Tuesday, 23 November 2004

Third party payers in medical care

Alex Tabarrok has an excellent post that explains the reason that the cost for most medical procedures skyrockets: third-party payers, including both government and private insurance.

Why the price decline in this market and not others?  Could it have something to do with the fact that laser eye surgery is not covered by insurance, not covered by Medicaid or Medicare, and not heavily regulated?  Laser eye surgery is one of the few health procedures sold in a free market with price advertising, competition and consumer driven purchases.  I’m seeing things more clearly already.
Makes sense to me and one of the reasons I’ve supported the idea of MSAs for so long. The more we marginalize third parties, the better off we will be. There are even some insurance companies that see the wisdom of this approach, such as Lumenos and Health Market. I hope they prosper in the coming years.
# By Robert Prather @ 7:32 pm CST [Permalink] « (0)
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Tags: Economics, Medicine
 

2 comments:

Any views expressed in these comments are solely those of their authors; they do not reflect the views of the authors of Signifying Nothing, unless attributed to one of us.
[Permalink] 1. Brock Sides wrote @ Tue, 23 Nov 2004, 11:16 pm CST:
Laser eye surgery is one of the few health procedures sold in a free market with price advertising, competition and consumer driven purchases.

I’d be hesitant to draw too strong a conclusion from one data point.

What about other elective surgery, such as boob jobs, nose jobs, facelifts, etc.?

 
[Permalink] 2. Robert Prather wrote @ Tue, 23 Nov 2004, 11:42 pm CST:

It’s a good point and hopefully it will be looked into. The one thing I would be concerned about in trying to compare the procedures is that the others are more cosmetic, and less practical, than eye surgery. Any study that compared them would have to bear that in mind. The nice thing about using eye surgery is that it has become commonplace. Even so, the point is well taken.

 
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Signifying Nothing formerly featured the stylings of Brock Sides, a left-leaning philosopher turned network administrator currently residing in Memphis, Tennessee who now blogs at Battlepanda, and Robert Prather, a libertarian-leaning conservative economist and occasional contributor at OTB.

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