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0 pointsnodamage9y ago0 comments

> And there's ample evidence that free markets are more efficient at providing value, when held to a legal framework that maximizes freedom (for everyone, consumers and proprietors alike).

I don't think there is. I think in many cases, what starts out as a "free market" is ultimately overtaken by a few large corporations (as others fold or get acquired) which then proceed to abuse their position of dominance to engage in monopolistic rent-seeking behavior to maximize their profits at the expense of everyone else. Think Microsoft abusing their dominance of Windows, or Intel abusing their position to prevent PC manufacturers from using AMD products. We're starting to get there with iOS and Android being the only two remaining choices for mobile, and Facebook for social.

My concern is even if you could hit a magic reset switch and turn the health care industry into a free market, it would trend the same way. Insurance companies would grow in size and squeeze the health care industry from both ends, charging patients more and more money, while paying doctors less and less, all so they can squeeze out a larger profit. Pharmaceutical companies would jack up the prices of their drugs because they have a captive audience, they know you're going to pay up because your life is at stake, all so they can squeeze out a larger profit.

It's questionable to me if the medical system could ever act like a free market:

1. In emergency situations you often don't have the opportunity to "shop around" for care.

2. If a pharmaceutical company is the sole manufacturer of a life-saving drug, what stops them from jacking up the price of said drug to maximize their profits, at the expense of patient lives?

3. If paying for someone's medical treatment is unprofitable, insurance companies have an incentive to drop that person's coverage instead of paying for treatment. (And often did pre-ACA.) How could a free market possibly address this situation?

Universal health care systems around the world are not perfect, but many countries have implemented them successfully and as a result spend less money on health care (as a percentage of GDP) than the US while simultaneously having better health outcomes. Why not move towards the known quantity which has already been tested and proven by every other modern country in the world, instead of this hypothetical free market system which we've never seen before, and frankly, sounds rather dubious in light of my questions above (especially (3))?

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lend0009y ago· 2 in thread

> I don't think there is. I think in many cases, what starts out as a "free market" is ultimately overtaken by a few large corporations (as others fold or get acquired) which then proceed to abuse their position of dominance to engage in monopolistic rent-seeking behavior to maximize their profits at the expense of everyone else.

Yes, that's crony capitalism, not a free market. There is no such thing as a natural, malevolent monopoly (except for governments). They require special government privileges to maintain dominance for long, or they will fall to competition in a free market (or have to become benevolent enough so that they still maintain market share with consumers).

Corruption isn't something you just "solve" in any part of government. Except, maybe, in a government made up solely of AI/programs. But anyway, for now it's fair to assume that it's an eternal problem that plagues government, and in fact it is the problem with our current FDA. So do we just give in? No, let's continuously reset it, be vigilant, and avoid giving the government "privilege-granting" powers that allow it to enable rent-seeking in the first place, so that we don't need to do frequent resetting.

> It's questionable to me if the medical system could ever act like a free market:

Whether healthcare can be a free market is a different issue, and I've heard people even say it's inherently an immoral industry. I think healthcare is perhaps the MOST moral industry inherently, but the idea of medical insurance specifically is terrible to me, because for many people, healthcare is something they access frequently throughout their lives. I don't think health insurance is compatible with a free market, and probably constitutes fraud. The whole business plan of insurance is that people are hedging against risk/accidents, and will end up paying in more on average than they take out, but in reality health insurance is intended to cover WAY more than that as it currently stands. "Accident" insurance makes a lot more sense to me, and it's compatible with the idea of insurance (broken arms/trauma/etc.). But even serious illnesses are not really unexpected, because almost everyone gets them -- it's just a question of when. I think all medical expenses should be paid out of pocket. This is completely unreasonable in our current expensive, heavily and unfairly subsidized system, but if we refactor the system and take health insurance out of the equation, it's hard to imagine just how much costs would come down. Looking at the costs of raw materials and labor, there is absolutely no reason this should be so unattainable, and it's far more "fair." Yes, some poor people who got bad genes all around are going to have a more difficult time than a healthy or wealthy person and will have to pick and choose healthcare options that would be in their body's best interest, but such is life. Scarcity exists, and even the entire healthcare industry cannot keep one person alive forever. Side note: the majority of a person's lifelong medical expenses are incurred in the final two years of his or her life. There is finite medical care, and there is diminishing return (measured in hours/$) for how long you can keep a dying person alive another day. This is not a solvable problem with a socialist system -- there is INFINITE demand, so we need to let the market increase the supply as best it can (which is via competition, freedom, and profit motive).

So I think that answers number 3, where I very much agree with you. Number 1 as well, because you had the option to "shop around" for your accident insurance which should have you covered wherever your insurance is valid. Number 2 is solved by the free market and my additional post on reducing patent lengths. But what if the drug was just invented and they are still the only ones allowed to manufacture it?? Here is the real misunderstanding I think you share with many of my liberal friends. THIS COMPANY JUST INVENTED A LIFE SAVING DRUG -- WITHOUT ITS INNOVATION, EVERYONE WITH THE CONDITION WOULD DIE, AND NOW SOME ARE LIVING WHO CAN AFFORD TO HELP THE COMPANY RECOUP THE R&D COSTS + INCENTIVES OF MAKING A LIFE SAVING DRUG. And eventually, when its protections expire, the price will come down as others enter the market. In fact, it would probably not be in the company's long term interests to price gouge because people will remember that when competitors enter (who hasn't heard Shkreli's name?). Basically, well-intentioned people like yourself would benefit people who depend on this drug in the short term, through government intervention, at the expense of innovation in the long term as fewer corporations are attracted by the riches that await them for furthering the medical field and saving people's lives.

I apologize for the length of this post -- this topic is near and dear to my heart.

nodamageOP9y ago

> Yes, that's crony capitalism, not a free market.

You're getting close to "no true scotsman" territory here. Microsoft abusing its position in the PC market: crony capitalism, not a free market? Intel bullying AMD in the processor market: crony capitalism, not a free market? Are there any examples anywhere in the world of a truly free market then?

> "Accident" insurance makes a lot more sense to me, and it's compatible with the idea of insurance (broken arms/trauma/etc.). But even serious illnesses are not really unexpected, because almost everyone gets them -- it's just a question of when. I think all medical expenses should be paid out of pocket.

The problem is serious illnesses tend to be the most expensive. Even if health care costs were magically cut in half, cancer treatment would still bankrupt the vast majority of the population. So, tough luck for them?

> Basically, well-intentioned people like yourself would benefit people who depend on this drug in the short term, through government intervention, at the expense of innovation in the long term as fewer corporations are attracted by the riches that await them for furthering the medical field and saving people's lives.

Yeah... I'm not necessarily convinced that medical research should be a for-profit enterprise either, for exactly the reasons you mention. ("Should we research a cure for this disease?" "Our projections indicate it won't be profitable" "Ok, moving on then...")

I get that you believe free markets will solve the problem of expensive health care, I just don't see the mechanism behind it. So far it seems very hand-wavy to me. 1) Free markets. 2) ... 3) Cheap health care. What exactly happens in step 2? How do you prevent it from turning into an abusive "crony capitalism" situation?

lend0009y ago

> You're getting close to "no true scotsman" territory here.

The free market is an ideal -- I do see where you're coming from. But the market is never free so long as there are corruptible people in government or the framework does not fairly protect freedoms, but does that mean we shouldn't strive to get as close to the 'ideal' of a free market?

For the Microsoft example in particular, they didn't benefit from government intervention until the government "punished" them, by forcing them to provide a more inclusive platform. Makes you wonder if 90% of the PC market would still belong to Microsoft if the government had not gotten involved... might have pushed us toward open source/Mac OS sooner. In the other case, Intel just plagued AMD with legal bills, which perhaps says something about the way our legal framework is set up (can't countersue to cover legal costs), but Intel always provided a superior product so it's a quite stretch to say it was a "malevolent" monopoly. So you're right, neither of those are really crony capitalist examples, but that doesn't mean they contradict my points on market freedom and ill-willed monopolies.

I challenge you to provide an example of a longstanding, malevolent monopoly that did not rely on government privilege.

As to the points on medical care, I assume you agree?

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