The usual economic argument is, “Price controls/ceilings are bad because they lead to shortages.”
But:
I can’t believe that a hospital can’t make ends meet unless they charge $20,000 for an appendectomy, $5,000 for stitches. Unless they have horribly, ludicrously high operating costs.
Putting a price control on, say, gasoline could lead to a shortage because people would buy more more. But nobody goes to get an appendectomy unless they need one. Therefore, “consumption of health care services” might not necessarily rise much.
Because hospitals don’t get paid that much for EVERY appendectomy. They may charge that much, but every private insurance and government health plan caps how much it pays for every procedure. The remainder is written off or charged to the patient who often doesn’t/can’t pay the rest. If they actually got paid every time, they could charge a lot less. Unless the government can mandate payment, it shouldn’t mandate price.
They (may) charge that much, but they don’t expect to actually get that much. In some cases, they don’t get anything at all, or the payments are delayed and they get a lesser amount.
It’s a game really, necessitated by our convoluted health care system. We basically have the worst of both worlds. It’s not actually a free market system, and it’s not a single payer UHC system. It’s a mis-mash system that evolved, not one that was planned out or thought through.
Also, not every appendectomy follows the textbook.
When I had my gallbladder removed, a friend had just had hers out and went home the next day to do gardening. My gallbladder was complicated, involving a day post-op in the ICU, a Jackson-Pratt abdominal drain, and a week in-hospital total. When I was discharged, my nurse urged caution, as she felt I was being rushed out.
If you’re controlling prices, will you also be controlling infrastructure and staffing levels? Just last night I heard an anecdote about a local hospital converting space into more elective and profitable procedures. Even if you don’t have increased demand, there could still be a decrease in the supply of routine care.
Price controls could make hospitals concentrate on more profitable services. It’s somewhat difficult to work out the details because the hospital charges are more related to the overall costs of running the hospital than the specific services provided. I doubt there would be many shortages of services, it’s more likely to disincentivize hospitals to invest more in certain areas.
Obviously through years and years of experience in the health care field. The figure is backed up by countless peer-reviewed and accepted studies as well. Right, OP?
A hospital can deliver very high-quality health care while charging nothing for an appendectomy if their other services provide enough income. You can break down some of the costs to precise figures, but most of the payments come through insurance and it doesn’t matter what the actual costs are. Other costs are impossible to determine. What it costs to maintain a single operating room is spread out through all the uses of all the operating rooms in the hospital, as well as the costs of staff and other resources. Simplistic solutions like price controls aren’t really attacking the problem of the high costs of medical care. If put in place for some services the hospital will increase prices elsewhere if the bottom line suffers. If put in place for all services some hospitals could end up going out of business, but more likely they’ll find more money through donations and public funding and the cost of health care just becomes more distributed through the economy.
Hospitals love private health insurance. Private health insurance is the least of their problems.
Medicare pays much less than private health insurance, Medicaid pays much less than Medicare, and “charity care” generally pays zero. That’s the way the money goes.
Price and cost are two different things. If the price doesn’t exceed the cost in total, you can’t make it up with volume. If you are asserting that they can be forced to charge a lower price, please show your math.
One of the biggest costs hospitals face is insurance-- malpractice insurance, and other kinds of insurance. I don’t know how compensation for malpractice is handled in other countries, but hospitals keep lawyers on staff and on retainer. They have lawyers on staff to consult with before deciding how to handle certain unusual situations, and lawyers on retainer should they ever need to litigate a claim, and that is in addition to insurance premiums. It isn’t just malpractice on the part of doctors.
There are things like, suppose you are served a food you have made it clear you are allergic to, or suppose the x-ray machine breaks, and something heavy falls of you while you are supposed to be having images taken. No matter how unlikely those things are, the hospital needs to be insured for them. And there is insurance not just for injury claims, but for theft, damage, etc. to a lot of very, very expensive equipment. All of that is built into the overhead, and everyone pays for a little bit of it, whether you ha an expensive test or not (just the insurance, understand-- the actual cost of using the machine is passed down only to the patient who uses it).
Again, I don’t know how countries with national care handle this: maybe with a very different kind of tort law, or maybe with an entirely separate fund for healthcare injury compensation. Or maybe because these countries take care of ill, injured, and disabled people better than we do, there is no need to sue for several million dollars in order to be prepared for a lifetime of care after a malpractice incident.
We have a similar tort system, but one difference is that there is a cap on awards for pain and suffering and loss of enjoyment of life. The Supreme Court concluded some 35 years ago that since that is an inherently subjective factor, there should be a cap on that aspect of damages.
Instead, our tort system focuses on the objective losses that can be proven, like lost employment income and, in serious cases, the need for personal care, like in-home nursing, special residential facilities, and so on. In catastrophic injury cases, that kind of special care can be quite pricy.
But, and here’s the major difference between our two systems, tort claims rarely include medical costs in Canada, because medical care is paid for by the government, not by the patient. Since the patient hasn’t paid for the medical care, that’s not something the patient can sue the allegedly negligent doctor for.
It’s not that our tort systems are very different, but that single-payer, universal health care drastically reduces the monetary losses that an individual has suffered, and therefore there is no claim in tort for that category.
Another way to look at it is that if an individual needs medical care, and can’t pay for it themselves, they will naturally look to see if there is any other person who can help pay. If you or a loved one really needs medical care, you’ll do what you can ti find it.
That “deep pockets” approach likely drives medical malpractice suits in the States, as a way for people to get access to medical care. In Canada, there’s no need to sue someone to get health care.
To be sure, the fact that the medical costs associated with an act of negligence are not borne by the individual does not mean that those costs are not incurred; rather, they are borne by the province. In essence, the Canadian general public acts as a partial insurer for malpractice (and negligence in general).
Mix of both for Spain, plus it’s different for private, public and “concertado” providers (concertado means a private provider which acts in part or in whole as a subcontractor of the public system - when it acts as part of the public system, it is so for all purposes). It is also different depending on who got hurt: for the radiology tech it’s a job-related injury, for a patient or patient’s companion it’s not (the care is the same, but some of the paperwork and the distribution of costs are different - the hurt person has “prepaid” in both cases and has the same cost in both cases).
Most medical costs will be covered, so as Tom Tildrum said, the system is already its own insurance. Other costs will be covered in part by job-related insurance. Yet others will be dealt with via ombudsmen, mediation or suits, but suits are considered an Ugly Thing by most people, something to be avoided if possible. There is a curse, “may you sue someone and win”, which reflects that the monetary and emotional costs of a successful suit are perceived as generally not worth it.
The Consumers’ Union is pushing for people to complain more, but those complaints are unlikely to end up in suits.
A childhood friend of mine died in a clear case of malpractice, but one which was also clearly a honest mistake on the caretakers’ part (bad protocols, bad communication, bad training). The hospital updated its protocols (medical, communication and training) and is paying all out-of-pocket costs of the education of the deceased’s child up to and including one graduate degree (books, uniforms, tuition, dorm/apartment; if it’s something the family would normally have paid for, the hospital pays it). The only lawyer that got involved is the one called in to make sure that the agreement the family and the hospital had reached was legal and put it down properly. The agreement was in place less than six months after the death; a suit could have dragged for years.
If you put price caps in place, you have to define the standards and procedures pretty exactly - but medical practice is simply not like that, every task or procedure will have a number of different pathways.
Calculations can be made to set a cost that average things out, after all this is exactly how insurance works.
Your problem is this, each and every medical practice will ensure that every procedure falls into exceptional work categories - they will simply game the system - this is always what happens when you set controls on complex systems and put rigid targets in place, and the profit motive is an extremely powerful one.
Not necessarily; that assumes that health care is always a form of insurance.
But, the paradigm of insurance, which ultimately assumes some responsibility for the individual, is misleading in the context of universal health care, in my opinion.
If health care instead is simply considered a public service, then that type of insurance-based model is irrelevant.
Take the case of highways. If the trucking industry had to build the necessary road system for its trucks to run, their costs would be immense. But we don’t consider the highway system to be a subsidy to the trucking industry, simply a public service.
Same for police service. If there were no police services, then businesses and homeowners would have to pay for security themselves, at considerable cost. But we don’t consider police services a form of subsidy or insurance for businesses and homeowners. Police services are a public service.
Same for universal health care. Once the policy shift is made to the position that health care is a public responsibility and a public service, analysing an issue through the lens of insurance is misleading, in my opinion, because it implicitly undercuts the public policy decision that has been made, that health care is not a matter of personal or employer health insurance.
People sue less often and are awarded lower damages when they do. I’m not aware of the existence of “ambulance chaser” over here, for instance.
Although it’s less and less true, and insurance cost is becoming a problem for some specialities (in particular obstetrics).
(There used to be in fact much stricter requirements to be awarded damages as a result of a medical mistake, French courts having been traditionnally very reluctant to grant damages because someone trying to save your life had made an error, but it changed about 20 years ago).