Just to elaborate, the solution to production/consumption being close in time problem is information and reputation. Sites like Angie's List are a good start, but probably work better for things like hiring a plumber or mechanic, since the evidence is just anecdotal and doesn't tell the whole story. What medicine needs is a a tally of outcomes that physicians advertise.

Cool, I'll try to read it later today.

This. I don't even understand the question. Are we supposed to say "gee, ACism didn't magically prevent a landslide, obviously it's a total failure and anyone who supports this is a moron"?

You might as well ask "what happens to people like this if NBC doesn't fire Conan and move Leno back to 11:30?"

This is an interesting topic. Whilst I'm most sympathetic towards 100% free market health care, the retort about the uniqueness of healthcare is, on the face of it, quite convincing e.g.

I guess from a Hayekian perspective, the more complex healthcare is, the more appropriate free market provision is. But are we not oversimplifying things by implying healthcare is just like any other commodity/service? Isn't Peter Schiff (for example) being overly simplistic by comparing price trends in healthcare with telecommunications without taking into account other variables/factors as Double Eagle mentioned? Shiff's argument seems to lack the thoughtfulness (/jargon) of the textbook economists, although that could be a good thing of course.

Common sense seems to suggest that the health care consumer is in a less favourable position (e.g in terms of information) than that of the telecommunications consumer making the two somewhat incomparable.

On an aside, I literally lol'd at Fly's only contribution to the thread:
brilliant...

The conclusions I'm drawing are that the basic structures of health care in this country are more or less the natural evolution of the major participants' incentive to establish positions which maximize their rent seeking opportunity, an opportunity which flows from the combination of the consumer's very high preference to stay alive and the natural position of trust a doctor occupies.

If anything Arrow misses the mark by downplaying the extent to which the providers' profit incentive influences their behavior.

You can probably guess why we don't have those today. I fail to see why a free market would provide any greater incentive for providers to do so.

The structure of the US health cares system is first and foremost dictated by the guild system of licensing and restricting the supply of physicians. Do you really think that in the absence of such restrictions on the supply and type of medical practitioners the medical system would look similar to the way it currently does?

I can't, why don't you tell me.

edit: Well that's not entirely true. I think it's due to the culture of physicians and inertia. Physicians simply don't advertise their products or have any need or motive to do so, outside of a few fields like eye surgery. Their pay doesn't depend on it, they do great without doing so because of the restriction on the supply of physicians they enjoy. But in a free market they certainly would feel pressure to differentiate their services from those of their colleagues.

Did I miss the part in the OP where guild-like behavior is made illegal? I can not foresee a situation with multiple competing certification agencies that lasts for very long, individual hospital networks would most certainly insist on a common certification, and eventually one of those standards will become the standard across the industry. Once in such a position the agency is highly likely to be co-opted to serve the interests of the provider community (see the financial ratings agencies) and do most of the same stuff that the AMA has been doing for decades. You need to treat the market participants as rational, they are certainly not going to be blind to the structures that make them the most money - tightly controlled certification standards are easy to sell to the public (indeed become justification for the value doctors provide) while simultaneously maximizing income. I don't see how it could evolve any other way frankly.

Why in the world wouldn't hospitals be willing to accept different accreditation standards?

http://en.wikipedia.org/wiki/Network_effect

Because getting sued is no fun, and standardizing on a common certification across a hospital network removes one risk variable for the network.

The government is not required for standardization, fwiw.

It is possible there would be a dominant licensing body but there would still be the threat of competition if that body abused its position too much. There is no way they would be able to restrict the supply of physicians to the degree we see in the US today. The AMA is infamous for attempting to shut down any group (DOs until the AMA Borged them, chiropractors) that attempt to do something resembling practicing medicine.

Once ensconced as the standard, there would likely be very little competitive pressure that can be brought to bear - remember that the providers have a large interest here and whatever downsides there are to the consumer can be effectively rationalized in the same manner they are today.

Another common theme of this forum, things that are hard to understand aren't true.


I know you think you're cleverly refuting the "without mother government everyone will say they are a doctor omg", but what you're actually doing is explaining that contrary to the OP government is not the reason why there is a single dominant medical accreditation service.

Erm no I was pointing out to DE that a government isn't required for standardizing across a given hospital network.

And as it stands now, the reason why there is a national single dominant medical accreditation is due to the government.

I just don't think that is true at all. The barriers to entry for a group of physicians who think they could provide better training wouldn't be prohibitive at all. You don't have to convince everyone, just a single network or hospital. Or for certain specialties -- say hernia repair -- only a single clinic. I remember reading an article about a hernia repair clinic that had better results than anyone with that procedure. They took doctors straight out of intership (1 year removed from medical school) and trained them how to perform one surgery, hernia repair. After a few months training they were doing like 10 a day and minting money. There is no reason these guys even needed to go to medical school. But they had to because of the monolithic licensing requirements.

In a truly free market licensing might be standardized but bottom-up rather than top-down. Instead of granting someone a certification to practice all types of medicine, you might get certification to do a single procedure. That seems far better suited to modern medicine.

This is pretty standard stuff. Look at a market, see if the government is involved and then assign responsibility for all sub-optimal outcomes to the government's intervention while completely ignoring the preferences of the other market participants.

I realize this is a tired refrain, but have you considered the possibility that you have no idea what you're talking about?

What is the name of this single dominant medical accreditation? Why does it exist?


Yeah, there's no such thing as a certification to practice all types of medicine.

Sure there is. The MD. Anyone who has an MD can practice whatever form of medicine he wants. Well I guess he has to finish his internship.

Fly,

Please just explain the economic reality. I know you derive most of your pleasure in posting from mockery of ideas that you (perhaps rightly) consider ill-informed, but it would be very helpful for others to understand how the inherent characteristics of the market, not government intervention, have lead to the status quo. If you already know why that is true, just share it with the forum. It might be less fun than your usual semi-trolling, but you're clearly smart enough to contribute to the economic discussion, and I at least would appreciate acquiring the knowledge you bring to bear.

We've gone over this stuff like 45 times with all the same people, mostly recently like three days ago, or arguably earlier in this thread. What's the point?


Basically, ACists(because they view the government as a monolithic force of evil that exists solely to steal freedom) are incapable of understanding how the preferences of market actors can be expressed not just in the presence of government but also by government action itself.

Parallel to that is how little they prize actually knowing things about the real world, and it combines to an environment where every thread gets tarded up. I mean, the MD is just the degree medical schools give out, for God's sake. What sort of dialogue are we supposed to have here?

I suppose I've missed it. Send me a PM if you have the time.

The MD is not just a degree medical schools give out. If you don't have an MD or DO you cannot legally practice medicine in the US. It is a prerequisite of membership to the medical guild.