Health Care and Prices

Kevin Drum is lauding the transparency an Oregon health insurance exchange which was initiated some apparently welcome price competition into a market for now standardized products.  My response was this:

I applaud any effort by this Administration and others to improve the transparency of pricing in the medical field.  I would have more confidence, though, if all of you folks were not pushing for 100% pre-paid medical plans that will essentially eliminate price-shopping by individuals, and in so doing effectively eliminate the enormous utility of prices.  Prices will soon be meaningful for one thing -- insurance -- in the health care field and absolutely meaningless for everything else in the field.

By the way, at the same time you are improving competition on price, you are eliminating by fiat all competition on features (e.g. what is covered, what deductible I want, etc).  This "success" is like the government mandating one single cell phone design, and then crowing how much easier shopping is for consumers because there is now only one choice.  A simple world for consumers is not necessarily a better world.  I am sure Medieval peasants had a very simple shopping experience as well.

  • John O.

    "Welcome to your Neighborhood Trabant Dealership," said no East German ever.

  • http://devilish-details.blogspot.com/ mesaeconoguy

    Kevin Dumb continues to set the leftist standard for economic stupidity.

    Clueless leftist assholes are actually quoting him on Facebook now, proving the easy access/easily wrong axiom, which is hilarious.

    Dumb thinks that artificial “exchanges” need to be created by government, in order to “enforce” competition prohibited by government.

    God, are regressives stupid.

    If I recall, Kevin Dumb also has a cat fetish, like another prominent economist…..

    http://dealbreaker.com/uploads/2011/04/Paul-Krugman-with-Cat.jpg

    I sense a paper here.

  • http://devilish-details.blogspot.com/ mesaeconoguy
  • norse

    I fondly remember laughing about how silly communist countries like Russia or China handled matters that are much better left to open markets. These days, I miss the unfettered capitalism I experienced when living in Shanghai... panta rei/how the mighty have fallen/... and all that.

  • DaveK

    I'm from Oregon, and after looking at the proposed rates, my fears have been confirmed. Sure, those rates are competetive between companies. What you don't see is the massive increase in premiums. I'm over 60, with a high deductible private plan for my wife and myself. Going just with the "bronze" plan (the so-called catastrophic coverage) I see they've proposed premiums that are somewhere around double what I currently pay. And for the extra premium, I get a drop in the deductible from around $7500 down to $5000. Other than that, coverage doesn't really change from what I now have.

    So, I'll get to pay an extra $5000 or so in premiums for that extra $2000 of benefits that in all likelihood I won't use. Sounds lots more "affordable" than what I now have (/sarc).

    The good news is that I can manage to avoid withdrawing from my IRA for a few years until we qualify for medicare. By doing that, I'll have pushed our "income" down to a level that allows significant subsidies.

    If you can't beat the system, do everything you can to use its rules to your benefit.

  • Rocky

    AMEN. Reading my mind on this one for sure.

  • Joe

    The biggest issue effecting transparency in healthcare is our third party payer system.This needs to be abolished and replaced with a system where the consumer pays directly for the healthcare goods and services that they purchase - including insurance.

  • Joe

    Now that I think about it, there is an even bigger problem with people thinking that healthcare, which are a series of goods and services provided by the labor of others, is a right. Those that consider healthcare a "right" should really think about what they are arguing for.

  • frankania

    why are my comments always cancelled? I live in Mexico where healthcare is cheap and good. You don't need to have insurance, even.

  • Harry

    You have hit the nail on the head, Coyote.

    Under Medicare, I buy a Cadillac supplemental plan that is cheap enough to pay annually, and the prescription plan that is the only one you can buy. Medicare actually requires me to see an Endocrinologist four times a year, because I have an insulin pump and need to know I am still a type I diabetic, so I can receive my infusion sets from Medtronic, the profiteering medical equipment company. I think they are worried that I will traffic on the black market in infusion sets, which they sell at approximate $35 each.

    Under this system, I have no incentive to economize with unneeded doctor visits, which surely would be fewer, since I have an internal medicine doctor whom I see routinely twice a year and more often if I am sick. He could tell Medicare I am still type I, but Medicare requires a specialist to run the pump.

    Meanwhile, if I am stupid, I will not notice that until around October I will hit the donut hole and the next vial of insulin is $125. I bet Medicare beneficiaries who do not hit the donut hole and have zero copays have zero idea how much Medicare spends on them.

  • marque2

    I have never seen any comments cancel led on this site - not even the extremely stupid ones.

  • skhpcola

    Then keep expecting Mexican mothers there so they can benefit from the fabulous healthcare system, instead of sending them here to pop out an anchor baby that can suck the vitality of our once-world-class healthcare and welfare systems. Your claim evokes memories of the myriad Canadians that defend their socialized healthcare system, yet are soundly repudiated by the busy hospitals along that shared border. Anecdotes don't equal proof.

  • frankania

    I am talking about PRIVATE, free-enterprise doctors and clinics, not a "system", and if you look at the southern US border, you WILL see many hospitals and clinics with gringos waiting for their turns.

    Even when I lived in PA, we would fly to Mexico for operations: cataract, D&C, all dental work, etc. because I had no medical insurance in the US, and prices were too high. We made a vacation out of it and saved money too.

    This is not a political nor philosophical comment; just informing people of a vibrant health market here, and how free enterprise and competition ALWAYS beats out big brother solutions.