Saturday, November 29, 2008

Low-Cost Medical Tourism vs. The High Prices of the Two Cartels: Big Insurance and Big Medicine

Medical Tourism is a spontaneous order or sorts that has grown steadily to escape the increasingly high prices of the cartelized U.S. health care system. A cartelized system is one where price discovery is prevented or impeded, and I can't think of a better example of than the U.S. health care system, where one cartel, the Insurance Industry (MP: "Big Insurance"), negotiates prices and services with another cartel, the Medical Industry (MP: "Big Medicine").

This "Health Care Insurance Model" is, of course, protected and encouraged by the State, which not only enforces the high barrier of entry into either cartel, but also treats health insurance as a non-taxable employment benefit compared to income. It should be no surprise that "cartel pricing discovery" results in a "crisis" in terms of the "high cost of health care."

Today, the high prices of the cartelized health insurance model has now led many to adopt the language of "rights" when it comes to health care. Typically, high prices are not blamed on cartelization, but rather on market failure, for example, on "information asymmetry," or "inelastic demand," or whatever. However, if high prices were truly a case of market failure, then, obviously, there should be no medical tourisim market. That there are such markets indicates empirically that high prices have nothing to do with market failure, and thus appeals to health care as a positive right, i.e, a "coercive claim," should be examined skeptically. The more statists chirp about the "right" of health care, the more the medical tourism markets seem to exponentially expand.

~"Free Market Medicine"

HT: Ben Cunningham


At 11/29/2008 1:30 PM, Anonymous Anonymous said...

How about this:

Where government hinders the operation of a free market, consumers priced out as a result have a right to compensation to restore them to the position they would have enjoyed under a free market.

I came up with this idea earlier in the context of housing, but it also applies to health care.

At 11/29/2008 4:10 PM, Blogger karsten said...

A large part of the conundrum is the explosion of medical advances that gives health care practitioners increasingly more powerful and more numerous diagnostic techniques to image tissue, detect markers for disease, and narrow down etiological factors underlying illnesses. These new techniques that are now part of a diagnosticians quiver are increasingly costly to perform and the jury is still out whether many of the newest diagnostic aids actually correlate to increased accuracy of diagnosis, but one thing is for certain; what diagnostics are considered to be consistent with the ‘standard of care’ is becoming more and more difficult to ascertain. The industry tasked with determining what is standard of care, and therefore what healthcare everyone is entitled to receive are simultaneously determining what standard of care treatments they are able charge insurance providers for administering. Taken by themselves, advances in medicine are a good thing, however, the waters are made a tad bit murkier when considering that the increased cost of testing prices many people out of healthcare as a whole and that many of the new diagnostics have not been statistically proven to improve patients’ prognosis.

At 11/29/2008 4:25 PM, Blogger bobble said...

LOL. finally, an offshoring concept i like.

At 12/01/2008 2:38 AM, Blogger sethstorm said...

Given that medical tourism ends up going to unstable third world countries - no. At least here, I'd have the chance to look for a state-school-educated, multigenerational citizen doctor.

Where government hinders the operation of a free market, consumers priced out as a result have a right to compensation to restore them to the position they would have enjoyed under a free market.

The problem is that they'd be given a higher price and/or lower class of service for their troubles.

At 12/03/2008 2:10 AM, Anonymous Anonymous said...

Thanks for the info its all very useful.


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