Ordinary Banana

my hypothesis about this is that in the US the economics of health care are enormously distorted because it is taboo to ask about costs up front because this violates the sacredness of life, which we must pretend is not a question of money

sacredness of life seems pretty universal not just US - but there’s something there shielding medicine from being a true market

why allude to a mysterious "something"? we know with absolute certainty what the thing is: the insurer payment model.

me, an idiot: "I bet I get sick" insurer, a genius: "I bet you don't, pay me $7000/year for counterparty risk premium"

does it also apply to other insured things? the level of fucked upness seems peculiar to medicine

I think that's a yes. Credit default swaps, for example, are a type of insurance that nuked international credit markets into smithereens in 2008. Different particular pathology, same general cause: insurance is an inappropriate finance model for very many things.

in the case of CDS the market that was distorted was home mortgages. other forms of insurance have to be very particularly regulated to avoid some of the obvious insanely perverse incentives (life insurance is the canonical example).