I think that Richard N. Lorenc’s analysis at the Foundation for Economic Education is right as far as it goes. The title of the post is “Why Luxury TVs Are Affordable when Basic Health Care Is Not” and here’s the story he tells:
Imagine this. You are feeling under the weather. You pull out your smartphone and click the Rx app. A nurse arrives in 20 minutes at your home. He gives you a blood test and recommends to the doctor that she prescribe a treatment. It is sent to the CVS down the street, which delivers it to your door in 20 minutes. The entire event costs $20.
Sounds nuts? Not so much. Not if health care were a competitive industry. As it is, medical care prices are up 105% in the last 20 years. This contrasts with the television industry, which is selling products that have fallen 96% in the same period.
Television sets today are commodities, mostly manufactured outside the United States. Healthcare is highly regulated. The constraints on a completely free market in healthcare include insurance regulations, occupational licensing, patents, certificates of need, the right to sue for malpractice, FDA approvals, and thousands of others.
I think it’s true that if healthcare were completely unregulated it would be cheaper. Here’s my question. Do we really want unregulated healthcare? I don’t think we do and as a society we decided we don’t more than a century ago. How soon we forget!
If we don’t that means the policy solution isn’t eliminating regulation but adopting other alternatives to ensure that the economic surplus is divided between suppliers and consumers rather than being captured almost entirely by suppliers as is the case today.
That means that the political process pokes its nose into the process. It’s messy and inefficient but it’s better than the alternative.
Lasik. All of the regulations, none of the insurance paperwork. Oh, and it’s coming out of the patient’s pocket.
It has to be regulated because, if not, health insurance companies have the perverse incentive to not pay out claims to maximize their bottom line.
Refractive surgery accounts for .06% of healthcare spending. You can’t generalize from that to all healthcare.
Lasik is cosmetic surgery, not real surgery. It is not necessary. There is a (near) perfect substitute. You don’t have to have on call coverage if it goes bad. I heartily agree that all of the surgery which meets the same conditions as Lasik surgery can easily see cost cutting.
As to your article. LOLOL. A traveling nurse for $20/hr (including benefits mind you). Cracks me up. Why do people who know nothing about health care feel free to write such stupid stuff?
Steve
Yeah, I laughed at the $20 part too. You can’t get any service to show up to your door for that price – it’s often about $100 just to make the trip. Hell, it’s $80 for one hour of vehicle troubleshooting at any dealer or mechanic and they don’t come to you. My guess is more like $200 than $20. Who is going to pay $200 minimum for feeling “under the weather?”