I don't know that I can agree with the political tones of the video, I do think that they have a point when the prices differences are illustrated. Why have prices gone beyond as high as twice to ten times the cost?
The physician (Dr. Smith) points out that the third party insurance payers are to blame. The physician then points out that administrators and larger hospitals like the new regulations because the regulations are hurdles that small companies cannot afford to overcome. When most people assign blame for the high prices of surgery they go back to Kenneth Arrow and his concepts.
Kenneth Arrow states there are a few problems with the economics of healthcare
- Unpredictability-My Translation You don't know when you will get sick
- Barriers to Entry- My Translation higher fees because it takes a lot to become a doctor
- The Importance of Trust- My Translation healthcare providers need to be trusted which cost people that need healthcare more money
- Asymmetrical Information- My Translation normal people are not as smart as doctors
- Idiosyncrasies of Payment- My translation because normal people don't know as much as doctors and we use insurance companies as long as the bill is paid we don't care about the cost
Dr. Smith then states that one of the signs of crony capitalism is the consolidation of firms and that there is a lack of free-market capitalism at play. When you examine the health industry in the United States one would quickly see that a majority of the hospitals are run by not for profit entities. According to the American Hospital Association roughly 20% of the hospitals are for profit hospitals.
Without the places like the Surgery Center of Oklahoma we can expect to start spending more time waiting on care. I hope concepts like this Outpatient Center can disrupt the old model of outpatient surgery.
I ran across this video and saw a glimmer of hope in what I think is innovation in the world of healthcare and ultimately more affordable healthcare.
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