Rich_by_the_Bay
Moderator Emeritus
Health care technology keeps advancing, which should normally reduce costs in any other industry, but it doesn't seem to apply here - why?
That's an excellent question. I can think of some reasons:
1. The competitive open market works very poorly when the vendor is ethically and legally bound to deliver the requested service even if the buyer is unable or unwilling to pay for it. Such is the case in medical practice.
2. When virtually every purchase is carried out under onerous third party agency, the negotiation between buyer and seller is perpetually disrupted.
3. Indirectly, the vendor operates under price fixing - medicare sets reimbursement rates; carriers often follow though at a somewhat higher rate much of the time; a byzantine and unpredictable "percent of charges" method coerces the vendor to set artifically high prices in order to receive a fraction of them, then the same prices prevails when dealing with a customer who is NOT under that kind of system
4. Compliance with regulations and malpractice protection superimposed on the above ad further distorted pressures to the market.
5. Medicine itself has failed to embrace proven standards of care, guidelines, performance incentives, and other industrial practices which apply to the profession, if not perfectly. This is changing rapidly but often at the hand of carriers who overweight cost compared to quality.
So it is not a system that is controlled by free-market sources. Best I can tell, the majority of patients, physicians and economists are distressed by the system.