Wednesday, April 10, 2013

Why I remain skeptical about fully private health care

Austin Frakt:

But the problem here is far worse than that. A shockingly large proportion of hospitals could not even report a price when asked. That’s not true of very many other industries. Typically, when someone is ready to buy, someone else is prepared to offer a quote. Not being able to produce one is a very unusual market feature.
 
So not only do you have the problems of trying to comparison shop when the seller has an incentive to make the price hard to find.  You actually have to take a leap of faith and hope that the final price is reasonable -- a gamble that it is hard to imagine doing with other goods and services of the same price point as a hip replacement (the example Frakt was talking about above).

Would you drive a car off the lot in hopes that it was cheaper than expected? 

And how do you apply market pressure when you can't actually use competition to select prices? 

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