the clientele must spend their own money to receive medical services
The flaw / issue with this, is that sick people are in no position to negotiate. People that are sick are desperate for the drugs. People that are not sick dont really need them. that is ill suited to the simplification required of econ 101. In econ 101 you want the price to converge to the marginal cost of supply, not converging to the marginal amount of residual equity / net worth of the patient's bank account (that's the hold up problem: give me all your money or you die). Imagine if you had to negotiate the price of a fire-department visit with your house burnging? Its just not a service that is ever going to fit the framework (in particular, the behaviour assumption of non-opportunim) of the typical econ 101 course.
That being said, I agree with your analysis of the insurance model when applied to "scheduled maintenance" type services. Opaque pricing and a culture of witholding service is particulary innappropriate here. Assuming that chronic and life-threatening services are another matter, that still leaves the issue of everything in-between. The issue there is that there are life-style type elective surgeries and treatments that some may want access too (the rich) but not be willing to subsidze for others (the poor). So there is a basic triage of the types of health care, and they all need to be thought through from a sociological perspective as well as just an economic and medical/technical one.
Comments
the clientele must spend their own money to receive medical services
The flaw / issue with this, is that sick people are in no position to negotiate. People that are sick are desperate for the drugs. People that are not sick dont really need them. that is ill suited to the simplification required of econ 101. In econ 101 you want the price to converge to the marginal cost of supply, not converging to the marginal amount of residual equity / net worth of the patient's bank account (that's the hold up problem: give me all your money or you die). Imagine if you had to negotiate the price of a fire-department visit with your house burnging? Its just not a service that is ever going to fit the framework (in particular, the behaviour assumption of non-opportunim) of the typical econ 101 course.
That being said, I agree with your analysis of the insurance model when applied to "scheduled maintenance" type services. Opaque pricing and a culture of witholding service is particulary innappropriate here. Assuming that chronic and life-threatening services are another matter, that still leaves the issue of everything in-between. The issue there is that there are life-style type elective surgeries and treatments that some may want access too (the rich) but not be willing to subsidze for others (the poor). So there is a basic triage of the types of health care, and they all need to be thought through from a sociological perspective as well as just an economic and medical/technical one.