Wednesday, December 19, 2007

Doggy Doctors, Part II

I was originally going to respond in the comments, but then figured that the Doggy Doctors response deserves it's own place in the blog. Here's the response I was going to leave:

Thanks for taking the time to respond and let me just say that I'm 100% serious. I think you responded mostly to the difference of how easy it is to see a doctor as compared to a vet, but I also meant the ease at which one can shop around for prices- Just try doing that with people doctors and see how far you get.

But the main point I was trying to make is the one you make down at number 5- the fact that we pay for virtually all of our health care expenses through insurance is one of the reasons we have such a screwed up system. Insurance is effective in protecting against catastrophic costs and unforeseen expenses- insurance is not an effective mechanism in covering routine expenses- if it was, we'd cover more of our routine expenses with insurance, but the fact of the matter is that health care is the only routine cost covered by insurance.

Your not entirely wrong with the points you make, they just need to be taken in the context of a pet system of health care where people pay costs up front versus a people system of health care where costs are paid by third parties.

Most of your argument comes down to basic supply and demand, but heres the thing- with all the regulations and third party payments the basic working of supply and demand gets fucked up. In a truly functioning market, the rules of supply and demand means that prices will rise when demand exceeds supply. The higher level of demand eventually leads- if possible- to an increase in supply, which in the long run will theoretically bring prices back down.

But the basic idea is that when supply is limited, prices will go up in order to best ration the available supply. That way, people who might have gone to the doctor for their minor cough or cold at X price, would think twice when X doubled - while people with more serious conditions would want to see the doctor for either X or 2X.

We get lines at doctors- and we're unable to compare prices- because our health care system is completely third party payer oriented. Doctors may bill different prices to different patients for the same sorts of conditions, not based on need, but based on what the various insurance companies or Medicare is willing to pay. It's a screwy system because it doesn't respond to market forces. People are not able to shop around for prices and people don't respond naturally because they are not footing the bill.

I don't hold any illusions that our system of health care will ever work precisely the same way the pet system of health care works - I'm just fascinated how we have a system of delivering health care that works smoothly and efficiently, yet no one is willing to look to that system for hints or suggestions as to how to make our own system better.


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