We Americans pay 50% more for our healthcare than the citizens of any other major country – about $3,600 per person per year too much.
Its a black box market: the people who actually pay for healthcare pay into a black box (depicted below as the “Industrial Medical Complex”); healthcare services come out at the other end.
We might not mind what happened in the black box if healthcare costs were reasonable, but they are not.
So peering into the black box, what do we find?
It’s a market in which the payer for healthcare, Americans, are kept well away from the buying and selling of health services: the normal market tension between the customer and the supplier, necessary for the discovery of pricing in any market, does not exist and so the market does not work properly and the customer pays too much.
Nowhere is the dysfunction of this market more evident than in pharma [Pharma].
