Individuals and organizations trade in the market autonomously in search of better profits. Market laws, rooted in human nature, govern all transactions and participants. When these laws are ignored, as is often the case in the medical industry, the market finds ways to retaliate, to the detriment of society.
Law 1: Market transactions increase the profits of participants
Take Uber as a common example. Because the driver and passenger voluntarily enter into a carpool transaction, both parties are better off with her IRS (due to increased income tax revenue) than they would be without such a transaction.
Similarly, in the healthcare industry, when faced with last-minute patient cancellations, doctors turn to virtual care marketplaces like Sesame Health and Amazon Clinic to serve cash-paying patients within a specified time frame. You may. This deal benefits both doctors and cash-paying patients, allowing them to secure same-day or same-time appointments at affordable prices. Patients and healthcare providers whose use of such platforms is prohibited by government regulations or insurance contracts have no choice and incur opportunity costs.
Law 2: Market prices reflect collective wisdom and democratic evaluation
The voluntary nature of market transactions dictates that all potential consumers' willingness to pay and all potential sellers' willingness to accept are incorporated into the price generation process. Market prices therefore fairly and democratically reflect the collective wisdom and valuations of all participants. In contrast, prices set by government agencies are imposed through state power and designed by a small number of individuals who are less knowledgeable than market participants and whose self-interests are imperfectly aligned with those of market participants.
For example, Medicare pays hospitals and laboratories $51, which is far more than the cost of a PCR test for COVID-19, resulting in these tests being carried out at taxpayer expense. There is a windfall benefit for healthcare providers. This situation cannot be tolerated by consumers in direct market transactions.
As another example, many European governments use cost-effectiveness criteria to evaluate innovative medical technologies, based on the assumption that everyone shares the same assessment of the net benefits expected from the use of the technology. Setting the price. Two of his recent studies have demonstrated how such pricing harms patient well-being by stifling innovation and encouraging anticompetitive behavior by incumbents. It is no coincidence that European countries have less access to new medicines and lower pharmaceutical research and development than the United States.
Law 3: Market signals guide optimal resource allocation
Healthcare AI has attracted significant financial and human capital not because of government mandates, but because of strong signals sent by the healthcare AI market. Promising market signals reflect a high consumer willingness to pay and invite entrepreneurs, investors, and talented individuals to enter the market. Through innovation and competition to offer better and cheaper products and services to attract businesses, financial capital and human capital are optimally allocated to promote the common interests of consumers. Consumers emerge as the biggest winners.
In contrast, government-directed capital allocation reflects the beliefs and preferences of policy makers and not necessarily those of market participants, leading to the risk of misallocation and wasting of tax dollars. will occur.
It is all too easy to blame the market for disastrous outcomes, forgetting that in many cases it may have been prevented from functioning properly in the first place. The laws of the market can be ignored, but negative effects cannot be avoided.
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