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The American Healthcare Conundrum

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Re: The American Healthcare Conundrum

#11

Post by jltsiren »

recursivedoubts wrote: post #5

[flagged]

Daily reminder to always check data definitions before interpreting statistics.

According to the OECD data, US 2023 healthcare spending was 28% by the government, 55% by private health insurance, 11% out of pocket, and 5% from other sources. OECD lists all US private health insurance policies under the "compulsory health insurance" heading. Apparently because there is no clear separation between compulsory and voluntary insurance, and because employer-paid insurance is not truly voluntary when it exists. (Because there is usually no option to take cash instead.)

And then the chart you linked to combines compulsory insurance with government spending. Mostly because if compulsory health insurance exists in an OECD member state, it is usually legally mandated, regardless of whether it is provided by public or private entities.

Re: The American Healthcare Conundrum

#12

Post by observationist »

paulddraper wrote: post #4

This is a believable result. Meta-analysis is 141-259% [1]. Three reasons: 1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it. 2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers…

Look at hearing aids. 50,000% markup or higher, even up in the 70k% range in some examples. Old people don't know what to be skeptical of, or at least haven't been nearly skeptical enough, and some industries are getting away with terrible exploitation, all blessed and sanctioned by the FDA.

Re: The American Healthcare Conundrum

#13

Post by genthree »

timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

These limits don’t apply to self-funded programs that are administered by big insurance companies (most large employers’ plans, then) or plans less than two years old (whether there are measures in place to prevent simply rotating plans often to exploit this, I do not know)

Re: The American Healthcare Conundrum

#14

Post by bmcahren »

shdudns wrote: post #10
timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

This. It's hard to believe that the Obama team could have been this financially incompetent.

It's easy with hindsight to believe you could have capped expense at 200% medicare but getting what we got passed was nearly impossible at the time. Before Affordable Care Act, insurers had every tool available to deny care, maximize profits, and skim more than 20% off the top. It's great we're getting closer to the point that it feels to you like incompetence that these things aren't fixed today but your anger with the medical lobby is clearly misplaced here.

Every major piece of legislation needs revisions to chase circumvention and we're well past due on updates but no legitimate bills have been presented that cover these topics and that's not a one-party issue.

Re: The American Healthcare Conundrum

#15

Post by vjvjvjvjghv »

shdudns wrote: post #10
timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

This. It's hard to believe that the Obama team could have been this financially incompetent.

Obamacare was totally subverted by the medical lobby during its creation. They had a lot of great ideas but there were way too many politicians in Congress who had sold out to the lobby (Lieberman, Baucus on the democrat side) and would block anything that would reduce cost.

And since then it has been a fight for survival without much chance for improvement. The republican refuse anything that could improve it but want to “repeal and replace” but are struggling a little with the “replace” part. And the democrats are too timid to make another push.

So we end up with the worst of all worlds. Super expensive, overall results not very good and super complex.

Re: The American Healthcare Conundrum

#17

Post by cogman10 »

timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

This seems like we need similar price caps for healthcare providers, medical equipment providers, pharmaceuticals, etc. Done just in isolation for 1 part of the healthcare industry results in this obvious bad effect.

Removing the rule wouldn't help things.

Re: The American Healthcare Conundrum

#18

Post by levocardia »

paulddraper wrote: post #4

This is a believable result. Meta-analysis is 141-259% [1]. Three reasons: 1. Medicare has quasi-monopolistic negotiation power that private insurers can only dream of -- Medicare spend two-thirds of all the private insurers combined. That's why private insurers would combine in a heartbeat if the FTC allowed it. 2. Moreover, that Medicare volume is concentrated in a specific segment of the market. If many providers…

Also, commercial insurers are essentially cross-subsidizing Medicare: the higher revenue from commercial insurers is partly why Medicare can be paid less. Similar dynamics exist with drug prices: the high US cost is a cross-subsidy to other countries. Maybe this is good (someone's got to fund R&D), maybe this is bad (it's a net wealth transfer to the elderly), but it's an important part of the dynamic either way.

Re: The American Healthcare Conundrum

#19

Post by raw_anon_1111 »

timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

So I happen to be in Costa Rica for the month. Just like every other 1st world country, it has managed to have universal health care that is better and cheaper without private insurance.

Even if you do get private insurance for quicker access, it’s still much cheaper than the US.

I just spoke to someone who flew down here to save $30K on dental work.

The problem isn’t the ACA, it’s the ass backwards American health care system. I was at a meetup of American ex-pats here and half of them said they established residency here to join CAJA - the health care system

Re: The American Healthcare Conundrum

#20

Post by phil21 »

timtim51251 wrote: post #7

Lots of people are saying nonsense here. The actual reason commercial insurers pay more is that's the only way to can make more profits. Because of Obamacare requiring 80% of the money they collect to be spent, the insurance companies just get to keep 20%. So insurance companies spend more so they can collect higher premiums. That's how they make more money. Several doctor friends have told me this as well.

In a vacuum sure. But insurance companies operate the only part of the healthcare system that is moderately competitive. In the end employers are the ones largely paying and they are professional negotiators enough to put price pressure on insurance plans. 20% of $0 is $0.

As such, as light of an incentive it is - it’s the only party in the entire system that is incentivized in any way whatsoever to keep costs down.

Insurance providers also rarely operate at the full freight 20% either way though. So they are at least at this time incentivized to control costs at some level since every dollar saved is a dollar added to the profit line. Otherwise they would not be known for denying claims so often.

This is ignoring a whole lot of very important complexities as well - such as self funded insurance plans that most major companies utilize. There the insurance company is simply a plan administrator getting paid the same either way.

It’s one of those tropes that has a source of truth behind it but the actual reality is far less satisfying of an answer. Makes for great sound bites and ability to shut down further thought on the subject though. The uncomfortable truth is that there is no simple fix and no one bad actor that is the cause of all the insanity.

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