No. of Recommendations: 3
Price equilibrium is far from an assumption. It's a proven reality backed by hundreds of years of economic outcomes across hundreds of millions of products.
And hundreds of years of economic outcomes across hundreds of millions products also show that price equilibrium doesn't always happen, and that many markets have failures that require interventions.
Efficient markets are an assumption of Econ 101, but it's an assumption that gets abandoned in more advanced economic analysis because it doesn't always hold true in the real world. Health care markets strongly exhibit characteristics that lead to failures in market mechanism, including:
1) Asymmetric access to information, coupled with high costs of acquiring information;
2) Non-fungible goods or services;
3) Third-party payors; and
4) High levels of externalities.
There is no reason at all to assume that a market for health care services would look like the market for, say, raw lumber or white cotton t-shirts.
And is the medical market completely unregulated? Hardly.
True, but the regulations aren't ones that we would normally expect to interfere with private parties' decisions to disclose or not disclose prices. Whether on the producer side (providers seeking customers by competing on price) or on the consumer side (patients demanding price information upfront). Indeed, that's exactly what we see with certain aspects of health care markets, such as Lasik or cosmetic surgery procedures - consumers and producers shape their behaviors based around pricing.
Why is that? Because those procedures are among the few that don't have the characteristics described above. They're elective procedures, fairly standardized, are not covered by insurance (and thus don't have third-party payor problems), and typically do not have any externalities associated with them.
So the reason we don't have a lot of transparent pricing in health care services markets is because they're affected by market failure, which market failure has to be remedied by government intervention if it would be changed. Which is (again ironically) exactly what you're claiming can't and shouldn't happen by your appeal to "hundreds of years of economic outcomes across hundreds of millions products."
And that's why this won't work, because lack of transparent and visible prices is a symptom of the factors I listed above. Mandating price disclosures isn't going to get consumers or producers to start competing on price, because consumers almost never actually pay the price for services covered by third-party payors (and thus have no incentive to take it into account), and even if they did lack the information necessary to evaluate whether pricing differentials are justified or not and face very high acquisition costs to obtain that information.
It's not likely to make any difference, Dope - despite the promises and expectations of people who advocate for it, like those in the article you linked to.
