Reasons why the "invisible hand" doesn't work in the health care sector

[CultureCitizen]

Of course, health care costs are decreasing wherever the invisible hand has not been replaced by the hand of father Karl Marx.

Poof?
Do you have any documented example of a country where "health care costs are decreasing" and it is run primarily by the private sector ?

 

[EdwardBaiamonte]

Has it occured to you that insurance works as a buffer which diminishes competition , drives more money into the system and creates inflation ?

no dear, it has not occured to anyone with half a brain. What diminishes competition is liberals making it illegal with McCarran Furguson in 1946, and with many other measure like Medicare and Medicaid VA Tricare Schip, etc etc.

See why we say slow?

 

[EdwardBaiamonte]

Of course, health care costs are decreasing wherever the invisible hand has not been replaced by the hand of father Karl Marx.

Poof?
Do you have any documented example of a country where "health care costs are decreasing" and it is run primarily by the private sector ?

dear, we are the most capitalist country and even we have socialist medicine so there are few good examples.

It stands to reason though that when people shop with their own money they shop more carefully. and when providers must compete on basis of price and quality their price and quality will get better and better. Do you understand how competition works, why TV and computers get better not worse?? Isn't thinking fun??

 

[dblack]

competition drives prices lower and lower. Econ 101 dear!!

Has it occured to you that insurance works as a buffer which diminishes competition , drives more money into the system and creates inflation ?

Economy 102!

That liberals don't know competition ? WTF. Do you think I work in the public sector ?

The reason is that the invisible hand has been replaced by the very visible hand of government. It's pretty ridiculous to think government can make anything inexpensive. Why need taxes if you are more efficient than the private sector?

Of course, health care costs are decreasing wherever the invisible hand has not been replaced by the hand of father Karl Marx.

Residing in a country with both public and private health care I know that the private sector is a lot more efficient than the public... And in addition there is no line that lasts six months. What is the reason everyone is always comparing the private system in USA to that of a other country. Would it not be more honest to make an apples apples comparison?

The false promises sold to us by the insurance industry and state regulators have created an upside down market, where consumers have no incentive to look for less expensive service, and expectations of limitless care.

 

[EdwardBaiamonte]

consumers have no incentive to look for less expensive service,.

now even the liberal can agree that capitalism would work, but that's impossible because a liberal will lack the IQ to understand capitalism?

 

[CultureCitizen]

It stands to reason though that when people shop with their own money they shop more carefully. and when providers must compete on basis of price and quality their price and quality will get better and better. Do you understand how competition works, why TV and computers get better not worse?? Isn't thinking fun??

Baiamonte , througout the thread the reasons why this doesn't happen in the healthcare sectore have been discussed.
1. Very inelastic demand
2. High information asimetry
3. Inflation caused by the insurance companies.
And I will have to add:
4. Posible cost transfers caused by medicaid and medicare ( I have yet to find a link to proof this point ).

These four factors are more than enough to make the healthcare market behave in a rather unruly way. I do understand how market works, but it seems inelastic demand , information asymetry ,oligopolic competition and externalities seem to be beyond your grasp.
You argue as if every market was played under the conditions of perfect competition...and I am tired of pointing out that this ideal model with which you seem to be rather infatuated doesn't allways occur in the real world.

Perfect competition - Wikipedia the free encyclopedia

These are the factors that do not exist in the healthcare area :

A large number buyers and sellers - no
No barriers of entry and exit
Perfect factor mobility
Perfect information -no
Zero transaction costs
Profit maximization
Homogeneous products - no
Non-increasing returns to scale -no
Property rights
Rational buyers
No externalities -no

Hence the market behavior deviates from one in which pareto eficiancy can be achieved.

 

[EdwardBaiamonte]

1. Very inelastic demand

do you enjoy always being a stupid liberal ! Of course there is ineleastic demand when capitalism is illegal!!

 

[EdwardBaiamonte]

3. Inflation caused by the insurance companies.

totally stupid and liberal. Insurance companies don't print money so they cant cause a rise in the general price level. Econ 101 class one day one. Did you ever think of college?

 

[EdwardBaiamonte]

You argue as if every market was played under the conditions of perfect competition..

dear, conservative intellectuals want perfect competition while liberals want communism. Those are your ABC's. Are you catching on yet??

 

[Mr Natural]

1. Very inelastic demand

do you enjoy always being a stupid liberal ! Of course there is ineleastic demand when capitalism is illegal!!

And where is capitalism illegal?

That's right, the Soviet Union, Cuba, and the United States.

Idiot!

 

[EdwardBaiamonte]

this ideal model with which you seem to be rather infatuated doesn't allways occur in the real world.
.

if I said it always occured I'll pay you $10,000. Bet? or run away with your liberal strawman between your legs.

 

[EdwardBaiamonte]

And where is capitalism illegal?

its illegal in American health care thanks to McCarrun Ferguson and other measures.

Still over your head?

 

[CultureCitizen]

totally stupid and liberal. Insurance companies don't print money so they cant cause a rise in the general price level. Econ 101 class one day one. Did you ever think of college?

Oh man,
Last attempt to get you past economics 101.

Economics Basics Monopolies Oligopolies and Perfect Competition Investopedia

In an oligopoly, there are only a few firms that make up an industry. This select group of firms has control over the price and, like a monopoly, an oligopoly has high barriers to entry.

Oligopoly Pricing Models

Cartel Model

If the dominant firms in an oligopoly can successfully collude to fix prices, then they can be certain of each other's output, which will allow to maximize their profits by producing that quantity of output where marginal revenue equals marginal cost, just as it would be for a monopoly. However, if any of the firms cheat, then a price war may ensue, lowering the profits of all firms, and maybe even causing them to operate a loss. In most modern economies, collusion is generally against the law, however there are certain countries that engage in collusion to maximize their profits from their natural resources.

See , no money printing was involved, you only need an oligopoly with a cartel model.

 

[EdwardBaiamonte]

totally stupid and liberal. Insurance companies don't print money so they cant cause a rise in the general price level. Econ 101 class one day one. Did you ever think of college?

Oh man,
Last attempt to get you past economics 101.

Economics Basics Monopolies Oligopolies and Perfect Competition Investopedia

In an oligopoly, there are only a few firms that make up an industry. This select group of firms has control over the price and, like a monopoly, an oligopoly has high barriers to entry.

Oligopoly Pricing Models

Cartel Model

If the dominant firms in an oligopoly can successfully collude to fix prices, then they can be certain of each other's output, which will allow to maximize their profits by producing that quantity of output where marginal revenue equals marginal cost, just as it would be for a monopoly. However, if any of the firms cheat, then a price war may ensue, lowering the profits of all firms, and maybe even causing them to operate a loss. In most modern economies, collusion is generally against the law, however there are certain countries that engage in collusion to maximize their profits from their natural resources.

See , no money printing was involved, you only need an oligopoly with a cartel model.

dear you were talking about inflation, but now you have changed subjects?? Do you understand?

 

[CultureCitizen]

dear you were talking about inflation, but now you have changed subjects?? Do you understand?

Baiamonte,
I did not change subject.
1. You posted " Insurance companies don't print money so they cant cause a rise in the general price level"
2. I posted a reference showing that in oligopolic competition with a cartel price model , there can be collusion to fix prices.Thus creating a price increase in primes.This increases the price level, because it is a component of the healthcare goods and services.
It follows that this price level increase is not related to money supply ( monetarsts tend to think the main reason for inflation is money supply for an area).

I find it both disquieting and annoying that you could not follow my argument, and on top of that ended your post with : do you understand?

 

[EdwardBaiamonte]

dear you were talking about inflation, but now you have changed subjects?? Do you understand?

Baiamonte,
I did not change subject.
1. You posted " Insurance companies don't print money so they cant cause a rise in the general price level"
2. I posted a reference showing that in oligopolic competition with a cartel price model , there can be collusion to fix prices.Thus creating a price increase in primes.Thus increasing the price level.
It follows that this price level is not related to money supply.

I find it both disquieting and annoying that you could not follow my argument, and on top of that ended your post with : do you understand?

too stupid you stopped using the word inflation after you looked it up thus changing the subject to not about inflation!! Slow??

 

[EdwardBaiamonte]

It follows that this price level is not related to money supply.

dear, given a fixed money supply if they raise prices other prices have to go down, thus no inflation. Econ 101

 

[CultureCitizen]

dear you were talking about inflation, but now you have changed subjects?? Do you understand?

Baiamonte,
I did not change subject.
1. You posted " Insurance companies don't print money so they cant cause a rise in the general price level"
2. I posted a reference showing that in oligopolic competition with a cartel price model , there can be collusion to fix prices.Thus creating a price increase in primes.Thus increasing the price level.
It follows that this price level is not related to money supply.

I find it both disquieting and annoying that you could not follow my argument, and on top of that ended your post with : do you understand?

too stupid you stopped using the word inflation after you looked it up thus changing the subject to not about inflation!! Slow??

The inflation is the increase in the general level of prices for a given set of goods or services !!!
It doesn't matter I changed it because its exactly the same !

 

[EdwardBaiamonte]

dear you were talking about inflation, but now you have changed subjects?? Do you understand?

Baiamonte,
I did not change subject.
1. You posted " Insurance companies don't print money so they cant cause a rise in the general price level"
2. I posted a reference showing that in oligopolic competition with a cartel price model , there can be collusion to fix prices.Thus creating a price increase in primes.Thus increasing the price level.
It follows that this price level is not related to money supply.

I find it both disquieting and annoying that you could not follow my argument, and on top of that ended your post with : do you understand?

too stupid you stopped using the word inflation after you looked it up thus changing the subject to not about inflation!! Slow??

The inflation is the increase in the general level of prices for a given set of goods or services !!!
It doesn't matter I changed it because its exactly the same !

no dear inflation is an increase of the general price level. When treasury reports the CPI they survey a general and representative list of goods and services. Dear, you cant fake having been to college. Anyway, next subject. I want to help you on more important subjects like the 80% drop in health care costs under capitalism.
We can begin your lesson again tomorrow.

 

[CultureCitizen]

dear you were talking about inflation, but now you have changed subjects?? Do you understand?

Baiamonte,
I did not change subject.
1. You posted " Insurance companies don't print money so they cant cause a rise in the general price level"
2. I posted a reference showing that in oligopolic competition with a cartel price model , there can be collusion to fix prices.Thus creating a price increase in primes.Thus increasing the price level.
It follows that this price level is not related to money supply.

I find it both disquieting and annoying that you could not follow my argument, and on top of that ended your post with : do you understand?

too stupid you stopped using the word inflation after you looked it up thus changing the subject to not about inflation!! Slow??

The inflation is the increase in the general level of prices for a given set of goods or services !!!
It doesn't matter I changed it because its exactly the same !

no dear inflation is an increase of the general price level. When treasury reports the CPI they survey a general and representative list of goods and services. Dear, you cant fake having been to college. Anyway, next subject. I want to help you on more important subjects like the 80% drop in health care costs under capitalism.
We can begin your lesson again tomorrow.

Here we go again.
Inflation -a sustained increase in the general price level of goods and services
Price level - The average of current prices across the entire spectrum of goods and services produced in the economy. In a more general sense, price level refers to any static picture of the price of a given good, service or tradable security

Now explain me how an increase in the prices of healthcare does not affect the "general price level"?
¿Because of money supply? ¿You forgot about credit cards uh?

http://www.nrlc.org/uploads/medethics/MedicalInflationOutpacesCPI.pdf