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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)

#91

Post by dd8601fn »

Legend2440 wrote: post #67
anon291 wrote: post #63

Earlier quoted context omitted.

A reasonable compromise would be a scheduled increase in the number of slots until it is eventually uncapped. Yes, this will reduce doctors salaries in the long-term. You know what else reduces doctor salaries? Importing medical doctors from foreign countries with worse wages and working conditions, and then grinding these individuals to the ground under the threat of immigration. The market finds a way, whether the…

Doctors salaries should be reduced, as should nurses and dentists. We pay them nearly twice as much in the US as in countries with socialized medicine.

As part of a policy position, I'm guessing that, "Doctors and nurses make too much money" ain't exactly a slam dunk.

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

#92

Post by Fire-Dragon-DoL »

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_…

Wow, I did not realize how deep the hole is

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

#93

Post by FireBeyond »

dd8601fn wrote: post #90
FireBeyond wrote: post #30

Earlier quoted context omitted.

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.

A surgery happens once. Glp1s are forever. $25k today or $15k/yr for 20 years?

GLP1s don't or shouldn't cost $1K+/month.

Gastric bypass surgery happens once. Many bypass patients require lifelong prescription nutritional supplements and all require lifelong lab monitoring.

Ulcer risks increase severalfold.

High risk of hernias, osteoporosis and complications thereof.

It's not just surgery and no immediate cost. But then again, any of those issues are options for denial, so...

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

#94

Post by treis »

ch4s3 wrote: post #68
treis wrote: post #57

Earlier quoted context omitted.

They can grow profits by capturing a larger share of the market.

After the ACA passed it's really hard for insurers to differentiate on policies because so much is mandated. They're essentially all identical products that are going to have similar prices.

That goes against the "insurers are intentionally raising prices" argument.

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

#95

Post by toast0 »

colechristensen wrote: post #54
toast0 wrote: post #46

Earlier quoted context omitted.

Public healthcare in the US can work. Most seniors on traditional Medicare like it. Make that available to more people, and bob's your uncle. I propose allowing buy into medicare at 5 years before regular eligibility. And a long phase in of lowering the eligibility age. Drop it by 6 months every year for 10 years, then 1 year every year for 10 years, then 2 years every year until everyone with work credits is eligibl…

Again, you're disconnected from reality. Do you want Donald Trump to be in charge of public healthcare? Please stop suggesting we make all of those changes unless you're willing to say you want him to be in charge of it.

Has he broken Medicare or VA health more than it already was?

I'll acknowledge he's playing games with Medicaid eligibility, but is he messing with the administration of care?

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

#96

Post by supertrope »

akramachamarei wrote: post #65
insane_dreamer wrote: post #41

Many problems with this article, but no time to pick them apart; needless to say, Noah's argument is thin. I will say this: profit margin % is not the yardstick by which we should measure whether insurance companies are responsible for high health care costs in the US.

Seems like a pretty good yardstick to me. Ultimately, it shows (partially) how much money is going through an insurer vs to an insurer. The revenue flow graph is included for UnitedHealth Group, for example, and about 2/3 is going through the company to medical providers. Any good hacker is familiar with Amdahl's Law, and the same principle applies here. You can optimize the insurance providers all you want and maybe…

The blog post is too simplistic an analysis. It ignores the second order effects of medical care financing reform.

Imagine if car engine oil changes had to go through car insurance. In such an inefficient equilibrium you might remark that only that insurer overhead is only 20% of a $300 oil change. Sellers always capture easy money that flows in from insurance money, credit, or government subsidies.

The fewer layers between a buyer and the seller, the lower the cost. Compare buying a bottle of ibuprofen at $5 for 200 doses compared with going to an urgent care and having a registered nurse hand you five doses at $200. Professional labor often used in medical care is expensive. Legalizing over the counter medication like birth control helps. Ironically a lot of poorly run companies try to shift HR policing of employees onto the healthcare system by requiring doctor’s notes. An insurance company processing claims is expensive.

Fee for service encourages more work ups and surgeries. The US caps physician residencies at a low count. Having the operations and financing as separate and adversarial companies adds a lot of friction. Hospitals charge 10x and the insurance brags they negotiated a 90% discount. No one health insurer has enough market power to push down outpatient, inpatient, or drug pricing. Without strong competition, automation, and price signals, healthcare spending is not going to get under control.

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

#97

Post by ethbr1 »

zephen wrote: post #49
chongli wrote: post #24

Earlier quoted context omitted.

> things like spurious denials drive up costs for them and for the providers Spurious denials? Or improperly filed claims?

Spurious denials. It's easy to find documentation of this. For example: https://pmc.ncbi.nlm.nih.gov/articles/PMC10391242/ https://phrma.org/blog/70-denied-how-insurance-denials-are-d... https://www.forbes.com/sites/joshuacohen/2026/05/04/independ... Anecdote is not the singular of data, but when my late wife was dying of cancer, the oncologist was attempting to follow standard care procedures. Preauthorizations were…

It's both.

Medical fraud is like retail stock shrinkage or fraudulent credit card charges -- no one on the customer side is aware of it, because it's handled on the other side and baked into pricing.

But there are substantial amounts of both straight fraud and too aggressively up-coding / over-billing.

The meta problem is that the because of the nature of the industry (legitimate volume dwarfs fraud), it's more financially impactful to pull levers that impact legitimate volume (read: prior auth requirements).

The anti-fraud systems are also pretty robust. As you'd imagine, insurers have been dealing with this for more than a few decades by now.

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

#98

Post by supertrope »

peyton wrote: post #88
tqi wrote: post #82

Earlier quoted context omitted.

It doesn't require collusion, just misaligned incentives. "Perversely, with the MLR requirement capping profit margins and administrative costs, insurers are discouraged from containing health plans’ premium increases. Economists have noted that the MLR requirement effectively turns health insurers into “cost-plus” businesses: If insurers’ predicted premiums are less than the actual medical care spending on claims, i…

That’s an opinion from an economist along with prior behavior, not reality. I’ve talked to one of the guys who worked on the ACA, and his take was basically providers will do things like e.g. buy up all the cardiologists in an area, then jack up prices across the board. Employers need to provide a certain bundle of services under the ACA. That’s where people are taking advantage.

They’re locked into a red queen race. Providers merge to gain scale and negotiation power. Insurers merge to gain scale and negotiation power. The ACA encouraged scaling up to drive down unit costs, but it just resulted in companies scaling up to protect their margins.

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

#99

Post by ch4s3 »

treis wrote: post #94
ch4s3 wrote: post #68

Earlier quoted context omitted.

After the ACA passed it's really hard for insurers to differentiate on policies because so much is mandated. They're essentially all identical products that are going to have similar prices.

That goes against the "insurers are intentionally raising prices" argument.

Not really. They're highly regulated in their offerings, and the government mandates how much they spend on care vs. overhead. They can't effectively compete so the only option is to negotiate slightly higher payments to providers and PBMs every year so they can take more profit in absolute terms.

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

#100

Post by chongli »

zephen wrote: post #49
chongli wrote: post #24

Earlier quoted context omitted.

> things like spurious denials drive up costs for them and for the providers Spurious denials? Or improperly filed claims?

Spurious denials. It's easy to find documentation of this. For example: https://pmc.ncbi.nlm.nih.gov/articles/PMC10391242/ https://phrma.org/blog/70-denied-how-insurance-denials-are-d... https://www.forbes.com/sites/joshuacohen/2026/05/04/independ... Anecdote is not the singular of data, but when my late wife was dying of cancer, the oncologist was attempting to follow standard care procedures. Preauthorizations were…

None of your links provides data on spurious denials. The third link does provide this statistic:

"Over a six-year period between 2019 and 2025, almost half of a large set of denied health insurance claims in New York state were reversed when the cases reached independent review organizations, comprised of clinicians unaffiliated with insurers"

But that doesn't get into the reasons why the claims were denied in the first place. It doesn't tell us anything about bona fide spurious denials vs. improperly filed claims (mistakes in the paperwork), clerical errors, or clients placed under investigation for claiming too early (after applying) or too often (making a lot of spurious claims), or care providers who do the same.

Insurance companies are concerned with adverse selection and moral hazard. A client who files a lot of claims shortly after getting insurance raises the suspicion that they were not honest about their health prior to applying. Similarly, a client who claims every drug a pharmacy carries raises other suspicions.

Of course, most clients aren't like that, but a not-insignificant minority are, and a small number of clients can file a very large number of claims.

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