In America, government fixes all Prices (called “fee schedules”) for health care devices, drugs, services, and procedures that are provided with public money (Medicare, Medicaid, Social Security, the VA, etc.)\u00a0 The private insurance market also uses these government fixed prices, but usually at a discounted rate–still price fixing, just at a discount.<\/p>\n
Health care price-fixing happens at the political nexus where interest groups and lobbyists meet legislators and regulators.\u00a0 These politics do not yield the sort of equilibrium you get with the market forces of supply and demand.\u00a0 No one involved in establishing these price points actually has to pay for what they’re pricing.\u00a0 Therefore the demand element of this health care pricing mechanism is a fiction.\u00a0 Prices that come out of this process will only randomly reflect what real supply and demand would, and will only randomly be rational.<\/p>\n
Meanwhile, legislators and regulators do not operate in a vacuum.\u00a0 They get ALL of their demand side pricing information from a) providers and b) insurance companies.\u00a0 They get ALL of their supply side pricing information from a) providers, b) insurance companies and c) manufacturers.<\/p>\n
No inputs to health care price-fixing come from the actual consumers of health care, and the consumers of health care are the ONLY element in the health care market who are CAPABLE of providing real demand information–because they are the ones who actually pay for it<\/em>!<\/p>\n To summarize, providers want higher health care prices because they earn more money that way.\u00a0 Insurance companies want higher health care prices because they earn more money on more expensive products and services.\u00a0 Manufacturers want higher health care prices because they earn more money for their goods.\u00a0 And legislators and regulators are disinterested third parties who exist to be persuaded to control price points, where all the persuasion comes from parties who have an interest in higher price points.<\/p>\n This is the debate we should be having.\u00a0 Any proposed structural change to our health care market that does not address what fundamentally controls the price of health care in America will not materially improve matters.<\/p>\n Our current system of health care pricing is disconnected from consumers and can only result in a poor allocation of health care to meet real needs.\u00a0 This is what we have today.\u00a0 If we don’t change this, we will never optimize the provision of health care, with the cost of health care, and with a rational price for that health care.<\/p>\n Government price fixing causes shortages–an economic fact of life whether the object is gasoline or health care.<\/p>\n","protected":false},"excerpt":{"rendered":" In America, government fixes all Prices (called “fee schedules”) for health care devices, drugs, services, and procedures that are provided with public money (Medicare, Medicaid, Social Security, the VA, etc.)\u00a0 The private insurance market also uses these government fixed prices, but usually at a discounted rate–still price fixing, just at a discount. Health care price-fixing […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[29],"tags":[],"class_list":{"0":"post-1530","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-health-care","7":"entry"},"_links":{"self":[{"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/posts\/1530","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/comments?post=1530"}],"version-history":[{"count":0,"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/posts\/1530\/revisions"}],"wp:attachment":[{"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/media?parent=1530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/categories?post=1530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/elbertcounty.net\/blog\/wp-json\/wp\/v2\/tags?post=1530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}