Health care demand curves slope how?
Not only are online vendors and innovating hearing-aid manufacturers cutting costs and improving quality and service times, but digital developers are offering online hearing apps via iTunes and other virtual stores for as little as $3.99. (Yes: There is a decimal after that 3.)
It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.
This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.
This is another case of a phenomenon observed elsewhere by Devon Herrick of the National Center for Policy Analysis: Where patients pay directly for medical care, prices fall like they do in every other market.[Noticed at Newmark's Door]