Not all emergency room decision-making happen with blood pumping out of your pulmonary artery. There are parents who take their babies to ERs, and through repeat business decide to like one better (maybe because it's cheaper, maybe because it's a bit more expensive, but never have any waiting time) than the other. There are consumer reporters who will look into why one hospital is cheaper than the other. Smart phone "Yelp for hospitals".
EDIT: Forgot the conclusion: This will drive down prices in the general case, which will also result in lower prices for the emergency case, even if in an emergency you don't have the luxury of calmly evaluating all the options.
> Also, how shall people make an initial determination on care when no diagnostics have yet to be performed?
The same way you decide which restaurant to go to before you know exactly which dish to have: Ranking by a general cost/quality scale.
I wouldn't bank on free markets fixing emergency room problems. While anecdotally some parents may choose to take their children to one hospital or another, I doubt this is a statistical norm. I imagine most people choose the nearest emergency room for most emergencies, and hold off for an appointment with a doctor otherwise. Sometimes, it's just a baby with colic. But sometimes (increasingly in a country with a serious obesity problem) it's a heart attack, and no one is going to drive their dad 45 minutes to the cheap hospital when the one that will save his life is 10 minutes away. Because of this I don't think hospitals have any incentive to drive down ER costs.
But maybe I'm projecting, since my experience with ERs tends to be "Oh shit... get me to a hospital now Google Maps" rather than "I should Yelp some reviews of hospitals, because I have time."
Of course it's hard to predict what will happen. But right now, nobody has an incentive to even check, so obviously it doesn't happen.
Some people will live 10 minutes from one ER and 45 from the next. But some will live 25 from one and 30 from another. Or have three within 15 minutes (ie. short enough that they're equidistant for "the baby has colic"). Some will have more time than money and drive 45 minutes if it means saving $20.
But there's another factor in free markets you're not accounting for: new entrants. If an ER charges high rates because they're the only player in the area, someone could set up a competing ER and charge less.
I love how easy everyone always makes this sound. Yeah, just setup a hospital near the other hospital and make your prices lower. I'm sure they wouldn't respond by lowering costs until I'm driven out of the market and then immediately raise them again.
And amazingly we still have businesses that compete and don't price all their competitors out of business. So I don't think this is an obvious conclusion.
Or it could actually have nothing to do with regulations. Something called imperfect competition: very few people want and sell the exact same thing. That makes it very difficult to sell superior products at lower cost.
As far as I can tell it is very difficult to prosecute for predatory pricing in the US. This doesn't particularly matter, since it is an awful idea and almost no businesses would do it anyway.
Doctors have no idea how much a procedure or test cost (and they don't care or want that burden)--that stuff is generally insulated by insurance. In my experience, they are vaguely aware of the price of different prescriptions (after insurance) because that directly affects the patient. The economic forces are all out of whack. I'm not blaming doctors--the information should be more easily available to them to provide to the patient.
I'm not in the medical industry (but my g/f was seeking out her own insurance recently), but I would guess that the ER would work similar to a car mechanic. Where the paperwork you're already signing upfront includes a flat price you're paying for diagnostics. Then after the diagnostics (or possibly at the same time you signed the diagnostic paperwork), you agree to a price range for treatment/tests. It would itemize the fixed costs and estimate the variables. If things go outside of that range, there's an amendment. You walk home with the bill.
In actuality, it would be: "Each blood test paid by insurance company $A costs $X, Each blood test paid by insurance company $B costs $Y." Etc.
I really think a big part of the problem in healthcare pricing is insurance company policies regarding networks and guaranteed volume. Your auto insurance doesn't demand you use a certain body shop, why should your health insurance?
Here's a practical example that recently came up for me. My wife is a nurse at a few clinics. At one clinic, she's got health insurance and that clinic provides IUDs via their hospital, which she wanted to get. At this clinic, the price billed to her insurance would be $4700.
At another clinic she works at, she could get the same IUD brand and procedure for $600.
When she asked her insurance about it, they said they would pay 100% of $4700 in-network but 60% of $600 out-of-network. Obviously, being selfish, she decided to let the company eat the $4100 they would otherwise save so that she would pay $0 instead of $240.
Because that $4700 isn't the cost the insurance company is paying. The real reason you can't go without insurance in the US is they're negotiating steep discounts - where I live it's supposed to average 80%.
It may well be they paid less than $600 for a procedure that lists at $4100.
And of course the government numbers don't take this into account, so what they've published is pretty much worthless.
I doubt it. That $4700 is what was listed in the insurance packet, then again in the bill along with a few other minor expenses incurred during the procedure, and finally paid for by insurance in a later notice to us. The 100% is because of ACA requirements.
I don't disagree with you that insurance companies negotiate different discounts, though, which is what I was trying to get at in my post regarding pricing.
>That way patients can ask the doctors if the tests are actually needed.
How does this work? If a doctor prescribes a blood test, he's already said it's needed. Put yourself in a doctor's shoes for a minute. You told the patient he needs a blood test. Then he asks you whether it's actually needed.
How can you possibly say "Nah, just kidding. We don't need that one"?
>Doctors order tests to help them choose the right treatments.
No they don't, except in very rare cases. Doctors order tests to make a diagnosis. The treatment follows from that.
>If they have absolutely no idea what the possibilities are then they wouldn't be ordering tests anyway.
I'm not sure a doctor would have "no idea what the possibilities are" unless you don't have any symptoms. If you don't have any symptoms, why are you at the doctor's office?
> > Doctors order tests to help them choose the right treatments.
> No they don't, except in very rare cases. Doctors order tests to make a diagnosis. The treatment follows from that.
What I said didn't contract what you said. If test => diagnosis => treatment then test => treatment.
Overtesting is more or less a thing in the U.S. Many tests are not harmless, so even a person who carries an infinite amount of money around would do well to question the necessity of tests.
I don't believe that. Over the years I've had to fight to get tests that turned out to be important, and I'm suspicious of government studies showing "overtesting" right when the government is in the process of taking over health care.
You can certainly eliminate a lot of testing without affecting mortality rates significantly. But that's because in absolute terms a lot of extra people have to die before mortality rates are affected significantly.
