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June 21, 2010


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The problem with using any type of pricing and market system to control healthcare costs is that you have a relatively inelastic supply meeting a relatively inelastic demand, so the normal operation of market forces to set rational prices fails. On the supply side, you have monopolistic guilds of healthcare providers, a small field of pharmaceutical giants, excessive patent protection for drugs and devices, and a powerful clique of healthcare lobbyists who ensure that the government cooperates with the providers' interests in regulating the market. On the demand side, you have consumers seeking goods and services which are not discretionary choices, so they typically cannot afford the time lost in comparison shopping, bargaining, or delaying treatment until the price comes down. With so much emphasis now on preventative care as the primary way to lower medical costs, the assumption that it would be a good cost control device for medically naive patients to perform their own triage based on medically irrational factors like costs is absurd. In Cosgrove's example, the patient staying at home and taking aspirin because he finds a neurological exam too expensive may massively inflate the ultimate cost of his care by postponing early intervention in a serious condition which he is not equipped to diagnose. Unless consumers know as much about medicine as they are told about the costs of services, the pricing information will operate in a vacuum where patients cannot perform an intelligent cost-benefit analysis.

It is worth noting that in all the public healthcare systems of the world, the cost of healthcare ranges from around 7% to 11% of GNP without using the recommended pricing mechanism and market forces. This is because the single government payer has the power to control the demand for reimbursement from pharmaceutical companies, medical device manufacturers, hospitals, and medical professionals. For every dollar spent, one dollar goes to patient care, rather than 80 cents as in private healthcare systems where about 20% of the costs are skimmed off as profit. Prices are most sensibly controlled in the public interest by governments, which can keep prices down without the risks involved in medically naive patients making their own cost-effectiveness guesses, or doing without care simply because they cannot afford it, as under heavy co-payment insurance systems.

roberta mikles

"""We offer all in-patients 24-hour access to their medical records, which they can also retrieve from home on our web site, """" I was particularly glad to see this mentioned as that which they offer. In the past, in attempting to access records, we have been met with 'you are looking for mistakes to sue us', or 'what do you need the medical records for, you don't need them'. It would be nice if dialysis patients received copies of their medical records routinely. I know of too many patients/families who have had to fight to get copies of their medical records.
Roberta Mikles RN
Patient Safety Advocate

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