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Thread: Time Mag: Free market doesn't work for health care

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    Politics.ie Member seabhcan's Avatar
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    Default Time Mag: Free market doesn't work for health care

    In its first piece of real journalism in a generation, Time Magazine has a massive exposé into just why US medical costs are so high. As the author says, the US health care debate is all about 'who should pay' and never looks at why US hospitals charge multiple times the price of other developed countries. He finds that officially 'non-profit' hospitals are actually massively profitable.

    Time: Why medical bills are killing us

    The reason is simple. US hospitals massively and outrageously overcharge their 'customers'. Example charges include:

    * $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare
    * $13,702 for “1 RITUXIMAB INJ 660 MG.” The average price paid by all hospitals for this dose is about $4,000
    * $995 for the ambulance ride
    * $18 each for Accu-chek diabetes test strips. Amazon sells boxes of 50 for about $27, or 55¢ each
    * $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.

    Unlike those of almost any other area we can think of, the dynamics of the medical marketplace seem to be such that the advance of technology has made medical care more expensive, not less. First, it appears to encourage more procedures and treatment by making them easier and more convenient. (This is especially true for procedures like arthroscopic surgery.) Second, there is little patient pushback against higher costs because it seems to (and often does) result in safer, better care and because the customer getting the treatment is either not going to pay for it or not going to know the price until after the fact.
    This lengthy article is well worth a read. The ultimate point is that without price regulation, hospitals can charge what they want and make massive profits at the expense of the sick and the poor. Hospital overcharging is the reason why the US medical insurance system is broken and unaffordable, and why 60% of personal bankruptcies in the US are due to medical bills.

    And ultimately, in exchange for spending 20% of GDP on their health care, Americans are more unhealthy and live shorter lives than than people in other rich countries where health spending is less than half that. The article also points out that Obamacare - which is all about the insurance companies - wont even try to fix the issue of price regulation.

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    Quote Originally Posted by seabhcan View Post
    In its first piece of real journalism in a generation, Time Magazine has a massive exposé into just why US medical costs are so high. As the author says, the US health care debate is all about 'who should pay' and never looks at why US hospitals charge multiple times the price of other developed countries. He finds that officially 'non-profit' hospitals are actually massively profitable.

    Time: Why medical bills are killing us

    The reason is simple. US hospitals massively and outrageously overcharge their 'customers'. Example charges include:

    * $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare
    * $13,702 for “1 RITUXIMAB INJ 660 MG.” The average price paid by all hospitals for this dose is about $4,000
    * $995 for the ambulance ride
    * $18 each for Accu-chek diabetes test strips. Amazon sells boxes of 50 for about $27, or 55¢ each
    * $7 each for “ALCOHOL PREP PAD.” This is a little square of cotton used to apply alcohol to an injection. A box of 200 can be bought online for $1.91.



    This lengthy article is well worth a read. The ultimate point is that without price regulation, hospitals can charge what they want and make massive profits at the expense of the sick and the poor. Hospital overcharging is the reason why the US medical insurance system is broken and unaffordable, and why 60% of personal bankruptcies in the US are due to medical bills.

    And ultimately, in exchange for spending 20% of GDP on their health care, Americans are more unhealthy and live shorter lives than than people in other rich countries where health spending is less than half that. The article also points out that Obamacare - which is all about the insurance companies - wont even try to fix the issue of price regulation.
    Same goes for banks & many other public services.

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    A basic market analysis of healthcare insurance will rapidly explain why factors intrinsic to the market itself mean that a free market in health is highly inefficient.

    Naturally, that's often not an acceptable conclusion, but there we go - markets are very good for some things, not so good for others, and lousy at certain things. Healthcare is one of those things. It's a mechanism, not a divine force.
    Never let the best be the enemy of the good.

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    Politics.ie Member firefly123's Avatar
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    Quote Originally Posted by CarnivalOfAction View Post
    Same goes for banks & many other public services.
    How exactly is US medical insurance a public service? Also Banks (although massively bailed out by the public) are not public services. God Knows there is inefficencies enough in the real public service to be going on about with having to resort to say stuff like what you just said.
    Life is hard
    That's why no-one survives

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    Politics.ie Member firefly123's Avatar
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    Quote Originally Posted by ibis View Post
    A basic market analysis of healthcare insurance will rapidly explain why factors intrinsic to the market itself mean that a free market in health is highly inefficient.

    Naturally, that's often not an acceptable conclusion, but there we go - markets are very good for some things, not so good for others, and lousy at certain things. Healthcare is one of those things. It's a mechanism, not a divine force.
    Life is hard
    That's why no-one survives

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    Politics.ie Member seabhcan's Avatar
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    Quote Originally Posted by CarnivalOfAction View Post
    Same goes for banks & many other public services.
    I would say health care is special in that it is far far more difficult for 'customers' in a hospital to make price decisions. You can't, quite literally, walk away from an A&E and shop around for more competitive product. The customer cant make a judgement about whether a particular treatment is needed or correctly priced.

    The US does actually regulate prices for some of its citizens - those who are retired - who pay far less than working age people or children. Its strange that price regulation can't be extended to everyone.

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    Politics.ie Member Marcos the black's Avatar
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    It's O'Reilly's fault.
    You'll never go broke appealing to the lowest common denominator.

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    The article doesn't make any sense.

    It goes after the free market but then says "without regulation" etc etc....

    Well does the US healthcare system have regulation? Yes or no? Simple question.

    And if it does, then how exactly does that constitute a Free Market?

    Such bollox.

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    Politics.ie Member seabhcan's Avatar
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    Quote Originally Posted by R3volution_R3ady View Post
    The article doesn't make any sense.

    It goes after the free market but then says "without regulation" etc etc....

    Well does the US healthcare system have regulation? Yes or no? Simple question.

    And if it does, then how exactly does that constitute a Free Market?

    Such bollox.
    If you mean - are prices regulated - the answer is no.

    The article is quite clear - did you actually read it?

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    Politics.ie Member sic transit's Avatar
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    Isn't all of this widely known anyway?
    "There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self." Ernest Hemingway

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