The Parasites of Western Economy, Part 9: Over-chargers for unfamiliar types of service.

The Parasites of Western Economy, Part 9: Over-chargers for unfamiliar types of service.

by tonytran2015 (Melbourne, Australia).

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(Blog No. 146).

#parasite, #over-charging, #medical service, #emergency service, #towing service

The Parasites of Western Economy, Part 9: Over-chargers for unfamiliar types of service.

The less a service is known the less people know how to scrutinize its quality and price. There are now parasites specializing in using this unfamiliarity to rip off the population at large. The medical and emergency service providers are not to be blamed but the owners and the accountants of their companies are real parasites feeding on the ignorance of the population at large.

1. Over-charging by companies owning medical service providers.

Few people are to use hospital service during their working life. This make hospital procedures unfamiliar to most of them. They are further worried about expensive hospital procedures so they take up health insurance to let the insurers look after everything.

This leads to a non-symmetric price setting mechanism between supply and demand as the suppliers have no feedback on prices from service demanders

(Family Hit With $18,000 Bill From Hospital After Their Infant Was Given A Brief Nap and Released [1], Oklahoma Woman Charged $15,000 For Four Tiny Screws By Hospital [2].)

Prices charged to health insurers just keep on rocketing and have been deliberately overblown, health insurers just increase the premiums and the health insurance policy holders just keep paying up until they had to drop out of health insurance. Then former health insurance policy holders have to travel oversea every year to obtain their regular health service from the oversea destination.

The non-affordability of health insurance in America is caused by this non-symmetric supply demand relationship and is aggravated by the monopoly granted to the medical service industry by the American licensing system.

2. Over-charging by companies owning emergency service providers.

Emergency service provider companies are not slow to follow the lead. Air ambulance companies can also hit patients with overblown bills.

(“Rides in so-called air ambulances can lead to bills of more than $20,000 depending on a person’s coverage, and insurance experts say big invoices are becoming more common as costs rise and coverage shifts ” [3]. Passenger Who Became Trapped Under a Subway Train Begged Rescuers Not to Call an Ambulance Because She Couldn’t Afford It – Woman Would Rather Die Than Call an Ambulance Because She Could Not Pay the Bill [3b]).

3. Similar occurrences in other industries.

The captive market of unfamiliar services has been exploited by the car towing and car smash repairs industries.

Car towing service in Australia have been with such occurences of uncontrollabe costs [4,5] and State government in Queensland in Australia had to step in [6].

There is also some allegation that some American tow truck business is a racket protected by some police member [7].

The exploitation seems to start from the unfamiliarity of users of those services.

4. Conclusions

a. Going oversea (to Mexico or Cuba) will become a common experience for Americans who cannot afford ever-increasing health care.

b. An education campaign for users of these services in conjunction with some regulations for pricing seem to be the only available method of prevention of this type of exploitation.

c. In Australia, the Australian Medical Association as well as Medicare (national health insurance) system of Australia have a number of checks on the quality and pricing of services such as price for short, long consultations [8,9] etc… This seems to work in area populated by well educated citizens. However, there are still overblown bills to the Australian Federal Government and private insurers as the uninformed users and the over-users (many of them are immigrants) of these seemingly “free service” still do not care about the correctness of the billing to the Government or their insurers, they only sign whatever given to them by their doctors.

d. More regulations on the pricing of these services may work but this carries with it a risk of over-regulation which stiffles innovation.