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Necessary Healthcare - Supply and Demand

If the cost of cancer treatment goes up significantly, which of the following results?

  • Less people get cancer - supply and demand.

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If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?
 
If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?

These are all questions related to a “for profit” healthcare system.
 
These are all questions related to a “for profit” healthcare system.

I am obviously trying to prove a point here. There are those that argue that we need to make healthcare more subject to market forces. In a true fully functioning market, if the cost of chemo went up too much, the number of breast cancer sufferers would go down - supply and demand. Of course, we know that isn't the case. It's why every other developed nation recognizes that necessary healthcare is a market failure.
 
Obviously the same number of people would get cancer.

However, as costs go up they would be less likely to be diagnosed or treated, and so the reported totals would likely drop.

It's just a way that statistics tend to trick us.

Another example is how marijuana usage sometimes appears to go up significantly when it is made legal, but it is difficult to determine how much of this is people being more willing to admit they use marijuana, even though they used before and after the laws changed.

P.S. -

Market forces could work wonders on prescriptions drug costs, as we are shafted mightily on those in the U.S.
 
These are all questions related to a “for profit” healthcare system.
Imo the debate on this topic should be whether for profit healthcare drives costs up or down. I am of the opinion that if we opened it up to more free market principles the costs would go down not up.

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Imo the debate on this topic should be whether for profit healthcare drives costs up or down. I am of the opinion that if we opened it up to more free market principles the costs would go down not up.

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I dont see where that happens
 
If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?

Solve simple poverty so every adult can afford some kind of coverage or make payments on a longitudinal basis; that increase in market participation can spread out more of the costs.
 
Where has it been implemented?

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So you want a plan that has never been implemented anywhere to be experimented on with the American healthcare system?
 
So you want a plan that has never been implemented anywhere to be experimented on with the American healthcare system?
No i was asking you a question. You cpaimed it does not work. I was looking for examples where it failed.

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No i was asking you a question. You cpaimed it does not work. I was looking for examples where it failed.

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I am looking for examples of where it has succeeded
 
Imo the debate on this topic should be whether for profit healthcare drives costs up or down. I am of the opinion that if we opened it up to more free market principles the costs would go down not up.

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Would you reduce your cost to a cancer patient when they have the choice of paying what ever you told them to pay you or die a horrible death?
 
I have seen some bizarre threads, but this one takes it for the last week at least.
 
If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?

The point of talking about "markets" is really to get at the question of "who makes choices." You have a bunch of examples of instances where people make choices, and you've reduced them all to binary yes/no choices. But in reality people make all kinds of decisions about housing (rent vs buy, here vs there, alone vs with roommates, and on and on) and about any prospective purchase.

In the same vein, there are lots of choices that need to be made when it comes to health care. Someone is going to have make choices in lots of instances. Between potential treatment courses, providers, care settings, etc. There are value judgments that need to be made, considerations of relative expense and cost vs. benefit, and personal preference.

It's not absurd to ask and discuss who should make those decisions, when, and how. There are things that make the health care market unique, certainly, but it's not so fundamentally different that it's impossible in principle for people to make decisions or for any market dynamics at all to occur.
 
Would you reduce your cost to a cancer patient when they have the choice of paying what ever you told them to pay you or die a horrible death?
I would reduce my cost to compete with the doctor nextdoor

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If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?

One problem I see with a for-profit healthcare system is that the consumers are captive - they have no choice but to consume, or they will be sick and/or die.

Another problem is that people being sick or dying unnecessarily is acceptable in such a system.

The first issue means that prices can rise far too high and people will still find a way to pay them, even if they destitute themselves.
 
I am obviously trying to prove a point here. There are those that argue that we need to make healthcare more subject to market forces. In a true fully functioning market, if the cost of chemo went up too much, the number of breast cancer sufferers would go down - supply and demand. Of course, we know that isn't the case. It's why every other developed nation recognizes that necessary healthcare is a market failure.

It isn't a case of supply and demand. Demand in this case is inelastic. Heavy regulation and restrictions make supply inelastic as well. Insurance shields the cost from consumers. The perfect storm for an expensive market.

So while it is improbable that demand can be modified much, by allowing suppliers of health care a free market, the ability to compete for that demand dollar, health care costs could be brought down. And when people rely on private or government insurance to cover the bill, they aren't usually concerned with how much it costs. Lasic eye surgery isn't usually covered by insurance; mostly people pay out of pocket. There are thousands of eye centers competing for that procedure. The cost has fallen greatly in recent years.
 
If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?

While there's almost certainly a floor to the cost independent of demand, generally the cost of supplies and labour plus a mark up of some variety commensurate to what a buyer will pay (which is considerable given the repercussions of serious ailments like cancer) yes, obviously there would be a relationship between the demand for cancer treatment as an input to supply/demand and the market price. It's certainly easy to imagine cancer treatment costing more in a set of circumstances where demand has multiplied several fold without commensurate increases in capacity.

Having said that, healthcare should obviously not be for profit for the following reasons:
#1: Demand is inelastic, and the audience is captive: Often you need healthcare or you die, or suffer serious and even permanent consequences. This is obviously readily exploitable for maximizing prices (see perverse incentives).
#2: Information asymmetries/deficits: People simply don't have the expertise and knowledge to make informed purchasing decisions on healthcare in most cases; market participants often have inadequate information, education and knowledge to make good decisions (at least on an unassisted basis) and there is almost certainly exploitable information asymmetry between the provider and purchaser.
#3: The existence of perverse incentives: These are obviously created by a for profit healthcare system, ranging from cutting costs in ways that are dangerous, harmful or otherwise averse to the patient, to prioritizing patients on the basis of their wealth and what they can pay, in more extreme cases gouging patients to provide immediate necessary treatment they need, etc... Competition is not necessarily a panacea, and even if it did eventually drum out the worst offenders, many would be harmed in the interim, while new underhanded operations emerge to replace them, and trusted providers become more expensive due to the premium associated with being reliable, etc...
 
Up until a few years ago we had three ambulance companies. Then one company got a contract with the city and the other two soon withdrew service. For while costs stayed about the same, but now costs are relatively high. It can cost $600 for a short trip to the emergency room, and a long trip can cost easily over a thousand. or even more. The company has no specific fee structure published, so it is impossible to calculate costs. Of course, no one would do that in an emergency, but lots of ambulance rides are non-emergency in nature. And private hospitals can still use a different ambulance company.

You should be able to call up an ambulance company and ask, how much per mile? And you should be able to get a straight answer.

My eye doctor charges $160 for an eye exam but only $80 if you have no insurance. I'm sure he does that to give people with no insurance a break. But that means the people paying insurance premiums pay somewhat more to cover that discount, because insurance companies don't pay for health care, their plan members do through premiums.

The health care system needs to be a lot more transparent in order for a competitive system to work; the following should be public record;

The doctors qualifications and education.
His/her liability record. Even cases settled before going to court.
How many patients he/she sees in a day. waiting times.
hourly rate; costs for common procedures.
where he/she has hospital privileges.
Often doctors who take Medicare/Medicaid patients hike their fees to insured and non-insured people alike to cover the difference.

When my wife was in management at a very large union health care plan, for several years her job was to negotiate costs for major life saving operations like organ transplants, cancer treatment, and other major medical problems. She would literally shop the nation; then she would play off one medical center against another to get the price down. It was amazing how flexible these people became, (both public and private hospitals, profit and non-profits) in order to get that business. And it was a business to them, all of them.

Sometimes it was cheaper to put a family member up in a hotel in a different city where the patient was being admitted for the operation, and pay their transportation costs.

We are no way set up for any kind of truly competitive system in the United States. Competition requires transparency. We do not have much of that. Your dentist probably won't even tell you what he/she charges for a filling. And the price will differ depending on who you are.
 
One problem I see with a for-profit healthcare system is that the consumers are captive - they have no choice but to consume, or they will be sick and/or die.

Another problem is that people being sick or dying unnecessarily is acceptable in such a system.

The first issue means that prices can rise far too high and people will still find a way to pay them, even if they destitute themselves.
Why isnt that the case with food and shelter? People have to have those things as well.

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What an odd poll. There is no correlation between the incidence of getting a cancer and the cost of treating such a cancer. There is however a strong reciproca correlation in most cancers of surviving cancer and the cost of treating such a cancer. There is also a reciprocal correlation between the expenditures through a public healthcare system in preventive medicine and the incidence of getting such targeted cancers.

Cheers.
Evilroddy.
 
I would reduce my cost to compete with the doctor nextdoor

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You are mid size market, there is doctor next door. So what do you do then?
 
It isn't a case of supply and demand. Demand in this case is inelastic. Heavy regulation and restrictions make supply inelastic as well. Insurance shields the cost from consumers. The perfect storm for an expensive market.

So while it is improbable that demand can be modified much, by allowing suppliers of health care a free market, the ability to compete for that demand dollar, health care costs could be brought down. And when people rely on private or government insurance to cover the bill, they aren't usually concerned with how much it costs. Lasic eye surgery isn't usually covered by insurance; mostly people pay out of pocket. There are thousands of eye centers competing for that procedure. The cost has fallen greatly in recent years.

Because Lasic eye surgery is a completely elective procedure. Moreover, Lasic eye surgery is in competition with just wearing glasses or contacts, which insurance often covers. Finally, you can easily travel to get Lasic surgery.

This is in sharp contrast to critical and catastrophic care, which is not elective, which there are typically not much cheaper options available, and which most people cannot reasonably travel to get it. For example, in many midsized markets, one health system controls the entire market. So you can't negotiate on cost with them, insurers can't even do it. Your choice is to either pay what they demand of you, or in many cases die a horrible death. That is why no country on earth wants our healthcare system. It's why no industrialized country on earth attempts a free market healthcare system. Necessary healthcare is the very definition of a market failure. If massive insurers with all their purchasing power, their ability to parse billing, and their ability to evaluate the effectiveness of treatments and procedures, cannot control costs, then why do you think you could? Routine care, which is what people point to as being overutilized, is only 7% of healthcare spending. It's the critical, chronic, and catastrophic care that is responsible for the bulk of our healthcare spending in this country. You could be in an accident, and spend 100k before you are conscious a few hours later. You could have a heart attack, and spend 200k before you leave the hospital the ambulance took you to. The first week after you were diagnosed with cancer, you would spend more than you would in a lifetime of routine care.

We are a fairly high income household. I would love for someone to show me how you could have a free market healthcare system that would control costs and everyone would have access to. If it were possible, I would prefer such a system. I just don't see how it's possible.
 
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If the price of houses go up too much, then less people buy a home and instead opt to live with their parents longer, share rent with someone and so on. If the price of a new car goes up too much, then less people buy a new car, and instead will continue to drive older ones, share a car and so on. If the price of a new TV goes up too much, you don't buy one, or you buy less of them. That is how it works with most goods and services.

With that in mind, is there any relationship at all between the cost of cancer treatment and the number of people afflicted with cancer? Is there any relationship at all with the cost of a heart bypass, and the number of people with a coronary blockage? Is there any relationship between the cost of insulin, and the number of diabetics?

Makes no sense, but it is early in the day for me. Why would the expense of a drug cause cancer?
Wouldn't a diagnosis necessitate the treatment?
 
Makes no sense, but it is early in the day for me. Why would the expense of a drug cause cancer?
Wouldn't a diagnosis necessitate the treatment?

That is the point. If I can go up from charging you 5k a month for cancer treatment to 50k a month for cancer treatment, and your choice is to pay what I demand of you or die a horrible death, then obviously healthcare is different than other products and services.
 
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