Canada they can't do this. Nothing about this is really defensible.

Which brings me back to the larger issue. High US drug prices can be due to both (1) recouping R&D costs and (2) greed, but the greed is enough to render our current system unworkable. You can't just assign manufacturers a monopoly and the right to charge whatever they want, and expect that they won't abuse this to soak desperate sick people with prices far in excess of their costs (as they are clearly doing.) So yes, you can point to the cost of R&D as one reason we should all (globally) pay more for some drugs, but you can't really use the need for R&D to justify the US system, which is inefficient and dangerous.

[AnthonyMouse]

Here's the part where it seems like we're still missing some information. There is an unpatented formulation of the drug which is better enough that patients are willing to pay a large premium for it, but there is only one company making it. It can't be that the other companies don't like money, so what's the actual reason?