Anything that involves a government benefit that is out of scale with what people can pay out of their own pocket will become a nexus of corruption and distort the economy. That's practically an axiom of political economics, but politicians might wake up to it in 300 years or so.
I was just explaining to some friends recently that the only way to become a large non-entertainment tech company these days is to find a captive market (education, healthcare, power, logistics, emergency response, etc.), insert yourself as a cheap solution to a complicated and expensive problem, and then infect the entire sphere until your terrible software is load-bearing and senior managers can't be convinced to replace it. I'm not surprised that this practice also works well in non-software areas like hospice, elder care, transportation, etc.
Several large "Tech" companies basically are that already I think. Companies like EPIC or SAP or many other large enterprise companies, we might not normally think of as tech companies despite their main source of revenue is selling software and perform that very function. IBM is another though I do think we usually consider it a tech company.
Oh yeah, I was primarily thinking of Epic, as well as an emergency services platform I almost interviewed for. If your primary product is software I think you're a tech company.
Yes, having the private sector fraudulently gobbling up those dollars is pretty sickening. Only working solution is to have government run healthcare top to bottom.
The reason politicians don't wake up to it is because they have no easy alternatives. The fixes in this situation are much more complicated than the dunks.
How about any aspect of human behaviour that involves people with a difference in economic, health, or educational levels will lead to an exploitative marketplace?
(Edit: ^ that looks like a slippery slope to Marxism which isn't intentional so please be gentle with your feedback)
Yes, it does. The government is the only entity here that has effectively an unlimited wallet. Every time the government is involved in these markets (without taking them over completely), prices explode because the government purse completely crushes the demand curve. Education and healthcare are prime examples.
If you want a counterexample to the idea that healthcare prices are high solely because the demand for healthcare is inelastic, look at dental care. There isn't a lot of government funding for dental care, although it is very much necessary for your overall health. As a result, dental care is comparatively cheap - a full routine cleaning plus a check-up from your dentist (handled by private insurance) costs about the same as a single lab test (handled by medicare/medicaid and private insurance). Serious interventions, like wisdom tooth removal, crowns, or braces, cost only thousands of dollars. By contrast, routine surgeries are often in the tens of thousands.
Similarly, in education, private trade schools tend to cost $10,000/year or so, while private colleges are $50,000-70,000. The economic benefits of a private trade school are actually similar to the benefits of several majors.
Healthcare is explicitly an area where the government is provably more efficient, and I believe situations like those in the article are caused by the interface between the government and private corporations lacking appropriate oversight, investigatory powers, etc. That is to say, the issue here is not "government waste" but rather the private sector bilking the government, abetted at times by the government itself, of course.
But compare Medicare reimbursement rates and private insurer rates, compare outcomes and satisfaction with care between private insurers and Medicare/Medicaid, even within the US: the government is the clear winner despite spending much less. Once you compare across countries this becomes even more obvious.
In the US, if you accept Medicare patients, by law you must not charge anyone less than you charge Medicare. Private entities typically see Medicare patients as marginal demand: The bed/room is there, the nurses are already staffed, so might as well take Medicare dollars than nothing. So it’s not really much of a dunk to point out Medicare vs. private reimbursement rates.
Also note that Medicare pays 10 cents on the dollar for everything on the chargemaster. Hospitals are priced to make a tiny bit of money on that, so a lab test with $20 of reagents and $10 of lab tech time goes on the chargemaster for about $300. 1 hour of doctor time easily pushes you into the high thousands on the chargemaster.
For profit education was a clear sham, though. Such that it is a giant elephant in the room when claiming that private schools are better than public.
Dentistry is also similarly... not as strong as you'd hope. "Do something" behavior is strong in that field with relatively little evidence that the amount of interventions we do is necessary.
Dental cleaning and some oral surgeries (eg wisdom tooth removal) are both very clearly good for your overall health. I agree that a lot of dentistry is quackery, though. A lot of it is also pretty much cosmetic.
Also, we should add that private != for-profit. This applies to both trade schools and colleges - don't go to a for-profit school.
Wisdom teeth removal is actually one of the things they default to, that it is less clear they should default. Though, I don't know how to square your thoughts here. Prime example of how private enterprises control costs? Or a lot of quackery and cosmetic only? These seem at odds.
I'm not sure what the distinction between private and for-profit is. Can you elaborate?
Examples of necessary things. If the wisdom teeth are coming in straight, they can stay (although most dentists will remove them anyway), but they usually come in at an angle, and need to come out so that they don't cause problems. I agree with you that dentists overdo this one, but for many people it is actually necessary.
In the US, we have 3 kinds of schools:
* Public/state schools: The school is run by a state government. Some of these have good quality, but some are not good. All of them give a huge discount to students from the local state.
* Private for-profit: These usually all suck, and are scams. ITT tech, University of Phoenix, and others are in this boat. These make their money by providing an education for less money than they charge in tuition.
* Private non-profit: The school is organized and run as a non-profit institution, but is not connected to the government. Harvard, MIT, Stanford, and most other top colleges are private non-profits. Outside the US, I think Oxford and Cambridge are also like this. Private non-profit trade schools also exist, and they are usually the best ones. An example I can think of is the North Bennet Street School (again in Boston, MA). The high-end schools in this category tend to get more of their money from donations and endowments than from tuition.
Most British universities don't map cleanly onto these categories. In theory most of them (including Oxford and Cambridge) are independent educational charities. But endowments are (by US standards) small, and they're so dependent on public funding that they tend to do governments' bidding. A little less so Oxford and Cambridge, which are richer and prouder, but it's mostly a difference in degree than in kind. There's also quite a bit of direct government regulation (e.g. by the Office for Students).
There are also a few actual private universities, some non-profit (e.g. Buckingham, a free-market experiment which has survived but not thrived) and some for-profit (e.g. BPP University). But all of our major institutions are semi-public. Ish.
Apologies if it sounded like I was saying they should never take out wisdom teeth. I was just alluding to what you ack, it is the default position that near any dentist practice will hold. I will fully cede that I don't see too much danger in this position. Hard to not feel it is a wasteful, though.
Ok, I thought you had something other than non-profit in mind there. My personal experience with private non-profit schools is less shining, to be honest. The vast majority of their success is typically from heavy selection on who they allow in.
Perhaps unique to my area but I don't know anyone who was "defaulted" to have their wisdom teeth out. I didn't until college because that's when I started having issues with multiple partial bony impactions. My fiance still has hers. Everyone I've talked to about it was told by their dentist "if it doesn't bother you we won't do anything, and once it does we will."
From what I've seen, folks that are long term with a dentist are likely to get decent advice to not do unnecessary work. New practices, especially chains, are heavily incentivized to do the work, though.
To be fair though, a shocking number of people don't see a dentist regularly for cleanings and go for years with problems that could be fixed with a $2000 dental surgery because they can't scrape together $2000.
Yes, healthcare demand is inelastic. Dental care is actually not inelastic. A huge percentage pass it up.
Where the absurdity of healthcare costs come from, in the US, from my experience as a provider there and in Australia, is the huge information assymetry (ie most people cannot doctor themselves - this is true everywhere) along with, in the US, the need to practice hugely defensive medicine and a drive to add in and bill for as many things as possible. The country is totally fucked (on a healthcare basis at least) because the construction of so many perverse incentives has driven the whole mode of behaviour out of whack
I'm an Australian with family in eastern-Europe. I get my dental work done there at a fraction of the cost of doing it here in Sydney. The quality is at least on par with Australia.
I was unable to travel for a few years on account of work, and then COVID, and was seeing the local dentist recommended by my health insurer. They advised me that I needed my wisdom teeth removed. I was skeptical: My wisdom teeth came through in my teens with zero pain. I'm an adult with no tooth pain. When I asked why, the dentist was very vague, and told me it was for the best on account of the long-term likelihood of decay. I wasn't convinced. When I recently saw my extended family's local dentist, they showed me that my local Australian dentist had just left decay to flourish in my wisdom teeth, and not even let me know there were cavities there that were fixable. A quick filling would have saved me lots of hassle. Instead it seems they wanted to encourage me to take a much more costly course of action. In case anyone is wondering, this was an expensive clinic in Sydney's CBD. I'll never return!
The exact same dental work in Canada is a third of the price. But my dentist there operated out of his suburban basement, while my dentist here operates out of a swanky Main Street office that I get to pay for.
Both countries use the same, non-socialized, out-of-pocket-or-private-insurance model of dental care.
Try watching the evening news on broadcast TV sometimes. You occasionally see an ad for something buy out of their own pocket (particularly DTC startups) but it is almost all benefits you can get from medicare, prescription drugs, lawsuits you can join because your CPAP is trying to kill you, and personal injury lawyers that specialize in car crash victims. (I guess somebody has to advertise cars because if people didn't buy cars you couldn't get hit by a car and call William Matar but you don't see car ads until 8pm when prime time starts)
What's scary is that these people vote... And they want to get the government out of their medicare.
