The American health care system is socialism without a central plan, and capitalism without markets or prices. In America, the health care system is disturbingly expensive, and sucking up alarming and rapidly increasing amounts of taxpayer money. America has the best health care system in the world for the very rich and the very poor, but for those in between, not so good. For the non working and part time working affluent (me) it is woefully bad.
Bryan Caplan points to Singapore: Health care that is cheap, and, to best of my knowledge, very good – even the poor in Singapore are guaranteed reasonable care, yet the system costs the government very little.
Because there are no prices in the American health care system, there is no competition, so costs rise to absurd and astronomical heights.
Stuff that is offered on a fixed price basis, for example dental surgery and laser eye surgery, works well, but almost all health care is offered on the basis of that they will do it, then afterwards make up a price on the basis of political power. For example my family has catastrophic coverage, which means we pay most ordinary medical charges out of our own pocket, but the insurance kicks in when we actually come down with something expensive. My wife was advised to get a colonoscopy. We shopped around, got a reasonable price at a doctor with a good reputation, negotiated with the insurance company, did all the stuff one does in an environment which actually has prices. Then after the colonoscopy was done, the hospital pulled a huge list of stupendously expensive charges out of their ass, most of which were obviously ridiculous or completely made up out of thin air, just trying it on to see what they could get away with, and all of which were charges we had definitely not agreed to, nor consented to in any way, formal or informal, written or unwritten. They just were not used to doing stuff on the basis that one has a definite price, and that the price one charges affects demand for one’s services. The concept seemed alien and incomprehensible to them. Mentally, they were socialists.
In Singapore, they advertise prices.
Some years later, I had the following conversations with various US health care providers. I recorded the conversations:
Conversation with Stanford Hospital:
My wife needs a colonoscopy: Could you give me a price on it?
Stanford Hospital: (businesslike tone)
Twenty five hundred to thirty five hundred.
You do this all the time. Can’t you give me a
Stanford Hospital: (cooler tone)
Is $3500 the all up, all included price to both
myself and my insurance?
Stanford Hospital: (businesslike tone)
It only includes the doctors fee, and does not include any additional services
So after I have this done, any number of people could then charge me any fee they like in addition to the thirty five hundred?
Stanford Hospital: (distinctly chilly tone)
I am afraid so.
My wife needs a colonoscopy: Could you give me
a price on it.
Do you have a primary physician?
Yes, my primary physician has advised this procedure, but it seems expensive. I am looking for a price.
O’Connor Hospital (outraged and indignant)
We don’t give out prices!
Mercy General Hospital
I am looking for a price on a colonoscopy.
Mercy General Hospital hangs up without a word.
Saint Joseph’s medical center of Stockton:
I am transferred to financial counselling, who transferred me to “Estimates” The estimating lady appreciated my problem and made sympathetic noises.
She then asks me for a CPT code. I then research what CPT codes are, and discover that an operation can result in any CPT, and any number of CPTs. I discover that no matter what CPT I give, it is unlikely to be correct or sufficient, that additional CPTs can show up any time. A CPT would only be useful if it was possible to know in advance what CPTs would result from a colonoscopy, but the CPTs are only decided after the colonoscopy, usually long after the colonoscopy.