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UnitedHealth overcharged cancer patients for drugs by over 1,000%

fortune.com

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Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#61

Post by swatcoder »

BugsJustFindMe wrote: post #4

https://archive.ph/cg4we I do not like UnitedHealth, I do not like our existing crop of health insurance executives, and I might even be viscerally glad at some level that the UnitedHealth CEO was killed in a world where justice clearly takes a back seat to greed, but I wish the headline didn't say "overcharged", because there's no established amount of markup that is the correct amount of markup other than what peop…

The article is about UnitedHealth's PBM, which negotiates rates and then earns revenue from drug manufacturers through rebates. Remember that insurance is part of Big Finance and involves a lot of clever instruments to shuffle around money, risk, and accountability. PBM's are one of those instruments. Our intuitive Econ 101 models of the industry don't always go far enough into the weeds when we're just reacting to headlines. This is one of those occasions.

https://content.naic.org/insurance-topics/pharmacy-benefit-m...

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#62

Post by shpongled »

NickC25 wrote: post #42
daveguy wrote: post #23

Earlier quoted context omitted.

Profit motives for medical / biotech research, yes. What innovations have insurance companies made in the last 100 years besides to squeeze out more profit?

A lot of that research is primarily done in university labs, mind you. On the taxpayer dime. Somehow the research escapes a lab and Pfizer manages to put some stupid name on it and reaps billions in profit.

It requires billions of dollars and a decade+ to translate academic research into a clinical outcome. Most academic research is not reproducible or robust enough to even be replicated outside of the lab that performed it - and this will only be discovered after spending millions of dollars of private funding.

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#63

Post by daveguy »

NickC25 wrote: post #42
daveguy wrote: post #23

Earlier quoted context omitted.

Profit motives for medical / biotech research, yes. What innovations have insurance companies made in the last 100 years besides to squeeze out more profit?

A lot of that research is primarily done in university labs, mind you. On the taxpayer dime. Somehow the research escapes a lab and Pfizer manages to put some stupid name on it and reaps billions in profit.

That's a fair criticism, although I've worked in both industry and research -- a lot more directed practical research to reach commercial viability happens in industry, whereas a lot of the fundamental research happens in academia. And as a sibling commented, a lot of unreproducible research comes out of academia. Also, there are spinoffs from academia regularly that allow the original researchers to profit directly from their efforts.

Still, that doesn't justify insurance companies siphoning off money for their shareholders. Especially in these cases where they own/control both the insurance company and the pharmaceutical distribution.

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#64

Post by jmyeet »

Just look at the per-capita spending on healthcare by OECD countries, basically all of which have universal healthcare except for the US [1]. So the US pays almost twice as much as #2 (Switzerland) for significantly worse outcomes and less coverage.

The US healthcare system is an unmitigated disaster that is a cautionary tale in how capitalism only promotes rent-seeking and regulatory capture. It's done with a service with inelastic demand, meaning the threat of violence since we are quite intentionally withholding lifesaving healthcare for the sake of the profits of completely unnecessary intermediaries.

[1]: https://www.oecd.org/en/data/indicators/health-spending.html

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#65

Post by dangus »

onlyrealcuzzo wrote: post #50
AlienRobot wrote: post #44

Earlier quoted context omitted.

I have good news! If you move it to the public sector, you will effectively pay doctors less money for the same work. That's because the way it works currently is that the doctors have to deal with private insurance bureaucracy. By freeing them from this responsibility, they have more time to take care of patients, which should effectively gets you more medical bang for your buck.

You're describing the federal system being massively more efficient - which is theoretically possible - but rarely happens in practice.

It is already established fact that Medicare is more efficient than private insurance. https://www.healthaffairs.org/do/10.1377/forefront.20110920....

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#66

Post by craigmccaskill »

onlyrealcuzzo wrote: post #37
porcoda wrote: post #7

Nothing is shocking about the insurance industry anymore since they’ve been pulling this kind of thing for years. To me the most shocking thing is the people who defend them. I understand the drive to make money and build huge businesses: what confuses me is that we treat human health the same as things that don’t directly impact the health of people. It seems to me that there are endless opportunities to get insanel…

I don't particularly care if health insurance is public or private. DIRECT health care labor costs (doctor's, nurses, etc) are ~40-60% of TOTAL healthcare spending. Smart people try to figure out ways to make our system better every day. If there was a silver bullet, we'd have already taken it. Health insurance profits are ~1.2% of total health care spending, the cost of running it is approximately ~4% more. It's alw…

Medicare administrative costs are around 2% of total program spending [1] compared to typically >10%. While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis.

The US gets a bum deal on costs and outcomes and while we can argue on which specific changes will move which specific needle I think it's clear that one of the major differences compared to the rest of the world is that running healthcare as a for profit enterprise has failed to deliver on the promise of good outcomes for as affordable a price as possible both on an individual and country wide level.

[1] https://www.politifact.com/factchecks/2017/sep/20/bernie-san...

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#67

Post by jsheard »

segfaltnh wrote: post #41
brightball wrote: post #26

Earlier quoted context omitted.

Does anybody defend them? I’ve been on the selection side as an employer and several others will probably echo what I’m about to say. Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable. United was quoted to me as almost 20% lower than current rate for our provider (before they are about to go up 20%). On premium alone they will save some people close to $500 /…

I feel people defend them by opposing any other approach to solving this. Politicians in particular say things like "preserving customer choice", which I think just means having the ability to select among all the terrible insurance companies who will treat you poorly.

That excuse doesn't even hold up because in places like the UK which have universal healthcare, private health insurance still exists alongside it as a "premium" option. That's more choice!

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#68

Post by Kon-Peki »

segfaltnh wrote: post #41
brightball wrote: post #26

Earlier quoted context omitted.

Does anybody defend them? I’ve been on the selection side as an employer and several others will probably echo what I’m about to say. Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable. United was quoted to me as almost 20% lower than current rate for our provider (before they are about to go up 20%). On premium alone they will save some people close to $500 /…

I feel people defend them by opposing any other approach to solving this. Politicians in particular say things like "preserving customer choice", which I think just means having the ability to select among all the terrible insurance companies who will treat you poorly.

> Politicians in particular say things like "preserving customer choice"

But that’s not shocking. Lobbyists and campaign donations make such behavior expected.

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#69

Post by dangus »

onlyrealcuzzo wrote: post #37
porcoda wrote: post #7

Nothing is shocking about the insurance industry anymore since they’ve been pulling this kind of thing for years. To me the most shocking thing is the people who defend them. I understand the drive to make money and build huge businesses: what confuses me is that we treat human health the same as things that don’t directly impact the health of people. It seems to me that there are endless opportunities to get insanel…

I don't particularly care if health insurance is public or private. DIRECT health care labor costs (doctor's, nurses, etc) are ~40-60% of TOTAL healthcare spending. Smart people try to figure out ways to make our system better every day. If there was a silver bullet, we'd have already taken it. Health insurance profits are ~1.2% of total health care spending, the cost of running it is approximately ~4% more. It's alw…

It is already established fact that Medicare is more efficient than private insurance: https://www.healthaffairs.org/do/10.1377/forefront.20110920....

6.1% profit margins is a lot when it should not be for-profit in the first place. Why is anyone making a profit off of administering necessary services?

What is the operating profit of your local firefighter brigade?

What is the operating profit of the interstate highway system?

What is the operating profit of your local water/sewer department?

Not a single person in this country doesn't need healthcare at some point. It's not an optional for-profit good.

Re: UnitedHealth overcharged cancer patients for drugs by over 1,000%

#70

Post by this_weekend »

brightball wrote: post #26
porcoda wrote: post #7

Nothing is shocking about the insurance industry anymore since they’ve been pulling this kind of thing for years. To me the most shocking thing is the people who defend them. I understand the drive to make money and build huge businesses: what confuses me is that we treat human health the same as things that don’t directly impact the health of people. It seems to me that there are endless opportunities to get insanel…

Does anybody defend them? I’ve been on the selection side as an employer and several others will probably echo what I’m about to say. Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable. United was quoted to me as almost 20% lower than current rate for our provider (before they are about to go up 20%). On premium alone they will save some people close to $500 /…

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