There are many examples of for-profit systems that don’t have this problem, it’s really the heavily regulated for-profit systems that have this “cost disease” issue. It seems to happen whenever there isn’t a transparent market, like the tuition price of a university, the cost of your surgery, or the cost the government will pay for some infrastructure. The buyer doesn’t know what they’ll pay or what product they’ll get for it, so it’s basically not a free market at its most fundamental level.
It never can be a free market because people are willing to pay an infinitely high price to keep themselves alive, and you can't pick and choose because you need the care here and now.
The majority of healthcare products are not life saving treatments, nor do they require a solution here and now, and those solutions rarely happen immediately even when they do because of aforementioned horrendous service quality of the industry.
A standard healthcare visit looks like:
- you have some concerning symptoms
- you schedule an appointment with a doctor that’s at least several days if not weeks away
- you go to the appointment, wait 40 minutes, see the doctor for 10 minutes and they either prescribe you a medicine, request labs, imaging, or refer you to a specialist.
- if it’s either of the latter two, you have to book another appointment and this one is likely weeks out.
- you go to get imaging or see a specialist and repeat the loop from the second step
The whole process takes months, there’s plenty of time to for consumers to choose options but they aren’t presented with any. If you get a prescription, you just take what the doctor prescribed and you won’t even know how much it costs until you go to pick it up. You have no idea what the labs or imaging cost either, nor any options to choose where to get them. The whole system is just a huge mess of misaligned incentives.
How does "this is less common in healthcare" become "this is irrelevant"? My point is that healthcare can never be treated as a free market because you'll be sacrificing the dying people, even if there are few of them. And even if you don't need a treatment here and now, an illness that you must deal with awards the healthcare industry infinite leverage. You can't choose not to be a customer, you have to pick someone, which means the providers can silently collude with one another. Even if you're not dying, the power and incentives in the healthcare industry are so misaligned that the market model is inherently rotten when applied to it.
Healthcare insurance markets are fundamentally broken due to information asymmetry. The situation is aggravated in the USA by vertical consolidation among providers and regulatory failures. (https://www.nber.org/papers/w34928)
It’s also a pretty inelastic good(most people don’t want to die or be sick ever) and decisions can be made without your consent if you are unconscious, sometimes even when you are conscious but it’s been decided that you aren’t competent at the moment.
1. way too many regulations and lobbies that prevent any relaxation by scaremongering
2. unions that artifically constrain labor supply. doctors lobby to keep number of doctors low and regulatory capture preventing forign doctors from entering workforce. Uk for example imports doctors from india.
both political parties have their own agenda to not disrupt above . democrats love regulation and unions. republicans love corporate profits from regulatory capture.
healthcare is exterme opposite of freemarket despite the veneer
Every country has for-profit elements in their healthcare system. The USA is uniquely dysfunctional in its governance. There is regulatory capture at every level.
> Every country has for-profit elements in their healthcare system
You’re right. The Swiss system is deeply privatized, down to compulsory private insurance [1]. It just isn’t as opaque and corrupt as the American one.
Part of the problem with the American system is everyone is cynical with respect to reform, and has a singular bogeyman they’re convinced explains all of the problem, with zero room for multiple causation.
> and has a singular bogeyman they’re convinced explains all of the problem, with zero room for multiple causation
Not sure about that. But each person tends to have something like a single sentinel flag. E.g.: does medicare negotiate drug prices? And if there's a change for the better, they won't believe it's anything but a short term grift until they read it back as "true" from at least 16 different threads over the course of, say, 9 consecutive years.
Given that their representatives currently use phrases like "medicare advantage" to mean "off traditional medicare and on private insurance," that caution seems warranted.
This is an obtuse comment because it doesn't mean anything. Yes we all know that every country has for-profit elements. We also all know that every country has social elements in their system. And non-profit elements.
> Every country has for-profit elements in their healthcare system
You might want to check that. In Cuba's case, not really unless you focus on their export of medical services. But for the greater case it's totally free. And qualitatively better than what the US provides.