Sure, they factor each element into the price.
Joe Flower
33

Fee-for-service is precisely the root of the problem.

When we buy something, we are buying with a particular, unified expectation. I love the body shop example, because it highlights that we as buyers perceive value based on what is delivered, not the resources that went into it. We care not if the body shop used premium or discount sandpaper. We don’t care which primer and paint are used as long as the results are a proper repair. And we don’t care if the labor cost is $100/hr or $30/hr. What we are about is a particular outcome at a “reasonable” cost that we can compare to know we aren’t getting ripped off.

Free market forces could be brought to bear if customers were allowed to pay for outcomes rather than inputs. Think of a healthcare model that adopted some of jet.com’s strategy. An office visit costs a certain price, unless you are willing to wait 2–4 weeks, then it will cost less by some amount. X-ray cost this much, unless you want them on the latest Siemens digital machine, in which case it will cost more by X amount. Let people choose their own combination of “fast, cheap, good.”

Heck, even when I buy auto parts I have options. I can buy standard cast iron rotors or upgrade to ductile iron parts less likely to crack or warp. I can buy genuine parts from the OEM manufacturer, or 3rd party, will-fit parts. I can even choose a standard tire balance or upgrade to a Roadforce balancing on the special Hunter machine.

Single payer is no panacea. They key is to create all the good incentives and competition that would result in a free market while protecting consumers from the oligopoly that has emerged in healthcare. (tacitly with government tolerance, if not outright inducement).

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