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How to Charge $546 for Six Liters of Saltwater

nytimes.com

171–180 of 191 posts

Re: How to Charge $546 for Six Liters of Saltwater

#171
post #141
post #136

Earlier quoted context omitted.

The article focuses on what can hardly be considered a complicated good: salt water. Medical grade saline is highly regulated, and must be one of the most commodity products that exist in the country today. (The article takes pains to establish this.) It takes minimal effort to understand what it is or to compare prices. And yet, as the article says, there is no functioning market for it. For something like "set this…

But the need is still fundamentally inelastic. You're seriously ill from food poisoning and you've lost a lot of fluids. The ER nurse is about to stick an IV into you and wave your hand weakly and say "Wait, how much is that IV fluid you're putting in there?" The nurse says $500. Option 1) You say "no way, I can't pay that." The nurse shrugs and says "well, that's what it costs for IV solution here." Option 2) You sa…

That depends on what the rational person can afford. When they're thinking "500$ means I don't make my house or car payment this month and I'm not certain how I'll feed my family", they may say "I'll take the 1$ bag", consequences-be-damned. And they're still a "rational" person.

Re: How to Charge $546 for Six Liters of Saltwater

#172
post #135

I have two active kids and am reasonably active myself. We have probably received medical treatment a dozen times in the last year, a combination of walk-in clinics, personal physicians and emergency room visits, depending on the circumstances. During these visits, the staff have used equipment, given procedures and prescribed medication and have rarely, if ever, inquired about my thoughts on treatment. When my son j…

A few things, specifically about the US health care system:

1) Unlike medical procedures, for dental procedures it's pretty easy to get price quotes from multiple dentists: they will tell you their sticker price if asked. They will also give you the procedure code so you can ask your dental insurance (if any) to what extent that's covered so you'll know what the actual price to you is. People will in fact comparison-shop for major dental procedures, based on cost, dentist reputation, etc.

2) The situation with emergency or time-sensitive procedures (pneumonia, tetanus shot, cut inside mouth) and scheduled non-emergency ones (hip replacement, say, or laser eye surgery) is a priori quite different. It is in fact possible to sanely price-shop for hip replacements if people are willing to tell you prices and there is reputational data available. Unfortunately the medical establishment works hard to prevent both. Laser eye surgery is a particularly interesting case, because there _is_ freely available price information there; you may want to look at what's happened to its price over time. Learning as much about such a procedure as people tend to know about buying cars is not actually all that hard: people don't know that much about cars and there really isn't that much to know about some of the fairly standardized scheduled procedures.

3) People do in fact do the "90% functionality at much lower cost is just fine" thing all the time, with glasses (e.g. buying reading glasses at CVS instead of getting a prescription pair), dental procedures, and some scheduled medical procedures. You're right that "50% less effective treatment at 50% of the cost" doesn't happen much, though. Instead you get 100% less effective lack of treatment at 0% of the cost....

4) Since you brought up baby deliveries.... Sorry, pet peeve. If a hospital is charging you $20000 for a low-risk birth with no complications (which they definitely do!), that's an excellent indicator of how broken the system is. If you shop around for how much that sort of thing costs with people who specialize in low-risk births (birth centers, midwives), you will discover that the typical price for birth plus prenatal visits with no complications in the US is in the $3-5k range. Of course such a setup will not do the various wholly unnecessary things that will be done in a typical hospital birth setting, nor will it be subject to typical hospital billing practices.

5) A good bit of care in the US is end-of-life care, where it is in fact quite possible to make price/time tradeoffs to some extent, as well as comfort/time ones (e.g. hospice vs aggressive cancer treatment that might prolong life for a few months) and people who are in a position to make that choice can in fact make it in an informed way.

In practice, what we call "medicine" is a bunch of separate services that have totally different economics, often being bundled together with completely opaque pricing put on top. For some of them, there is lack of informed customers and lack of choice in outcomes, as you say. For others one or both are present. And even today some parts of "medicine" (e.g. scheduled dental cleanings) work quite different from other parts (e.g. pediatric well-child checkups; try to get a price quote from a doctor for one of these!) for no particularly good reasons that I can see.

The "right" solution to this problem is unclear to me, unfortunately, because as you point out there is a fair amount of emergency medicine where a free market cannot possibly operate. A good example of such a thing is the total lack of any possibility of a free market in emergency ambulance transport, from the patient's point of view. We should stop our attempts at a fake free market in those areas, but we should also try to create actual free markets in medicine where possible. And for quite a few things I believe it is in fact possible.

Re: How to Charge $546 for Six Liters of Saltwater

#173
post #86

Many in this thread are claiming that price fixing wouldn't occur in a "truly free" market. This is misty-eyed naivety. In a completely deregulated free market, it is even more in the hospitals' interest to form a price-fixing cartel. Any new player in the market trying to set reasonable market prices could be excluded through market pressure tactics (eg, tell distributors don't sell to them or our cartel will no lon…

Many people think "free markets" when they should think "competitive markets".

Exactly this. All markets are more or less "free" and the question is how to structure markets to deliver the greatest benefit.

Absolutists about free markets are at least being purposefully obtuse if they don't admit that they think vendors should win every advantage from irrationality, inelasticity, and information asymmetry, plus every transitory advantage as markets get dominated for a supposedly temporary interval and for supposedly salutary purposes.

The above, combined with a bias toward investor-owned enterprises over co-ops, customer-owned, and nonprofit enterprises is what brought us to a place where market liberalization only hardens the position of incumbents.

Re: How to Charge $546 for Six Liters of Saltwater

#174
post #68

Earlier quoted context omitted.

Cell phones are a great example of the terrible results from supposedly free markets. Plans are deliberately priced to be confusing to compare prices; plans are frequently updated to cause people to be stuck in win-optimal contracts; consumers are gouged on some items (see bizarre cost of sms in UK); and companies collude to defeat market mechanisms - see the use of area codes in auction bids as a method of communica…

Would this be the same free market that put a Cray 2-class computer in my pocket for $85/month?

What if structural separation and a wholesale bandwidth model could reduce that price? What if smart radios and eliminating bandwidth "ownership" could reduce it even more?

Those are examples of designed markets, even though there are accompanying technologies, as is the current mobile telephony business. Now guess who stands in the way of implementing those changes?

Re: How to Charge $546 for Six Liters of Saltwater

#175
And what about these web sites for thousands of dollars? I mean, if I can throw something together in 30 minutes using MS Paint and Wordpad, how ridiculous is it that a designer charges more than 20 USD per hour?

Ah, I see. It's only en vogue to complain if I don't know anything at all about the constraints of the domain and am pulling stuff out of my ass. My bad.

Re: How to Charge $546 for Six Liters of Saltwater

#176

Earlier quoted context omitted.

You are severely misrepresenting that study as it is about the backgrounds of people who say they forgo healthcare on money grounds and pointing out that there are other factors other than whether someone can actually afford healthcare that affect whether people think they can afford healthcare. It also appears to not look at ethnicity at all in that study. It is basically saying that it isn't enough to make healthca…

forget ethnicity for a moment (there is a separate biological argument that is not sociological in nature), although we know what 'socio-economic' is a codeword for. The point is that posters above are saying things like "There is no discrimination in the public service." I can say for sure there is no way that is possible. If there were no discrimination, then there would be no reason why people are systematically a…

forget ethnicity for a moment (there is a separate biological argument that is not sociological in nature), although we know what 'socio-economic' is a codeword for. The point is that posters above are saying things like "There is no discrimination in the public service."

You started with a comment about killing off 90% to achieve ethnic homogeneity and when pressed on the point said that the French health system can't possibly manage to treat poor people of Arabic extraction. Forgetting ethnicity for a moment would seem to be to remove the prior context that people were replying to.

Also, you then after saying to forget ethnicity start saying that we know socio-economic is a codeword, presumably meaning that you have no intention of leaving the subject of ethnicity.

Also you are claiming systematic avoidance of the French healthcare system and that it has failed in it's attempt to treat people fairly. Now, it obviously is not perfect, nothing is, however to paint that study as evidence of systematic avoidance and failure, rather than room for improvement seems churlish.

Failure is when you spend the most money, but still rank thirty eighth, rather than when you are the fourth biggest spender and rank first.

Personally I just think that you are an ideologue on this. Show me a country that gets good results from unregulated private medical care plus charities. Who builds the network of A&E departments in that case?

Re: How to Charge $546 for Six Liters of Saltwater

#177
post #117

Earlier quoted context omitted.

The sentence you're objecting to isn't claiming that US healthcare is a completely free market (which, as you note, would be an unbelievably ignorant view to hold... literally unbelievably). It's claiming that certain failures of the fairly-free US system already illustrate the sorts of failures that would plague a free(er) system. You may or may not agree with that conclusion, but it's a far more plausible view for…

"US healthcare system is in fact a perfect demonstration of the dangers of a completely free market" The commenter actually says exactly that...that the US healthcare system is (in fact) a perfect demonstration of a completely free market.

OP:

"perfect demonstration of the dangers of a completely free market"

You:

"perfect demonstration of a completely free market"

Do you see where the difference is?

Re: How to Charge $546 for Six Liters of Saltwater

#178

Earlier quoted context omitted.

You are selectively re-arranging my words to create a different meaning. At no point did I say the US healthcare system was completely free.

Hint: if a half-dozen different people misinterpret your point, it's not them, it's you.

On the contrary, if a half-dozen different people don't misinterpret your point on a widely-read Internet forum, you probably didn't say anything worthwhile.

Re: How to Charge $546 for Six Liters of Saltwater

#179
post #4

Earlier quoted context omitted.

at least all our patient data will be private. If we keep all of our private information in the hands of the HMOs and other corporations, the NSA might install a backdoor.

It's funny, because you seem to think that health care professionals, with their myriad Excel spreadsheets and mammoth stacks of Steelcase® file cabinets brimming with rainbow color-coordinated folders containing paper files seem to know the first thing about information security. These are non-technical people, who went to school mostly for biology and chemistry, or for the lowly clerks, and secretaries in your doct…

You come down quite hard on healthcare professionals, with the comments about biology and chemistry being non-technical. Your comments about doctors also seem unrepresentative of what a modern doctor must actually know and accomplish in order to be a practicing physician.

Re: How to Charge $546 for Six Liters of Saltwater

#180
post #137
post #135

I have two active kids and am reasonably active myself. We have probably received medical treatment a dozen times in the last year, a combination of walk-in clinics, personal physicians and emergency room visits, depending on the circumstances. During these visits, the staff have used equipment, given procedures and prescribed medication and have rarely, if ever, inquired about my thoughts on treatment. When my son j…

"How does one legitimately comparison shop for a baby delivery?" How did you and your spouse decide on an ob/gyn when you were expecting your kids? How did you decide on a pediatrician after they were born? Would you be able to rate your experience with both/either after the fact (ie, did the experience live up to the reasons you chose them?)? Would it be possible to use such ratings along with costs to at least crea…

My wife and I did pick the doctor (of 4 pediatricians) that was recommended to us by friends that had a good care and delivery experience.

BUT ... there is only one hospital here and all of the doctors are part of the same system. So, although we could "comparison shop" for our physician, this had no effect on what we would (potentially) pay.

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