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Comment by misja111 | Hacker News Reader

This is how capitalism works. When demand exceeds supply, the price will go up. Healthcare is a different product than, say, apples. You only want a certain number of apples per day. But when it's about getting healthy, the limit to what you'd be willing to spend is what's on your bank account. Give such an incentive to some health companies and they'll find a way to get the maximum out of you. Healthcare in the US is expensive simply because US citizens, on average, have a lot of money to spend.

Capitalism is great, as long as there is some amount of regulation. And healthcare is an area where this is definitely needed.

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Spending more isn't necessarily a bad thing. If you just look at raw spending numbers, it looks healthcare has gotten much more expensive since ~2010.[0] But if you look at Healthcare spending as a percentage of GDP, it's been flat over the same period.[1]

With that in mind, in what sense is rising spending on healthcare a negative? Isn't this exactly what we'd expect in a functioning market economy -- that folks with more money[2] will spend more money on stuff, including healthcare?

For example, when we look at raw spending numbers in any other area (food[3], for example) we also see rising spending in absolute terms. Does this signal a failure of capitalism w/ regards to production and distribution of food? Obviously not.

[0] https://www.statista.com/statistics/184955/us-national-healt... [1] https://www.statista.com/statistics/184968/us-health-expendi... [2] https://fred.stlouisfed.org/series/MEHOINUSA672N [3] https://www.statista.com/statistics/237211/average-food-expe...

> But when it's about getting healthy, the limit to what you'd be willing to spend is what's on your bank account.

This sparked an interesting conversation between me and my half-sister. She said the following:

"Here's a lot of why people are angry - lets say I get a form of cancer that could be cured, but the cost is $200,000. But I'm 19 years old, come from a poor family who can't afford insurance, can't afford insurance myself, and haven't even had a chance to make $20,000 in my life, let alone $200,000.

Now I'm using a 19-year old as an example, but morally the dynamics don't change even if I'm 89 - it's not like I wanted to get cancer.

Talking about economic systems in this type of situation rings very hollow. And it makes people question why they should be a member of such a society or defend it. Capitalism is so great that it must constantly and relentlessly defended with online posts on all platforms."

I don't agree with my half-sister. People died of horrible, curable diseases in communist/socialist regimes as well, and they couldn't really even try to use wealth to improve their situation unless they were corrupt.

I really think the problem is that individuals are just not being capitalistic enough with healthcare. Healthcare companies are publicly traded and you can buy stock in them, and since people always need healthcare, it's a great way to build assets which you can then use to purchase healthcare later. It might even be a good idea to replace social security with government stock purchases in healthcare companies.

Most poor families can afford medical insurance, either through state Medicaid programs or using subsidies available on state exchanges. Overall the USA is at or near the top of countries in terms of 5-year cancer survival rates. We're actually doing better than countries with socialized healthcare systems, although there are problems with access and cost that should be fixed.

As an asset class, healthcare companies don't consistently have a higher ROI than any other sector. Regular people should generally diversify their investments with broad index funds rather than making concentrated bets in a single sector.

> When demand exceeds supply, the price will go up.

Are you suggesting that healthcare is demand elastic?

isn't it? I know several people who opt to not carry healthcare insurance (since the penalty was dropped) because of the cost, but would carry if it were reasonably priced outside of the employer market.

I'm referring to healthcare specifically, not the insurance market.

Yes it is, at least, what is sold as 'healthcare' is. I live in Switzerland and I see the same happening here. For European standards, healthcare is crazily expensive. For example, when I want to buy paracetamol, I pay around 8 times as much as in my birth country, the Netherlands. The product, paracetamol, is exactly the same. What's more, many of the pharmaceutical companies that are producing it are based in Switzerland! The reason it costs this much more here is simply that people are willing to spend more money. And the healthcare industry is more than happy to absorb that demand.

None of anything you said indicates demand elasticity.

Healthcare is notably inelastic. Do people eat more 8x more paracetamol in the the Netherlands than in Switzerland, because it's a better deal? No I suspect they both take it for pain when they have pain. That's demand inelasticity.

Demand can also mean, willing to pay more for the same kind of product.

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