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Nearly 100% of your medical costs are price-gouging.
The hospital charged $55,000 but then accepted ~$11,000 in payment from an insurance company.
That is prima facie evidence of classic price-gouging.
What you have described is an $11,000 appendectomy, not a $55,000 appendectomy. If the market price is $11,000, why would anyone pay $55,000? Answer - they won't.
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But how much did it really cost? $2,800? And what is the Market Rate?
Other than setting a price floor if one wants to stay in business, and being a factor in cost-plus contracts, cost has little if anything to do with the price.
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$17 for two Tylenol tablets? Really? At the time, my friend could have walked a block to the United Dairy Farmers store and bought three 500 count bottles for less than $15.
If what you describe is accurate, you would have to admit that your friend was foolish to pay $17 for two Tylenol.
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The Cincinnati Enquirer discovered that doctors can charge $13,000 for open-heart surgery, and make a profit....
And what does that have to do with the market price for open heart surgery?
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...yet as they also discovered, hospitals illegally collude to illegally fix prices at $26,000 to $41,000 in order to price-gouge consumers.
Collusion for purposes of illegal price fixing is not what this thread is about.
What you have described is an $11,000 appendectomy, not a $55,000 appendectomy. If the market price is $11,000, why would anyone pay $55,000? Answer - they won't.
Other than setting a price floor if one wants to stay in business, and being a factor in cost-plus contracts, cost has little if anything to do with the price.
If what you describe is accurate, you would have to admit that your friend was foolish to pay $17 for two Tylenol.
And what does that have to do with the market price for open heart surgery?
Collusion for purposes of illegal price fixing is not what this thread is about.
Mircea is right on a lot of these things.
Why would someone pay 55K instead of 11K? Because when they need a appendectomy they can't exactly price shop-especially since many hospitals wont tell you the price in advance. How can you type stuff like that?
Cost has everything to do with price....unless you're price gouging.
I'm making a guess you don't actually have a phd despite your handle here. Mirceas pretty accurate here on this topic. I even repped him for some of it.
Does price gouging exist? Is it possible for a non-governmental entity to price gouge?
If you believe price gouging exists, please describe what you understand price gouging to be.
You would be very ignorant to believe that collusion in markets is non-existent.
Industry leaders meet to control inventory and materials to make the products that are regularly consumed.
Why would someone pay 55K instead of 11K? Because when they need a appendectomy they can't exactly price shop-especially since many hospitals wont tell you the price in advance. How can you type stuff like that?
Cost has everything to do with price....unless you're price gouging.
I'm making a guess you don't actually have a phd despite your handle here. Mirceas pretty accurate here on this topic. I even repped him for some of it.
Hospitals are known to gouge prices. They have high overhead don't get me wrong but they nickle and dime customers along the way. The paper cup you get your pills in cost as little as get this $0.02 yet charge $12 for it, 600 times the cost.
Why would someone pay 55K instead of 11K? Because when they need a appendectomy they can't exactly price shop-especially since many hospitals wont tell you the price in advance. How can you type stuff like that?
The point was very simple. It wasn't a $55,000 appendectomy, it was an $11,000 appendectomy, and the price paid was $11,000. Sorry you didn't get it.
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Cost has everything to do with price....unless you're price gouging.
Sorry but you couldn't be more wrong.
Here is a little scenario to help you understand this simple concept.
Assume that you have 20 ounces of gold. You purchased 10 ounces many years ago for $200 per ounce. The other 10 ounces you purchased more recently at the five year high of $1,900 per ounce. You plan to sell of your gold today, and the spot price for gold is right around $1,300. Tell us, precisely, how your costs of $200 and $1,900 affect the price at which you sell your gold.
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I'm making a guess you don't actually have a phd despite your handle here.
Nice ad hominem. But it doesn't change the fact that you aren't doing a very good job at addressing the issues.
You would be very ignorant to believe that collusion in markets is non-existent.
Industry leaders meet to control inventory and materials to make the products that are regularly consumed.
Of course collusion exists. But what you describe is not generally what people are talking about when discussing "price gouging."
Hospitals are known to gouge prices. They have high overhead don't get me wrong but they nickle and dime customers along the way. The paper cup you get your pills in cost as little as get this $0.02 yet charge $12 for it, 600 times the cost.
Yes it is.
Given the existence of things like insurance (both private and government), laws requiring hospitals to provide medical care regardless of ability to pay, bills that are regularly adjusted down or completely written off, and hospital/medical pricing is very different from the typical "there was a hurricane and now gasoline and bottled water are more expensive" types of "price gouging" that are commonly discussed.
Since it is very obvious, this should be easy for you. Tell me, precisely, how I can go about charging, and getting, more than the market determined price for my goods.
I'll wait while you formulate your answer.
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