Quote:
Originally Posted by sebastian_dangerfield
I don't know why you think there will be all this negotiating taking place. For rote preventative care, units will have prices. People aren't going to walk into the doc and say, "How much for a physical? $100? No way. I'll give you $75." It's not going to be a flea market.
Prices will be more transparent, and with that there will be enhancement of competition among providers. This naturally benefits consumers.
Why do you prefer the opaque pricing system we currently use? If you're truly concerned about informational asymmetries, how can you argue against publishing prices to consumers?
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This is one of those times when I realize I spent too much time talking to economists.
Sure there will be unit prices. Those unit prices exist now, and are the subject of bargaining between your provider and your insurer, which has a strong interest in forcing them down. If you have to pay for your preventative care yourself, you can't rely on the insurer for that function. You're going to shop around. How often you shop around will depend on your tolerance for collecting unit price information from different providers for the different things and assessing the likelihood that you will need to purchase the different units, and also on your switching costs.
If you think that world is going to produce lower prices, you are totally nuts. No one wants to do that stuff, which is why they are happy to pay an insurer to do it for them. The insurer can do it for a bunch of people at once, taking advantage of economies of scale and scope, and is more sophisticated about this stuff than you are, avoiding information asymmetries.
Prices are completely transparent right now to the insurer, which is the entity with which the provider is negotiating prices. There is plenty of competition between providers, and insurers.
It is true that if you see zero marginal cost to doing a procedure, the cost to your insurer is no disincentive, and you may overconsume. However, your insurer has thought of that, and is very interested in keeping you from obtaining healthcare you don't need. As others pointed out, this is not so much of a problem with preventative care, which is why it's a little odd for you to focus here. Preventative care is not that expensive, and it has the nice effect of reducing costs down the road. So in fact there is a danger in preventing people from buying insurance to cover it, since they may then under consume.
It doesn't benefit consumers to force them to participate in a market they don't want to be in. Would you rather buy a pass that lets you ride the bus for a month, or would you rather negotiate whether and how much you'll pay each time you board? If you take the bus much at all, and I'm sure you don't, you'll know it's the former.
