Our Great Helath Care System

[Jenny A]

We mostly pay for healthcare with insurance. The insurance is not analogous to fire or auto-insurance as it's intended to pay for ordinary expected expenses as well as catastrophic ones---sort of like if your auto insurance paid for oil changes.

Because that is what the customer wants and that is what the market demands. You gonna tell me that both the customer and the market are wrong? People like to get something for their money. Insurance companies still have a mint practically attached to them - so I don't want to hear any bitching from that corner either.

Medicare, tax incentives for employer paid insurance, and requirements that employers provide insurance provide artificial incentives for the current system.

As the system is currently set up, it would be insane to want anything but insurance. Insurance companies get discounts of 30% and more from health providers. Medicare also demands discounts. As insurance and Medicare make up over 85% of the market, such discounts are not tenable. So the healthcare providers jack up the "normal price" (which is only actually charged to the uninsured) and discount from there. Thus if you are uninsured you must pay a 30-80% or more premium to pay in cash without paperwork. Of course we want insurance. Under the current system we can't afford not to have it.

But that doesn't mean we wouldn't be better off if there were no insurance, or if health providers had to charge the same prices to both the insurance companies and individuals paying in cash.

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The problem with your health care is it is linked to the market.
The whole thing is a money making engine.
What is needed is an altruistic service where everybody pays for the good of everybody so that health care is free to all at the point of need.
A National Health System if you like.
If my family had to pay for every injury and illness we've had we would be homeless.

I disagree. You pay heavily for your National Health System in taxes. There really is no such thing as "free."

The question is who pays for it, and how is it rationed? And it will be rationed either by market forces or by other means. If the market is not allowed to determine how much healthcare will be available and what it will cost than other forces will do that. If the government will not adequately pay doctors or pharmaceutical companies, doctors and drugs will become scarce. In no case will they ever be in unlimited supply. So some rationing is inevitable. The market does this by price. Under national healthcare it's the government's decision what to provide or not to provide (based ultimately on the government's budget) and/or the public's willingness to stand in line or wait long periods of time for appointments that rations supplies.

The market system of course assumes someone will make a profit. So does the National Health Care System because at a minimum doctors and administrators will make a salary.

But profit is not a dirty word, at least I don't think so. It is the need to make a profit that tends to cause prices to go down, not up in a competitive market. The fact that there is no profit making what no one can afford, and plenty of competitors to provide lower cost items is what keeps prices at a reasonable level in just about every area of the economy from computers to groceries, to fuel.

The areas where this breaks down come in several types: monopolies (which simply must be regulated); areas of asymmetrical information (like investments); and areas where the person receiving the goods is divorced from the expense of paying for them by third parties.

Right now the U.S. healthcare system is a system in which the patient's decisions about healthcare are almost entirely divorced from the cost of that healthcare. Either insurance or Medicare/Medicaid pays for so much of the service the patient is cost indifferent, or he has no insurance and no real ability to pay for any services at all because the cost to the uninsured has been raised so high to provide artificial discounts to insurance companies. Thus the patient is unwilling to make hard choices about what healthcare is actually necessary.
With the patient divorced from the economic cost of his choices, it's no wonder health costs are soaring.

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At risk of sounding *gasp* conservative, which I am fiscally, the problem with healthcare is that it's divorced from the market.

We are talking about emergency services here. You are a fool if you think you can shop around during a medical emergency, however, Hanusz-Rajkowski could have done just that since his injury wasn't life-threatening.

My local clinic (a Minute Clinic inside of a CVS Pharmacy), is staffed by Nurse Practitioners & would have charged him a small fraction of the ER's bill, $80 to $135 tops. There are your damned market forces.

I agree that emergency services are a special case because the patient can't shop around. However, don't you think it's possible to regulate emergency services without divorcing the entire healthcare system from market forces?