Imagine you are hours away from dying. Someone comes to you and offers to give you another year of life in return for some large proportion of all your saving and material possessions. I hazard that only a fairly few would refuse the offer. Indeed, the free market would tell us on average what the appropriate price for another year of life was.
Sounds rather extreme and ghoulish doesn't it? But that's the system we have. It's why 25% of all your medical bills will come in the last year of your life. Of course some will say it's not market pricing but the costs of the procedures but have you ever asked what medical procedures cost to deliver (as opposed to the price you are charged)?
This has the features of price discrimination - that is people are charged different prices for the same things based on their willingness to pay. For example you will likely pay over $300 for a dose of meclizine hydrochloride if administered in the ER, while the same compound can be bought in pill form for $5 for a 16 doses from Rite Aid.
Prices go up when the buyer in a transaction has no leverage or bargaining power. When you are gravely ill, you have none an will pay whatever is asked. The reason that health care costs so much in the US is because we allow this asymmetry of bargaining power. Health care outcomes are no better than in most European countries and in some areas are worse - yet we pay twice as much.
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