I did a podcast on health policy with Daniel Belkin and Mitch Belkin at the External Medicine Podcast. video embedded above, audio at the link. They're a great team. Free market health care and insurance is a hard sell, having to climb mountains of the usual objections and anecdotes!
Tuesday, July 26, 2022
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The interview is interesting, but rambles over the field in a somewhat disjointed way that is more a reflection of the moderators' interests. John does a decent job of addressing the issues and offering insights on the problems and challenges facing the Health Care industry sector.
ReplyDeleteTwo decades ago, I joined a venture group that was scoping out a small hospital operation in Las Vegas with a view to acquiring the assets. As part of the due diligence effort, we delved into the local hospital market and the competitive situation and the regulatory environment. Hospital insurance providers negotiate service fees with each hospital, and the point of negotitation is to obtain the deepest discount from the hospital's published price list possible. Knowing this going into the negotiations, the hospitals set their price lists at the highest prices that the competition will bear, and then engage in "dance" with each insurer to determine which insurer gets which discount rate based on the expected patient flow from the insurer's pool of insureds. The uninsured patient is charged the list price for the procedure performed by the hospital; while the insured patient receives the discount agreed between the insured's insurer and the hospital. Prices are broken down by unit of service -- a single dose has a unit price, etc.
My own limited experience, as a patient, with hospitals and urgent care facilities owned by hospital chains in the State of Washington is that if you truely need to know what a procedure will cost you, out of pocket, speak to the accounting and billing department of the hospital. More often than not, the employees are willing to provide a good of idea of what you'll be facing from a financial point of view.
Regarding the economics of health care in the U.S., a hard-cover book titled Health Economics by Charles E. Phelps, 1992, Harper-Collins Publishers Inc., New York, NY, is an accessible and comprehensive source of theory and practical insight on the economics of medical and health care services sector, presented at the upper undergraduate economics course level.
Hey Dr. Cochrane, what is your take on the Surgery Center of Oklahoma (https://surgerycenterok.com/)? They do not take insurance and only accept cash/cash equivalents.
ReplyDeleteThanks!
Julien
Lovely! Wonderful example of how to approach analyzing a market like an economist. The bit about marginal changes in regulation was particularly illuminating.
ReplyDeleteI read your paper but couldn't do the entire video.
ReplyDeleteThe underwriting problem is too difficult for pre-existing condition insurance. The private market has not moved towards this in force. In my experience in this market, plans that try to offer this service have been crushed. I've seen 300% loss ratios. The member knows more than you and future long term expenses are practically impossible to predict.
Politically, people want unlimited spending and unlimited utilization fully subsidized by somebody else. The only solution is a hardass that doesn't have to answer to their complaints, even if it kills them when push comes to shove. Even an empathetic person with noblesse oblige has to do that in the healthcare market.