Hospitals lift curtain on prices, revealing giant swings in pricing by procedure • Hacker News Board

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#461

Post by Retric » Fri, Sep 24, 2021, 3:55 PM UTC

dllthomas wrote: post #449

Retric wrote: post #356

Earlier quoted context omitted.

Not internal paperwork. Think in terms of industry wide collusion not a single insurance company. If lobbing or an industry group can drive up healthcare costs via say paperwork or regulations then every health insurance company is “forced” to raise premiums and as the maximum profit per premium ratio is fixed that also increases the total possible industry wide profit. Of course insurance companies are also in compe…

I think even in terms of industry-wide collusion, the push of an MLR cap would be to decrease (money spent on) paperwork. With R = revenue, P = profit, A = administrative expenses, and M = medical expenses, we have: R = P + A + M which we can rearrange a little bit to get P = R - M - A From the point of view of an individual company, clearly increasing our own expenses means less profit: P₂ = R - M - (A + δ) = P - δ…

Don’t forget a regulation that says Profit So while thinking in terms of total administrative costs seems reasonable there are two different numbers here, administrative costs for the insurance companies and administrative costs for the healthcare industry and that matters.

So again, assuming it’s the regulation not market forces limiting profits increasing Ma directly increases profits. Up to some limit rather than P < (Mm + Ma) * X% it’s P = (Mm + Ma) * X%. Thus creating incentives to increase Ma.

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#462

Post by dllthomas » Fri, Sep 24, 2021, 4:12 PM UTC

Retric wrote: post #461

dllthomas wrote: post #449

Earlier quoted context omitted.

I think even in terms of industry-wide collusion, the push of an MLR cap would be to decrease (money spent on) paperwork. With R = revenue, P = profit, A = administrative expenses, and M = medical expenses, we have: R = P + A + M which we can rearrange a little bit to get P = R - M - A From the point of view of an individual company, clearly increasing our own expenses means less profit: P₂ = R - M - (A + δ) = P - δ…

Don’t forget a regulation that says Profit So while thinking in terms of total administrative costs seems reasonable there are two different numbers here, administrative costs for the insurance companies and administrative costs for the healthcare industry and that matters. So again, assuming it’s the regulation not market forces limiting profits increasing Ma directly increases profits. Up to some limit rather than…

Ah, yes, administrative costs within the medical organizations are presumably paid by passing those costs on to (payers including) insurance companies as "medical costs" and that is presumably counted in the M in the MLR (I could imagine a system that avoids it - at, ironically, the cost of some more paperwork - but I don't expect it's what we do).

It is true that the MLR cap does nothing to motivate insurance companies to avoid increasing hospital paperwork. I don't see that it produces incentive to create it - yes, increasing payments to hospitals increases allowable profit, but in order to make that profit you need sufficient revenues and customers aren't paying because they want hospitals to do paperwork. I'm of a mind that (at the margin) increasing legitimate (or nearly legitimate) medical spending is typically pretty easy so there is no need to find alternative ways of paying hospitals more; if I'm mistaken about that then you raise an important point that probably deserves attention (if it hasn't got it in some way I'm unaware of).

Re: Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

#463

Post by rconti » Sat, Sep 25, 2021, 9:17 PM UTC

rpmisms wrote: post #272

rconti wrote: post #239

Earlier quoted context omitted.

That's great until the church decides your parents are sinners and refuse to cover anything, and have no consequences for stealing their money.

They're not church-run organizations. This is reductionist, inaccurate, and I would go so far as to say bigoted.

You're welcome to think that about me, but health sharing is almost entirely scams using "religion" as a cover. See my other link in this thread. I'm happy for your family that they got a good one.