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Providers, not insurers, are responsible for excess U.S. health care cost (2024)

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Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#21

Post by tdb7893 »

When arguing that health insurance isn't that inneficient he talks about "But when we look at United Health Group’s operating costs in the diagram above, they’re only 22.6% of the actual cost of medical care.". 22.6% for a middleman is not insignificant! Also providers have to spend a lot dealing with insurance so it's certainly an undercount of their total cost. This makes the burden of insurance seem like a huge % of the total medical costs in the US, which seems like the opposite of what he's trying to argue.

Overall, there are lots of nitpicks with this article but my personal takeaway is: if this is the best defense people can make for the US medical insurance system then that shows how bad it really is.

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#22

Post by readthenotes1 »

tqi wrote: post #6

They are not solely responsible, but of course they bear some responsibility. ACA has a Medical Loss Ratio that requires insurers to spend 80% or 85% of premium revenue on medical services "thereby limiting administrative costs and profits to the remaining 15-20 percent."[1] In other words the only way for them grow profits is to increase cost. This guy is way out of his depth. [1] https://www.rand.org/pubs/external_…

I'm on ACA. I get between $100 and $150 on a gift card to do my annual PCP visit even though my premium is $0/month.

Why? Obvious if you know about the perverse incentive tqi mentions

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#23

Post by dgellow »

jasonlotito wrote: post #17
jayturley wrote: post #4

Yep, for-profit healthcare is a bad idea. It's the main reason our USA healthcare costs so much.

> Yep, for-profit healthcare is a bad idea. It's the main reason our USA healthcare costs so much. And yet it still exists in the rest of the world. But people tend to think of it only as for rich people as opposed to covering things the rest of the world ignore. I'm not saying the US is perfect, but having lived under both kinds of healthcare, cost and quality are two reasons I'm in the US.

Because you wanted to pay more? Or are you saying it is cheaper in the US? If the latter, could you be more specific?

I pay the maximum possible in Germany for my health insurance and from what I understand I still pay less for healthcare than I would in the US.

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#24

Post by chongli »

zephen wrote: post #14
tqi wrote: post #6

They are not solely responsible, but of course they bear some responsibility. ACA has a Medical Loss Ratio that requires insurers to spend 80% or 85% of premium revenue on medical services "thereby limiting administrative costs and profits to the remaining 15-20 percent."[1] In other words the only way for them grow profits is to increase cost. This guy is way out of his depth. [1] https://www.rand.org/pubs/external_…

> the only way for them grow profits is to increase cost. And, of course, things like spurious denials drive up costs for them and for the providers. More direct costs, more costs at the provider they have to cover... From the insurance company perspective, it's a win-win!

> things like spurious denials drive up costs for them and for the providers

Spurious denials? Or improperly filed claims?

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#25

Post by eli_gottlieb »

neilwilson wrote: post #5

It’s not a matter of profit. It’s a matter of costs. From the graphic the insurers take in $371.6b and pay out $241.9b in medical services costs. That’s $130b on a pointless activity that uses up physical resources that would be better deployed elsewhere in the economy. Healthcare needs to be provided as a matter of course, and “competition” won’t improve it or control it because there is always a supply side shortag…

> “competition” won’t improve it or control it because there is always a supply side shortage of provision.

Why is there always a supply-side shortage?

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#26

Post by dgellow »

readthenotes1 wrote: post #22
tqi wrote: post #6

They are not solely responsible, but of course they bear some responsibility. ACA has a Medical Loss Ratio that requires insurers to spend 80% or 85% of premium revenue on medical services "thereby limiting administrative costs and profits to the remaining 15-20 percent."[1] In other words the only way for them grow profits is to increase cost. This guy is way out of his depth. [1] https://www.rand.org/pubs/external_…

I'm on ACA. I get between $100 and $150 on a gift card to do my annual PCP visit even though my premium is $0/month. Why? Obvious if you know about the perverse incentive tqi mentions

Could you elaborate?

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#27

Post by ryandrake »

colechristensen wrote: post #16
neilwilson wrote: post #5

It’s not a matter of profit. It’s a matter of costs. From the graphic the insurers take in $371.6b and pay out $241.9b in medical services costs. That’s $130b on a pointless activity that uses up physical resources that would be better deployed elsewhere in the economy. Healthcare needs to be provided as a matter of course, and “competition” won’t improve it or control it because there is always a supply side shortag…

The rest of the world has private healthcare on top of the public ones because the public ones are often inadequate. Just go look for the local debate in any country with government healthcare and look for the parties who are pushing for change and their complaints. Then ask yourself if you really would want the current administration in charge of your healthcare... if you'd like every four years to be a coin toss fo…

The fact that a single person is "in charge" of the government, with the other two branches largely deferring all power to that one person, is a recent aberration from the norm in the USA. I'm for a single-payer health system that is administered by a well-checked regulatory apparatus and institutions that are not subject to wild policy swings at the whim of a single king-like leader.

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#28

Post by EvanAnderson »

xenadu02 wrote: post #18
znnajdla wrote: post #9

Earlier quoted context omitted.

It’s neither a matter of profits nor costs. It’s a matter of incentives. The basic principle of capitalism can’t work if the buyer doesn’t have a choice, if the buyer is not the one who usually pays, and if the payer has a way of avoiding responsibility to pay. The privatized health insurance system is truly and completely fucked up.

By definition a free market in healthcare requires forcing some people to die from a treatable injury or condition to discover the optimal price. That's part of the definition.

Because the supply is constrained I feel like that's the case regardless of how the system is financed. (There are only so many providers, facilities, etc.)

It seems like the core problems with US "system" come from having a "shadow" socialized system (by way of EMTALA[0]) that offloads costs onto the "free market" (read: patients or insurers who can pay) and a shocking inability to have a mature public conversation about how care will be rationed. (That conversation still happens but it's between providers and insurers and not subject to public scrutiny.)

[0] https://en.wikipedia.org/wiki/Emergency_Medical_Treatment_an...

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#29

Post by anon291 »

eli_gottlieb wrote: post #25
neilwilson wrote: post #5

It’s not a matter of profit. It’s a matter of costs. From the graphic the insurers take in $371.6b and pay out $241.9b in medical services costs. That’s $130b on a pointless activity that uses up physical resources that would be better deployed elsewhere in the economy. Healthcare needs to be provided as a matter of course, and “competition” won’t improve it or control it because there is always a supply side shortag…

> “competition” won’t improve it or control it because there is always a supply side shortage of provision. Why is there always a supply-side shortage?

Because the American Medical Association artificially restricts residency spots in hospitals. There's really not much more to it. This explains the proliferation of NPs, PA-Cs, etc acting as GPs. In reality, we simply need more doctors, so we should uncap the # of spots.

Re: Providers, not insurers, are responsible for excess U.S. health care cost (2024)

#30

Post by FireBeyond »

readthenotes1 wrote: post #22
tqi wrote: post #6

They are not solely responsible, but of course they bear some responsibility. ACA has a Medical Loss Ratio that requires insurers to spend 80% or 85% of premium revenue on medical services "thereby limiting administrative costs and profits to the remaining 15-20 percent."[1] In other words the only way for them grow profits is to increase cost. This guy is way out of his depth. [1] https://www.rand.org/pubs/external_…

I'm on ACA. I get between $100 and $150 on a gift card to do my annual PCP visit even though my premium is $0/month. Why? Obvious if you know about the perverse incentive tqi mentions

There are all sorts of perverse incentives in play. Many plans won't pay for weight loss drugs (obviously GLP-1s, but even beyond that) but will happily pay for gastric bypass, for one simple example.
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