The first argument is about the excess costs of healthcare--in his case he says his last hospital bill was $1,927 and concludes it is too much just because some others would have difficulty paying it. That is not adequate information because he did not describe the value of it. In fact, the author self-admittedly says "I’m allergic to almost everything on the planet", which means without the advances that have made modern healthcare possible he would either be dead or constantly uncomfortable (depending on the severity of his allergies). Being able to live a normal life instead sounds like pretty great value for two thousand bucks.
In the second argument he says that other things, like software, are priced based on the effort to make them. He contrasts this: "the price of a software contract is roughly correlated to the price it takes to produce the software [...[ In healthcare, the price of software licenses is frequently not tethered to the production costs in any way whatsoever [...] it doesn’t take more effect or work for them to create a product for a hospital with more beds." He concludes that this is evidence of grift in healthcare. This is another fundamental mistake: the price of software is correlated with the amount of marginal value it provides to the customer over to their next best alternative. It's just basic economics.
Given two large fundamental misconceptions in the first two arguments of the post I have elected to forego reading the rest of the article.
This is another fundamental mistake: the price of software is correlated with the amount of marginal value it provides to the customer over to their next best alternative. It's just basic economics.
The comparison is almost optimally bad, honestly. The price to produce more copies of software is almost zero; the price of a software contract is utterly disjoint from that. It's a general problem with research-heavy production or primarily-data products. The first one costs a billion dollars, every one after that is free.
Healthcare actually shares this issue, not to quite the same extent as software or, say, ebooks, but more so than almost anything else.
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Notes -
The first argument is about the excess costs of healthcare--in his case he says his last hospital bill was $1,927 and concludes it is too much just because some others would have difficulty paying it. That is not adequate information because he did not describe the value of it. In fact, the author self-admittedly says "I’m allergic to almost everything on the planet", which means without the advances that have made modern healthcare possible he would either be dead or constantly uncomfortable (depending on the severity of his allergies). Being able to live a normal life instead sounds like pretty great value for two thousand bucks.
In the second argument he says that other things, like software, are priced based on the effort to make them. He contrasts this: "the price of a software contract is roughly correlated to the price it takes to produce the software [...[ In healthcare, the price of software licenses is frequently not tethered to the production costs in any way whatsoever [...] it doesn’t take more effect or work for them to create a product for a hospital with more beds." He concludes that this is evidence of grift in healthcare. This is another fundamental mistake: the price of software is correlated with the amount of marginal value it provides to the customer over to their next best alternative. It's just basic economics.
Given two large fundamental misconceptions in the first two arguments of the post I have elected to forego reading the rest of the article.
The comparison is almost optimally bad, honestly. The price to produce more copies of software is almost zero; the price of a software contract is utterly disjoint from that. It's a general problem with research-heavy production or primarily-data products. The first one costs a billion dollars, every one after that is free.
Healthcare actually shares this issue, not to quite the same extent as software or, say, ebooks, but more so than almost anything else.
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