Why are medical tests so expensive? (1 Viewer)

[Chu Gai]

A brief google search for "mri cost" suggests quite a variation in costs. Not being a doctor, I wonder out loud if mri's are perhaps more prescribed than necessary. Personally, I'd like to see more advertising and competition in the medical marketplace. Maybe one day Walmart will have an MRI facility.

 

[RobertR]

If by "taking" you mean fraud or the threat of violence, neither of those is a market transaction. When I buy, say, a soft drink (the soft drink industry is relatively unregulated), no one is "taking" anything from anyone. The buyer gets what he wants (the drink), and the seller gets what he wants (the money). No "taking" is involved. Neither do I agree that the only way people become wealthy operating in the market is by making others poorer. It is government that, by its very nature, involves coercion and taking.

 

[KurtEP]

I imagine doctors are in a bit of a dilemma, if you don't go for an MRI and there is a problem, people will shout malpractice. If you go for one and there isn't, you are over billing.

For what it's worth, I'm not in favor of advertising in the medical marketplace at all. Most people aren't capable of sorting out the information.

 

[KurtEP]

Again, you are using an extremely narrow version of "market." In the real world, people deal, coerce, bribe, threaten and seek to gain any other advantage they can get. You can argue textbook economics all day with me, and I've read much of it, but the real world is different, and it's obvious to anyone who's spent any time there.

 

[RobertR]

Laws enacted to protect against fraud are fine with me. What isn't fine with me are laws that say the operation of the market is fundamentally "broken".

 

[KurtEP]

The market is what it is. Saying it is "fundamentally broken" is a political argument. Markets exist, as they always have, with either more or less regulation. There's little else to say. Of course, you can argue that a system, like the medical billing system, is fundamentally messed up, but that would be saying a different thing.

 

[RobertR]

You may not have been talking about it, but in the "real world" you like to refer to, "getting screwed over" and "screwing over businesses" happens a GREAT deal where government is involved. The difference between getting screwed over by a business vs. the government is that you don't HAVE to deal with the business, but government doesn't give you that choice.

 

[KurtEP]

At least law is largely predicable, politics, perhaps less so. The simple fact is that people will attempt to gain advantage wherever possible. Also, you don't have to deal with government, just don't make money. Face it, government is inherently problematic, and so is the free market. There is probably no ideal solution, but you have to work toward a workable solution.

Also, I like to discuss the "real world" largely because, despite being largely an academic (of sorts), I also have significant experience there and understand that there is a huge difference between economic theory and economic fact. Economics is, at this point, a science in it's infancy, despite its foundation in the early 1800's. It's simply too complex to make much headway. Of course, if you take an undergraduate economics course, they'll tell you some tidy theories that seem to make a lot of sense. Unfortunately, you'll never be able to actually use any of them to any real effect.

 

[Todd Hochard]

I recall recently reading in the book "Freakonomics" that doctors who own MRI machines prescribe MRIs at several times the rate of doctors who don't own one.

Medical tests are expensive, because-

1. Too many middleman "adding value" (as if) to the health care process.
2. Because they can be.

That's my take.

 

[RobertR]

Agreed. I said in a previous post that no system is perfect. Where we disagree is that you think government involvement makes things less problematic, and I think it makes them MORE so.

 

[KurtEP]

No, we don't disagree there necessarily. My point is that government involvement is necessary. It may be a necessary evil, but it's still necessary. I'd prefer less rather than more, but still, I'm honest and admit that it's absolutely necessary to some degree. I just don't sit around kidding myself that some mythical "free market" exists that we just have to find.

 

[Carlo_M]

I am surprised in this age of Corporatocracy that we've been in for the last few decades, that corporations can still be painted as needing to be freed of government controls. They've been free for quite some time, the only last holdouts being the regulated industries (and those are declining in number). Powerful corporations, especially those who become multinational, answer to no government (we can thank the Supreme Court circa late 19th and early 20th centuries for giving corporations rights equal to those of a private citizen in a series of cases) by and large, and their abuses are well documented. The more powerful the corporation, the more potentially egregious their abuses. The medical industry, should it break from government regulation, would become the largest of these corporations. Everyone needs medical care. There would be no free market behaviour.

Remember: a corporation has no conscience, no moral obligation to society, it exists for one reason: to increase profit [for itself and its shareholders] in order to continue on in perpetuity. It's like the Terminator. It will never stop, ever.

Look at the top 9 of the Fortune 500 and how little the free market forces control them, and what shenanigans they've been recently caught in:
1. Exxon - gas seems to set it's own prices. When there is good output from the Middle East and local drillers, they shut down refineries to limit output.
2. Wal-Mart - strategy is to chase smaller business out, then become monopoly
3. GM
4. Chevron - see: Exxon
5. Ford
6. ConocoPhillips - see: Chevron
7. General Electric - involved in WorldCom scandal (largest bankroller)
8. Citigroup - involved in Enron scandal (major investor)
9. AIG - in 2005 admitted to 1.9 billion in improper accounting

I wouldn't want any healthcare provider emulating these corporations, but if they were free market, as they gained in revenue and power, they would. It is the natural way of corporations.

 

[ChristopherDAC]

This statement is perfectly false. Any number of organisations which are not protected by State power can or do have power over you. The fact is the result of "market power" — that is, when an organisation, such as the Standard Oil Trust, or today Wal-Mart, is large enough to render the free market model inapplicable to its environment. "Company towns" are an example of this phenomenon, in an egregious degree — only rarely have such organisations achieved or maintained their dominance by the use of State power (Pullman, Illinois and Homestead, Pennsylvania come to mind), while they have often ket their positions by a suppression of the mechanisms of law. Also, I would point to voluntary industry standards as a sterling example of how self-organizing cooperative behaviour — the essence of syndicalism — can be of great value for society, as distinguished from conditions of perfect competitive behaviour.

 

[Chu Gai]

How does Wal-Mart have particular power over me as a consumer any more than any other store or service? They don't have the lowest prices on everything, nor the best service or the same brands. They're big. So what? If they get too big or stop meeting people's needs and expectations someone will step in and compete in those areas. While their very size may bring advantages of economies of scale it also acts against them by making them sluggish to respond in areas where consumers want something different or additional. Value added and all that. I might be able to buy tires and rims at Walmart but I just might find it more convenient and equally cost competitive to order them online from TireRack or someone else. I can buy sheetrock at Home Depot for less than my local True Value but I'll pay a dollar a sheet or so more at True Value because he'll drive 15 sheets over to my house, help me unload it and stack it in the garage. Intel used to be just about the only player in town and the town was the whole world. Not anymore.

I don't know about industry standards and syndicalism but in many cases it works to everyone's advantage for industries to standardize. Like shipping container sizes, ASTM standards, IEEE, procedures. You can call it syndicalism if you want. I just call it business meeting their needs at the same time as meeting the customer's needs. There are certainly capitalistic elements to this but maybe it just doesn't need a label.

Maybe. They're not any better off by trying to pick a doctor either. Nothing wrong IMO with surgeons advertising their prices and documenting their skill at boob jobs. I hear hospitals advertising for radioactive seed implantation to deal with prostate cancer. If my doctor says I would benefit from joint replacement, why can't I shop that around. Hell, I can go over to Thailand if I want and do it. Certain medical facilities already advertise they do tests. People can't do a lot of things when it comes to sorting things out but we don't stop politician's from advertising either.

 

[RobertR]

Let’s see here—A LOWERING of prices, innovation, meeting customers needs, being more efficient, etc. That sounds like “evil market power” to you? Maybe to competitors, but not to consumers, and it sure as hell shouldn’t be condemned by government.

 

[Edwin-S]

I thought this was supposed to be a discussion on the exorbitant cost of medical tests. Instead, I get to read lectures about the wonderful utopian ideals of laissez faire Capitalism and the purity and altruistic operation of the "free market", whose only reason for being is the enrichening of all mankind. After all, it works so well that there has to be some other reason why 1/10 of 1 percent of the population controls more than 80% of the world's wealth and productive capacity. Sorry if I sound sarcastic, but I'm tired of voices from the propanganda matrix constantly telling me why the system they have bought into is the "bestest in the world".

I hope the "free market" in medical services never reaches Canada; otherwise, our system (lacking in some regards) will become as expensive and byzantine as the American system. "Socialized" medecine has its downside, but at least I can go to a doctor or get needed surgery without the fear of being financially bankrupted. The same can't be said in the U.S. Unless, of course, your name is Gates or Rockefeller.

 

[RobertR]

I didn't say that either, only that it works better.

 

[Chu Gai]

Didn't a former Premier of Quebec travel to the US for cancer treatment? How long are the waits for bypass or transplant surgeries in Canada? You may be overstating the number of individuals who are going bankrupt due to the cost of the surgery or medical care in the US. BTW, I like Canada. Gorgeous country.

 

[Jeff Gatie]

In 1994 I got a vitreouectomy and full retinal reattachment done on my right eye at The Massachusetts Eye and Ear Infirmary. Basically they rebuilt my retina and replaced the fluid inside my eye after severe trauma left me blind. The alternative to this was what I affectionately called "shopping for marbles." I had no (nada, none, zip) health insurance at the time. They did the surgery anyway and I eventually regained enough sight to be pleased with the results. I was also the subject of training for no less than 4 surgeons from as far away as Paris and Moscow, since this was a fairly rare procedure. The hospital never sent me a bill.

Now, you may think I'd be able to receive the same treatment in Canada, except I couldn't. The only two places in the world that performed the procedure (at that time) were John's Hopkins in Baltimore and Mass Eye and Ear in Boston. I picked Mass Eye and Ear because of it's close location to my birthplace and the fact that the surgeon who was performing the surgery also invented it.

Just my little anecdote, take of it what you will.

 

[Edwin-S]

I was not intending to put words into your mouth. I just always get the feeling there are certain things that are unsaid but implied.