Here’s a lie that you’ve been told that I hope you don’t believe: in the health care market, you get what you pay for. I think we should discuss why this isn’t true.
In many markets this is true, you do get what you pay for. But the health care market is so dysfunctional, it’s anything but a free market in many parts of the United States to the point that it’s not accurate to say that, “You get what you pay for,” in health care.
Hopefully one day we will have a vibrant free market and the majority of hospitals, institutions and physicians and everyone else in the health care industry will have to endure the same market discipline that every other industry must endure. Then it will, by and large be true, that you get what you pay for.
High prices, rather than indicating high quality, just mean that there’s not much competition going on. In the absence of competition, prices are high, because one or two players have a tight grip on the healthcare market in that area.
Low prices typically mean higher quality, because that means there is competition going on. Somebody is in there mixing it up and they can’t just compete on price, they also have to compete on quality.
My friends at Healthcare Bluebook have told me that this is absolutely the case. There is an inverse relationship between price and quality, think about that for a minute.
So when you hear, “You get what you pay for in health care,” as the prices drop to affordable levels so that health care is much more accessible to many more people, don’t believe those who would like to keep the prices up high, so they can line their pockets with your hard-earned dollars.
Thank you for joining me, we’ll see you next time.