Is healthcare a natural monopoly?

[cthulhu]

Okay, healthcare for communicable deiease has significant network effects: For everyone in the community that doesn't have Hep C, your chance of catching hep C obviously drops. If no-one has Hep C, you actually catching it has a probability of 0.

Given this is healthcare a natural monopoly? We're facing the reality that integrated care organizations are the future (the US private sector is switching models and so is the rest of the world), and given that intergrated care benefits from these network effects.

Not sure.

[Gelare]

I'd appreciate some clarification on the question. Health care is actually a hugely broad topic, which can, depending on what you want to talk about, can include general practitioners, family doctors, pediatricians, specialists of all sorts (including those in areas of non-contagious diseases, which therefore don't have significant network externalities), hospital care, diagnostics, treatment, pharmaceuticals, nursing homes, hospice care, minute clinics, and on and on and on.

I don't particularly mind whatever the field of discussion is, but I do want to have one clearly delineated, because otherwise this, like some of the other health care discussions that have been brought up around here, is going to go south, fast.

[Bigode]

(including those in areas of non-contagious diseases, which therefore don't have significant network externalities)

Don't they still have a significant network externality of joint research (or lack thereof), or I got the term wrongly?

[Gelare]

(including those in areas of non-contagious diseases, which therefore don't have significant network externalities)

Don't they still have a significant network externality of joint research (or lack thereof), or I got the term wrongly?

Good point: we should probably also define terms not all people might be familiar with. From wikipedia, with a helpful example:

In economics and business, a network effect (also called network externality) is the effect that one user of a good or service has on the value of that product to other users.

The classic example is the telephone. The more people own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase their phone without intending to create value for other users, but does so in any case.

The expression "network effect" is applied most commonly to positive network externalities as in the case of the telephone. Negative network externalities can also occur, where more users make a product less valuable, but are more commonly referred to as "congestion" (as in traffic congestion or network congestion).

Over time, positive network effects can create a bandwagon effect as the network becomes more valuable and more people join, in a positive feedback loop.

Joint research doesn't really have anything to do with network externalities, but it is still relevant to the question of whether health care is a natural monopoly if you think that one company focusing its research efforts is more efficient than two companies retreading the paths the other one secretly covered a few months ago - or if you think that the incentive to innovate will promote more and better research efforts in multiple companies than in one. It's worth noting that if you think health care is a natural monopoly, you almost certainly want it to be government-regulated or government-run, in which case you're comparing the situation of two (or more) companies in competition versus the case of the government-run organization running the whole show.

[Bigode]

I stand corrected. And would suggest using links, both because it spares scrolling for someone who already read and's going to further posts, and because I'm not sure I can tell what Wikipedia page that came from, which might slow further reading a bit. Thanks of course.

[Username17]

It goes beyond that. Every person who has Hep C exists as an incubator where new strains of Hep C are evolving. The chance of a new Hep C version that is more resistant to current treatment, more contagious, or more deadly increases with every person who has Hep C. People having Hep C is not just a literal attack on every person in society, it's an attack on all future generations of humans who will ever live in any society.

That being said, portions of healthcare still aren't natural monopolies. Oh sure, Emergency Services are a natural monopoly. There's no "price competition" in any meaningful sense when someone has a heart attack - you've got six minutes from the onset - you just do what you can. Everyone benefits from there being good emergency services, when they are needed there's no time for haggling or form signing, and the people who are specifically serviced at any given moment are literally those least able to pay at that moment. Emergency services are not just a natural monopoly, they are a clear and obvious argument for socialized public financing of a natural monopoly.

Vaccination even more so. Every sick person is also a biological weapons lab making new generations of plagues to slaughter the innocent. Those followers of Christ Scientist or those weird ass fuckers who claim a link between MMR vaccines and Autism aren't lovable laughable scamps with hilarious crazy ideas - they are terrorists who are literally murdering people for their faith. A man who cites religious objections to a polio vaccine is no better or even different from a suicide bomber. They are risking their lives for a course of action that will ultimately butcher and paralyze innocent children. It's not just a natural monopoly - its war. Those who act or even speak against full socialized vaccinations are traitors and assassins - and should not be treated any differently because of the technical nature of the discussion.

Even most medical research is in the same boat. You will eventually get a fatal illness. But you don't know which one you'll get. The best solution really is for everyone to sponsor a big pool of blue sky research and give out treatments to whoever ends up needing them as they come on line. Doing it in some other order, or having people wait until they get sick to finance directed research is a fool's game.

Competition of ideas does lead to change and improvement, but in most cases it can and should be handled through the medium of scientific discourse. If some asshole just breaks ranks and splashes a bunch of unfounded speculations to the media Children Actually Fucking Die. Discussions of service areas, funding, traning, and methodology need to be had, but these contractual discussions need to happen well in advance and far removed from actual patient care.

But that being said, there is a place for privately funded competition in the field of health care. The fact is that all treatment and research has an associated cost and benefit to it. Diseases which are rare, mild, or affect sections of the population that are not really contributing to society (like the very old) are frankly not worth putting research money into from a standpoint of costs and benefits. No government is going to rationally put time and effort into Alzheimer's research - because the disease doesn't really have much of a cost to society relative to the incredible difficulty perceived in doing anything about it.

So it makes sense to have a secondary outlet to research and treat these diseases in a voluntary and privately funded fashion. It won't go as fast research wise as being able to bend large amounts of universities towards the goals, but it will progress at all, which it otherwise would not do.

It sucks that people who have a rare kidney problem are going to have t shell out big bucks to private healthcare adjuncts, but it's unfortunately a reality. Public healthcare cant be bothered for anything sufficiently rare, and private healthcare can't be bothered for anything ithout a significant pile of cash. So the pile of cash option has to exist even if the vast majority of the system is handled socially, because it's literally the only option that some people are ever going to have i any system.

-Username17

[Crissa]

Of course, the added cost of caring for people with things like Alzheimer could change priorities, and general study can often bring solutions or new information to or from those rare cases.

But once again, those are only benefits if everyone is covered vs only covering a subset of people...

...But that isn't a monopoly, either, that's saying the most efficient risk pool is the largest possible pool.

-Crissa

[cthulhu]

I'd appreciate some clarification on the question. Health care is actually a hugely broad topic, which can, depending on what you want to talk about, can include general practitioners, family doctors, pediatricians, specialists of all sorts (including those in areas of non-contagious diseases, which therefore don't have significant network externalities), hospital care, diagnostics, treatment, pharmaceuticals, nursing homes, hospice care, minute clinics, and on and on and on.

I don't particularly mind whatever the field of discussion is, but I do want to have one clearly delineated, because otherwise this, like some of the other health care discussions that have been brought up around here, is going to go south, fast.

Yeh, it is. I recently participated in a major healthcare strategy peice professionally (I was one of the technology specalistS) and the details of the system are just maddening.

Anyway, their are significant network effects in treatment of non infections illnesses to - mostly chronic care as opposed to.. whatever the term of an acute care incident that isn't chronic is because it is not re-occurring.

This is because the sharing of infomation is paramount in successfully treating chronic illness - partly this is behind the rise of organisations like KP.

The problem is the network effects are going to be felt in two places chronic and contagious deieases, and not only do those categories overlap, they interact with the broadest spectrium of the health system itself.

So defining the topic is tough. It was really just a thought.

[Gelare]

To be honest, I'm a little surprised that private companies are allowed or able to run emergency services at all, because when you're having a heart attack right now, there is really very little possibility for shopping around. I suspect it has mostly to do with insurance companies, and those who don't have insurance get screwed.

When I go to the hospital, a few weeks later I get a statement in the mail. On this statement there are a few numbers. The first is the "price". This is what the hospital claims to charge for its services, and is usually the most absurd, ridiculous number their accountants could come up with by throwing darts. Then there is the "adjustment". This is the agreement my insurance company has with the hospital that basically says, screw you guys, we're not paying you a penny over this much. The price after adjustment is often less than half of what it started at. And then there's how much my insurance pays, which is a big number, and there's how much I pay, which is a small number. If you don't have any insurance, you pay the biggest number, and you're screwed.

[ckafrica]

But that being said, there is a place for privately funded competition in the field of health care. The fact is that all treatment and research has an associated cost and benefit to it. Diseases which are rare, mild, or affect sections of the population that are not really contributing to society (like the very old) are frankly not worth putting research money into from a standpoint of costs and benefits. No government is going to rationally put time and effort into Alzheimer's research - because the disease doesn't really have much of a cost to society relative to the incredible difficulty perceived in doing anything about it.

Loved the rest of that rant Frank but got to disagree on you here. There are 2 vested interests in Alzheimer's research for modern democratic governments:
1. That old people in danger of developing alzheimer's are generally politically active and therefore can level political weight on the issue.
2. Many of the governments chiefs are likewise older people who might not want themselves to be in danger of becoming stricken with the disease.

I think you're pushing your utilitarian ideals to Utopian extremes.

[Gelare]

Those who act or even speak against full socialized vaccinations are traitors and assassins - and should not be treated any differently because of the technical nature of the discussion.

I'm curious about something, just as a little thought experiment.

There's a contagious disease, the Martian Death Flu. Each individual in society has a chance c(i) of getting the disease - so person number 1 has chance c(1), person 2 has chance c(2), and so on, and these chances are based on a bunch of risk factors: age, ethnicity, income, dietary habits, exercise routines, medical history, etc., which means some people are at higher risk for catching the martian death flu, and some are at lower risk.

For some reason, some people have a negative reaction to the vaccine - a very strongly negative reaction. We'll say the newly developed vaccine for the martian death flu causes reactions as bad as the illness itself in people with probability p. It's a small chance, in the <1% range, but a perceptible chance nonetheless.

Now, some people are going to be at high risk for the martian death flu, and should obviously get immunized. Some people are going to be at low risk, and they would actually be less likely to get complications if they didn't get the vaccine - but if they do catch the martian death flu, they'll raise the likelihood that other people get it. So, what should the government do?

1) Require everyone to get the vaccine, under penalty of fine and/or imprisonment. Despite their objections, those who were at low risk get sick at a higher rate than they otherwise would, and can rightfully blame the government for their miserable lot in life, but it doesn't matter because their misery has prevented the misery of the high risk people.

2) Require everyone to get the vaccine, where those who can show records that they are at low risk pay a lower price to receive the vaccine, or get a small tax break to offset their increased risk of getting sick. In this case, the low risk people get back some of the (network externality) benefits they give to society, to compensate for increasing their risk.

3) Require only those who are at high risk to get the vaccine, while those who can show records that they are low risk are exempted.

4) Do not require anyone to get the vaccine, but spread information about the risk factors and dangers of illness, so that those at high risk will get vaccinated and those at low risk will not.

5) Whatever other option you prefer, of which there are very many.

Sorry if this leads us too far off topic. Like I said, I was just curious.


(EDITED for clarity and to add Bigode's suggestion.)

[Bigode]

I suppose you're missing "require everyone except those who prove low risk" (assuming there is a way to prove low risk), which's incidentally what seems best to me (not to say it's worth much).

[Gelare]

I apologize, my original formulation was self-contradictory. I've tried to patch it up to be meaningful in any way at all.

To stress: those who are at low risk and choose not to be vaccinated have (in expected value, overall terms) negative effects on everybody else, since while they themselves are infected only rarely, their infection does increase the risk that others will be infected.

[Username17]

The best answer is to do what we did with small pox: line everyone up at gun point if necessary and inoculate everyone. Some people will die from that, in your formulation possibly as many as 60 million people will die from that - 1% is a very large number. But hundreds of millions would be saved this generation, and hundreds of millions would be saved next generation as well. And so on, for eternity.

Lining people up at gun point to take small pox vaccines was a shitty thing, but compared to the realities of small pox still existing it was a minor inconvenience.

-Username17

[Bigode]

What I'd find relevant's that I don't know if, assuming real diseases, there is a way to prove risk-lower-than-vaccination. If there is, why everyone? If there isn't, why was it mentioned?

[Crissa]

That's why we don't continue to give vaccines for small pox.

-Crissa

[Bigode]

How about "when the vaccine's made and we're considering who we'll vaccinate" instead of "when we already vaccinated everyone"?

[Crissa]

No, we know what the predicted numbers are. And the small pox vaccine has a kill rate, and small pox had a kill rate. Now that the small pox infection rate is low enough that people don't encounter it, we don't vaccinate those who won't likely encounter it.

However, we don't always know the exact numbers, sometimes things are better or worse in actual use than in testing. Like, we now know that people who suffer from psoriasis are more likely to die from the small pox vaccine than those who do not. So those people (who are at greater risk from the vaccine than the disease) aren't given the vaccine.

-Crissa

[Bigode]

Yeah, what I didn't know was the quality of such predictions. Funny that the example happens to involve myself (just minorly affected nails, it's not the skin variety).