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Read the rules in the OP before posting, please.In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. |
On January 03 2014 22:47 Danglars wrote:Show nested quote +On January 03 2014 21:29 Gorsameth wrote:On January 03 2014 21:08 Danglars wrote:On January 03 2014 19:01 Wegandi wrote:
Missing from this entire argument is the fact that the US Healthcare system is this mangled garbage of a system of socialism and fascism. Then, the critics of such system label this abomination, a 'market system', to which I can only imagine their definition to be 'money passes from one party to another', or some other vagaries. Then there are the reactionaries, who defend this abomination with the same tortured argument of it being a 'market'. Between these two factions I can only shake my head in disbelief. I am sure the AMA, FDA, Medicare, SCHIP, Medicaid, Tri-care, VA, and the trillions of dollars of Government-money funneling into the system means relatively little...it's all those insurance companies fault! The fact is, the insurance industry is partly to blame for their lobbying to crush competition via writs and regulation and mass subsidy, and the other side of the equation being Government mandates and outlawing of contractual arrangements between parties (especially re: insurance pooling, list of conditions that all policies must have, etc. etc.).
There are also a ton of other causes such as the Government outlawing importation of drugs especially generic. Which is to say, those making the argument we have some 'free market' in healthcare to shout down market proponents of change, is laughable, just as much are the 'market' reactionaries who actually think we have some semblance of 'market' healthcare, to which I can only laugh just as much. The foreplay these two groups constantly interchange only obfuscates the real heart of the issue.
Our healthcare 'care' is very good, it is the cost which is the problem, a problem which can only be solved by understanding the causes, and they aren't boiled down to 'greed' or 'this is the market price!'. Of course, there are those who do understand the cause of the prices we currently see and defend those causes (AMA, licensures, FDA, Medicaid/Medicare/Regulatory State/etc.), but then whine about the prices, or use it to push for even more socializing of the hideous system we have to endure. The latter group knows who they are. On January 03 2014 19:41 IgnE wrote:
You live in a fantasy land if you think healthcare could ever operate under some kind of radical laissez faire market. It is a radical idea to let people know how much their procedure will cost; we need to banish the thought from our minds. It is a radical idea to let people choose their health insurance for their time of life and situations in life. It is better to remain ignorant and let these wizards of smart tell us how much it should cost actually just banish greed and make it free! We've seen clearly the masses are too dumb to choose it for themselves, they must be forced into the right choices. Freedom is overrated. Yes i know your being sarcastic but yes, people are sometimes to dumb to choose for themselves. Young people thinking they dont need to cover cancer cause its 'no big deal' and then they get it, cant pay for it and are fucked while being society has to pay for them. Now ofc there are limits and degrees to this but as has been argued about months ago a lot of people have no idea what they do or do not need insurance for. I give you credit for coming out and stating it openly, the fundamental premise for centrally-controlled anything. Sometimes, or a lot of, people are too dumb to choose for themselves so a benevolent nanny-state needs to come in and choose for you. Krauthammer laid his finger on that not too long ago either Show nested quote +You want a catastrophic plan which is very rational, but Jay Carney is saying, you know, 'you're too stupid to understand what you want.' Once you eliminate the market response, which is a lot of people decide I know what I want better than the bureaucrat and they're eliminating this. That's the essence of what's happening and that's why it's not going to work. sourceIt's the age old problem ... you put it in the hands of the bureaucrat and not the individual and you simultaneously set up a perverse system. The bureaucrat responds to what is politically advantageous for him and his masters because he is not an infallible angel. You have fallible men governing fallible men until you find these angels who will organize society on our behalf.
Ofc its not without its issues but it also comes back to my opinion that the nature of the US political system is deeply flawed. Your massive lobby system and the nature of campaigning and local election for the house means that there is less accountability and more 'bribery' then I find acceptable for a political system.
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The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers
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On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers
And customers have only very indirect ways of judging the products. One of the important facets of markets is that consumers can at least somewhat judge how well the products satisfy their needs. In healthcare the situation is pretty poor in regards of customers being able to judge the products.
The best example of that is how effective treatment/doctor (satisfying customers actual preferences) is ignored while customer uses instinctive heuristics to pick pleasant/feel-good solutions exactly because he has no way of determining which product will satisfy his actual needs.
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On January 03 2014 22:47 Danglars wrote:Show nested quote +On January 03 2014 21:29 Gorsameth wrote:On January 03 2014 21:08 Danglars wrote:On January 03 2014 19:01 Wegandi wrote:
Missing from this entire argument is the fact that the US Healthcare system is this mangled garbage of a system of socialism and fascism. Then, the critics of such system label this abomination, a 'market system', to which I can only imagine their definition to be 'money passes from one party to another', or some other vagaries. Then there are the reactionaries, who defend this abomination with the same tortured argument of it being a 'market'. Between these two factions I can only shake my head in disbelief. I am sure the AMA, FDA, Medicare, SCHIP, Medicaid, Tri-care, VA, and the trillions of dollars of Government-money funneling into the system means relatively little...it's all those insurance companies fault! The fact is, the insurance industry is partly to blame for their lobbying to crush competition via writs and regulation and mass subsidy, and the other side of the equation being Government mandates and outlawing of contractual arrangements between parties (especially re: insurance pooling, list of conditions that all policies must have, etc. etc.).
There are also a ton of other causes such as the Government outlawing importation of drugs especially generic. Which is to say, those making the argument we have some 'free market' in healthcare to shout down market proponents of change, is laughable, just as much are the 'market' reactionaries who actually think we have some semblance of 'market' healthcare, to which I can only laugh just as much. The foreplay these two groups constantly interchange only obfuscates the real heart of the issue.
Our healthcare 'care' is very good, it is the cost which is the problem, a problem which can only be solved by understanding the causes, and they aren't boiled down to 'greed' or 'this is the market price!'. Of course, there are those who do understand the cause of the prices we currently see and defend those causes (AMA, licensures, FDA, Medicaid/Medicare/Regulatory State/etc.), but then whine about the prices, or use it to push for even more socializing of the hideous system we have to endure. The latter group knows who they are. On January 03 2014 19:41 IgnE wrote:
You live in a fantasy land if you think healthcare could ever operate under some kind of radical laissez faire market. It is a radical idea to let people know how much their procedure will cost; we need to banish the thought from our minds. It is a radical idea to let people choose their health insurance for their time of life and situations in life. It is better to remain ignorant and let these wizards of smart tell us how much it should cost actually just banish greed and make it free! We've seen clearly the masses are too dumb to choose it for themselves, they must be forced into the right choices. Freedom is overrated. Yes i know your being sarcastic but yes, people are sometimes to dumb to choose for themselves. Young people thinking they dont need to cover cancer cause its 'no big deal' and then they get it, cant pay for it and are fucked while being society has to pay for them. Now ofc there are limits and degrees to this but as has been argued about months ago a lot of people have no idea what they do or do not need insurance for. I give you credit for coming out and stating it openly, the fundamental premise for centrally-controlled anything. Sometimes, or a lot of, people are too dumb to choose for themselves so a benevolent nanny-state needs to come in and choose for you. Krauthammer laid his finger on that not too long ago either Show nested quote +You want a catastrophic plan which is very rational, but Jay Carney is saying, you know, 'you're too stupid to understand what you want.' Once you eliminate the market response, which is a lot of people decide I know what I want better than the bureaucrat and they're eliminating this. That's the essence of what's happening and that's why it's not going to work. sourceIt's the age old problem ... you put it in the hands of the bureaucrat and not the individual and you simultaneously set up a perverse system. The bureaucrat responds to what is politically advantageous for him and his masters because he is not an infallible angel. You have fallible men governing fallible men until you find these angels who will organize society on our behalf.
And yet it can work well. You are living in black-and-white illusion. You try to paint everyone in those systems as bureaucrats, thus stretching the meaning of that word beyond reasonable use. There is difference between professional organizations, scientific organizations and state bureaucrats. Well setup system relies on bureaucrats as little as possible. As much of the system should be set up by experts, and they actually know better than you do. The rest of the system should be set up based on society's demand. Bureaucrats should have as little power as possible and only as much as necessary for the system to work. In reality they of course have more power than that and keeping them down is constant struggle, but that does not negate the fact that those systems still work if there is enough work put in making them function.
Krauthammer, isn't that the guy that had once interview with John Stewart and showed he is prime example of what KwarK described in the post starting this discussion ? He has absolutely no idea about anything outside US and was just making shit up, not very good for someone trying to publicly discuss the issue.
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The contours of the healthcare market empower providers on almost every front compared to consumers.
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On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers
1 should be at least medium, since insurers have a lot of bargaining power.
2 varies by service and regulations.
4 varies by service and regulations.
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On January 04 2014 01:44 JonnyBNoHo wrote:Show nested quote +On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers 1 should be at least medium, since insurers have a lot of bargaining power. 2 varies by service and regulations. 4 varies by service and regulations.
I agree, increasing regulation is a good way to mitigate some of these factors. 
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Canada11425 Posts
Also public healthcare is not synonymous with centrally planned public healthcare by the public healthcare. I think in this way, the Canadian system is a better parallel due to US's value on State's rights. Our fathers of Confederation planned for a much more centrally controlled government in reaction to the blown apart States during the Civil War, but we wound up pretty decentralized just the same.
At the federal level you have the Health Canada Act which lays out the guidelines of the minimum requirements that that provinces must meet.
5 Criteria
+ Show Spoiler +
Public administration: each provincial health care insurance plan must be administered on a non-profit basis by a public authority, which is accountable to the provincial government for its financial transactions.
Comprehensiveness: provincial health care insurance plans must cover all “insured health services” (hospital care, physician services and medically required surgical dental procedures which can be properly carried out only in a hospital).
Universality: all residents in the province must have access to public health care insurance and insured health services on uniform terms and conditions.
Portability: provinces and territories must cover insured health services provided to their citizens while they are temporarily absent from their province of residence or from Canada.
Accessibility: insured persons must have reasonable and uniform access to insured health services, free of financial or other barriers. This condition is emphasized by two provisions of the Act which specifically discourage financial contributions by patients, either through user charges or extra-billing, for services covered under provincial health care insurance plans.(6)
And because provincial governments gave over a lot of their taxation power years ago, the federal government transfers money to the provinces. But it does not run day to day operations- that would be far too inefficient as Canada (similar to the States) is super spread out and regionally diverse.
So it is the provinces that actually have control on how the healthcare is delivered, but it must meet the Canada Health Act if they want the funding. But much of the real decisions are actually made at the regional level
The major distinction is publically funded and for the must part, privately delivered.
Two major branches:
I) Public funded-
1) Public Delivery- Public Health, Provincial psychiatric institutions, Home Care in some provinces
2) Private Not-for-Profit Delivery- Most hospitals, addiction treatment
3) Private For-Profit Delivery- Primary health care physicians, Ancillary services in hospitals (laundry services, meal prep & maintenance), Labs & diagnostic services in most provinces, some hospitals
II) Privately funded-
1) Public Delivery- Enhanced non-medical (private room) & medical (eg fibreglass cast) goods and services in a publicly owned hospital
2) Private Not-for Profit Delivery- Some home care and nursing homes in some provinces
3) Private For-Profit Delivery- Cosmetic surgery, long-term care, extended health care benefits such as prescription drugs, dental care and eye care in some provinces, some MRI and CT scan clinics, some surgery clinics
http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb0552-e.htm
The point is not that this is a perfect system, but I think it is a system that is at least comparably applicable to the American situation (ignoring American exceptionalism that makes everything inapplicable.) But when people say government is inherently inefficient, I suspect what they actually tend to mean is the federal government is inherently inefficient- unless they are of the libertarian into anarcho-capitalist brand. But if the federal government's role was bloc transfers and criteria to meet to get those bloc transfers, then doesn't that fulfill the rather common American desire to keep State control over most things including healthcare?
Furthermore as it is the doctor who handles insurance claims against the provincial insurer, it generally cuts out government bureaucrats from deciding whether you get funded or not.
It's too simplistic to say that public healthcare is inherently inefficient when there is such a multitude of ways to deliver healthcare while funding it publicly (and privately.)
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On January 04 2014 01:56 TheFish7 wrote:Show nested quote +On January 04 2014 01:44 JonnyBNoHo wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers 1 should be at least medium, since insurers have a lot of bargaining power. 2 varies by service and regulations. 4 varies by service and regulations. I agree, increasing regulation is a good way to mitigate some of these factors.
It depends
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On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers
They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true.
Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition.
They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself.
We have like 40+ insurance companies so again that increases competition and consumer power.
Now the policy had some of the following effects:
This year thr costs for insurance went down for most people but it'll probably rise again in the future.
Insurance companies are looking a lot more at the waste which occurs in the sector.
For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well.
There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though.
I'm sorry if my post has a bad layout and all but I'm typing it on my phone.
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The Dutch system is particularly admirable, thanks for sharing.
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On January 04 2014 02:25 RvB wrote:Show nested quote +On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone.
I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry).
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On January 04 2014 04:33 TheFish7 wrote:Show nested quote +On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry).
I'm a little confused. You seem to be equating healthcare insurance with healthcare.
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On January 04 2014 04:41 JonnyBNoHo wrote:Show nested quote +On January 04 2014 04:33 TheFish7 wrote:On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry). I'm a little confused. You seem to be equating healthcare insurance with healthcare.
First post was applying the principals of measuring market competitiveness to healthcare, second was applying them to insurance.
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On January 04 2014 04:51 TheFish7 wrote:Show nested quote +On January 04 2014 04:41 JonnyBNoHo wrote:On January 04 2014 04:33 TheFish7 wrote:On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry). I'm a little confused. You seem to be equating healthcare insurance with healthcare. First post was applying the principals of measuring market competitiveness to healthcare, second was applying them to insurance.
OK, but a follow up - shouldn't, in your first post, the bargaining power of buyers be high then? Few insurance companies and government agencies buying healthcare from many smaller healthcare suppliers?
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On January 04 2014 04:58 JonnyBNoHo wrote:Show nested quote +On January 04 2014 04:51 TheFish7 wrote:On January 04 2014 04:41 JonnyBNoHo wrote:On January 04 2014 04:33 TheFish7 wrote:On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry). I'm a little confused. You seem to be equating healthcare insurance with healthcare. First post was applying the principals of measuring market competitiveness to healthcare, second was applying them to insurance. OK, but a follow up - shouldn't, in your first post, the bargaining power of buyers be high then? Few insurance companies and government agencies buying healthcare from many smaller healthcare suppliers?
I am assuming the buyers are the end users in a pure market system, government and insurance doesn't necessarily need to be brought into the equation in that case. Government and insurance co.s do have higher bargaining power than individuals
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On January 04 2014 05:09 TheFish7 wrote:Show nested quote +On January 04 2014 04:58 JonnyBNoHo wrote:On January 04 2014 04:51 TheFish7 wrote:On January 04 2014 04:41 JonnyBNoHo wrote:On January 04 2014 04:33 TheFish7 wrote:On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry). I'm a little confused. You seem to be equating healthcare insurance with healthcare. First post was applying the principals of measuring market competitiveness to healthcare, second was applying them to insurance. OK, but a follow up - shouldn't, in your first post, the bargaining power of buyers be high then? Few insurance companies and government agencies buying healthcare from many smaller healthcare suppliers? I am assuming the buyers are the end users in a pure market system, government and insurance doesn't necessarily need to be brought into the equation in that case. Government and insurance co.s do have higher bargaining power than individuals
I don't think that's a correct assumption then. The market based alternatives I've heard split routine healthcare from large atypical purchases with the former bought by individuals and the latter by insurers.
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On January 04 2014 04:58 JonnyBNoHo wrote:Show nested quote +On January 04 2014 04:51 TheFish7 wrote:On January 04 2014 04:41 JonnyBNoHo wrote:On January 04 2014 04:33 TheFish7 wrote:On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry). I'm a little confused. You seem to be equating healthcare insurance with healthcare. First post was applying the principals of measuring market competitiveness to healthcare, second was applying them to insurance. OK, but a follow up - shouldn't, in your first post, the bargaining power of buyers be high then? Few insurance companies and government agencies buying healthcare from many smaller healthcare suppliers?
There aren't many smaller healthcare suppliers, there has been a ton of consolidation in this sector over the last couple decades. I posted an article discussing this earlier in the week - hospitals have so much market power that they basically set any price they want. Insurance companies are generally able to negotiate better rates than individuals, but these rates are still much higher than medicare rates, which themselves are suppose to be based on the cost of providing care (including overhead) but instead are just set at whatever health provider lobbyists can convince the government to make them.
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On January 04 2014 02:34 farvacola wrote:
The Dutch system is particularly admirable, thanks for sharing.
These healthcare discussions are bizarre reading from a dutch perspective. I'm a starter in the dutch market, I pay a healthcare coverage of 86 euros a month of which I get 60ish back in the form of a subsidy. My own risk is 360 euros (any GP visits fall outside your own risk and are free), which means I'll never pay over 700 euros over the course of the year. The dutch government pays less than 2/3rds of what the US govt pays in terms of GDP. You then come to this thread and read about the horrors of government regulated healthcare and the communist nature of 'socialist medicine'.
The problem with the free market ideologues is that they fail to see at what point free markets fail to have the desired results. With the degrees in deregulation we've seen across the western world that question does not really seem like a theoretical fact when it can be established empirically pretty well.
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On January 04 2014 05:14 Mercy13 wrote:Show nested quote +On January 04 2014 04:58 JonnyBNoHo wrote:On January 04 2014 04:51 TheFish7 wrote:On January 04 2014 04:41 JonnyBNoHo wrote:On January 04 2014 04:33 TheFish7 wrote:On January 04 2014 02:25 RvB wrote:On January 03 2014 23:47 TheFish7 wrote:
The reason healthcare doesn't work well in a market system can be explained using the very basic Porter's 5 forces model. The healthcare industry is an extremely high profit industry when subjected to a market system because it has the following attributes:
1. Low bargaining power of buyers (there are many potential buyers seeking to make occasional purchases and few suppliers)
2. High barriers to entry into the market (Trying to build a start-up healthcare or insurance company is next to impossible, so existing players do not fear competition)
3. Few substitute products (People must purchase healthcare at some point, or potentially die early, you cannot substitute with cheaper alternative medicines when diagnosed with a major illness)
4. Low rivalry among competitors
All these things add up to high costs for customers They introduced a bit more market in the Dutch healthcare system and a lot kf your points aren't true. Everyone is required to have a basic insurance which has a couple of requirements by law and the insurance company can add or remove extra stuff. Then you can buy extra insurance if you want and they can diversify in the things you'll get for it and the deductable. This and the overall frustration over the high costs for health care do give consumers a lot of power and increases competition. They also start competing jn other areas than just their product. You can get a cheapwr insurance for example if you let the insurance company decide where you'll get yoir care instead of choosing it yourself. We have like 40+ insurance companies so again that increases competition and consumer power. Now the policy had some of the following effects: This year thr costs for insurance went down for most people but it'll probably rise again in the future. Insurance companies are looking a lot more at the waste which occurs in the sector. For example they're now demandig from the hospitals to use cheaper medicines which work just as well. And they're going after fraud a lot more as well. There are some negative effects as well though like the basic insurance covering less than it used to and a hospital going bankrupt. Thr former would've probably happened anyway though. I'm sorry if my post has a bad layout and all but I'm typing it on my phone. I don't understand how any of these points refute the case I am making that the market system leads to higher healthcare costs. I was talking about the purchasing of healthcare itself in a theoretical perfect market. You are talking about insurance which is a separate part of the supply chain. Requiring people to purchase insurance is the opposite of a market solution. It is enforced competition which is something I'd advocate. Higher frustration from customers does little to change costs, because consumers in this industry have few access to substitute products. You have 40+ companies in a smaller market - that leading to lower costs reinforces my point that high barriers to entry and lower competition increase costs for the consumer. This is not the case in the US where you have a few major companies with a much bigger pool of potential customers. The nature of the insurance business is one where the more customers you have, the greater your diversification and the lower your costs. That is extremely counter-productive to increasing the number of companies competing for business (high barriers to entry). I'm a little confused. You seem to be equating healthcare insurance with healthcare. First post was applying the principals of measuring market competitiveness to healthcare, second was applying them to insurance. OK, but a follow up - shouldn't, in your first post, the bargaining power of buyers be high then? Few insurance companies and government agencies buying healthcare from many smaller healthcare suppliers? There aren't many smaller healthcare suppliers, there has been a ton of consolidation in this sector over the last couple decades. I posted an article discussing this earlier in the week - hospitals have so much market power that they basically set any price they want. Insurance companies are generally able to negotiate better rates than individuals, but these rates are still much higher than medicare rates, which themselves are suppose to be based on the cost of providing care (including overhead) but instead are just set at whatever health provider lobbyists can convince the government to make them.
But why do hospitals have so much market power? Why can't a big insurance co or a big government agency dictate a lower price?
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EPT
