- cross-posted to:
- business@lemmy.world
- cross-posted to:
- business@lemmy.world
…
Private insurance companies have earned the public’s distrust. They routinely put profitability above their policyholders’ well-being. And a system of private health insurance provision also has higher administrative costs than a single-payer system, in which the government is the sole insurer.
But the avarice and inefficiencies of private insurers are not the sole — or even primary — reasons why vital medical services are often unaffordable and inaccessible in the United States. The bigger issue is that America’s health care providers — hospitals, physicians, and drug companies — charge much higher rates than their peers in other wealthy nations.
…
You must log in or # to comment.
I hate the argument that it’s not the insurance companies fault for high prices. If they are struggling so much, how come they are so fucking profitable.
Lets fix both, and not complain about the order if we make incremental progress one-at-a-time.
how come they are so fucking profitable.
UHC has a profit margin around 6%, whereas Anthem’s is around 3%. Those are not particularly high. For comparison, Toyota (8%) and Home Depot (10%) are both more profitable.
It’s not useful to compare health insurance profit margins to other industries because the Federal Government requires that they spend 80% of all premium revenue on care. This is effectively a cap on profits and also creates an incentive for insurance companies to pay higher costs for care so they can make more profit.
they spend 80% of all premium revenue on care
True. Actually, large insurance companies need to spend 85%.
an incentive for insurance companies to pay higher costs for care so they can make more profit
That doesn’t make sense. Insurance companies have to pay health care providers for care. The more care costs, the less money is left for insurance companies. In fact, if health care costs are too high then the insurance company can go bankrupt.
That said, the converse is not true: insurance companies don’t directly profit by cutting health care spending. That’s because they need to use 80% or 85% of their revenue on care. However, cutting health care spending (by delay, denial, etc) allows insurance companies to lower their premiums.
And since people often want the cheapest possible insurance, lower premiums means more customers, which means more total revenue, which ultimately does mean higher profits.
Of course, the key assumption here is that customers will accept worse care if it means lower premiums. This is one of the few industries where you literally get what you pay for.
I think they are saying, even if they must spend 80% of premiums on health care, that leaves 20% for profits/admin. But if a premium is $100, $80 goes to care, $20 to the company. But if the price of care goes up and the price of premiums go up, then a $200 premium means $160 on care and $40 to the company. The company still makes more, even though the ratio of care/profit is the same, incentivizing the company to do what it can to make ALL COSTS go up, and raise premiums to match. If they can get premiums to $1000, that means $200 can be kept.
incentivizing the company to do what it can to make ALL COSTS go up, and raise premiums to match
Sure, but the problem is that they can’t control ALL costs, only their own.
If another insurance company manages to reduce their own costs (e.g. by paying anesthesiologists less), then that company will have an opportunity to lower premiums instead of raise them. And since insurance customers are extremely price sensitive, those companies that are trying to get to premiums to $1000 will see their customers switch to the one that keeps premiums at $100 or better yet $80.
All the insurance companies know this, which is why they are all trying to reduce own costs rather than raise them.
But for the most part, patients aren’t really their customers. Employers are. They may want to decrease premiums, but making changes is difficult and at most an annual event. It is very, very far from a free market in the US.
A 90 Billion dollar profit is OK with you?
GTFO with that. Lmao
When
insuranceinsidious corporations claim they’re protecting the common people from greedy doctors, I’ll believe the doctors’ point of view.It’s not even corporate insurance vs doctors. It’s corporate insurance vs corporate hospital who employ the doctors. A lot of doctors are pushed to up the numbers of patients they see by their corporate bosses even when everyone knows that will mean worse care.
Yeah, but then anesthesiologists could then just say they can only work a certain amount of time because it costs them too much money in billing and appeals. Thus rushing a surgeon that then has a set time limit. Any time an insurance company makes a decision about what care a patient needs over the advice of doctors, it will result in problems. Sure there are going to be abuses, but instead of a blanket policy, it should be the responsibility of the insurance company to investigate fraud and waste.
I mean what other job do they have to spend money on but reducing fraud and waste? Oh wait, they spend money on software that is designed to deny claims, so they can blame the software for being overzealous and not the policies.
Anaesthesiologist take over your breathing and control your physiology when undergoing surgery. I want them handsomely compensated.
Edit: also let’s be honest here. Anthem isn’t going to take the savings from paying physicians less and pass them onto you the consumer. They’ll take the savings and issue a stock buyback.2nd Edit: Turns out that the ACA has a provision preventing the pocketing of premiums. Thanks FlowVoid for pointing this out and unironically thanks obama. My first point still stands though.
They’ll take the savings and issue a stock buyback.
They can’t do that.
The ACA requires large health insurers to spend 85% of their income on health care providers. If they don’t (eg because they start paying less to anesthesiologists) then the savings must be used to reduce premiums or give rebates to customers.
Hmm I didn’t know this. But is there anything stopping health insurers from spending the money on businesses they own (i.e. their own clinics, pharmacies etc)? If not I still fear they’ll run off with the savings.
United Health actually bought a bunch of health care providers, so they basically own a good chunk of the entire ‘vertical’ and somehow still ended up denying record amounts of claims.
What I don’t understand is why Americans are still looking to the federal government to solve the issue, instead of getting together and building a non profit co-op to deal with health care. Do the insurance part, gain market share by being the ones that actually don’t deny valid claims, start/take over hospitals, start making your own generic medicine, etc. If you don’t have to make a profit and appease shareholders you can take over the entire market. Local/state governments could provide some of the seed capital for this and make it the ‘public option’ in that state.
What I don’t understand is why Americans are still looking to the federal government to solve the issue, instead of getting together and building a non profit co-op to deal with health care.
You’re surprised that normal people don’t just start up their own multi-billion dollar corporation with assloads of liability and assloads of government oversight?
It’s how it’s done in many countries. You can bootstrap off unions, churches, etc.
instead of getting together and building a non profit co-op
The Blue Cross Blue Shield insurers are either nonprofits or mutuals (the shareholders are the policyholders). So are many smaller insurers.
But nonprofit insurers are subject to many of the same pressures as other insurers. They need to keep premiums low, and they would go bankrupt if they paid every claim.
Likewise, the vast majority of hospitals are nonprofits. But nonprofit hospitals have to pay for medicines, doctor salaries, etc too. Most are barely scraping by and can’t fund clinical trials into novel genetic medicines.
Why would hospitals need to run clinical trials? Just provide the basic health care.
Oops, I read “generic medicine” as “genetic medicine”. I thought you were suggesting that hospitals start competing with pharma over new mRNA designs!
Yeah, you don’t need a clinical trial to make generic medicine. But you do need special facilities, which most hospitals probably would be unwilling to pay for.
It initially said genetic because of autocorrect, I just fixed it. And hospitals wouldn’t need to be making medicine, you need to start a corporation, like those guys that are trying to make a generic insulin. If you start selling those with even a small profit margin everything else would come down. The issue is that profits get extracted by every middle man in the system.
Well, when you deny a claim from a clinic you own then it’s very likely your “savings” are losses for your clinic.
I was thinking more along the lines of deny claims for clinics you don’t own but approving claims for clinics you do own. Effectively shifting premiums away from outside clinics and into your own pockets all while staying under the 80/20 rule.
Insurers already divide providers into in-network and out-of-network. They deny or pay very little for out-of-network providers, because they want their policyholders to stay in-network. The reason they prefer in-network providers is that they negotiate reduced/discounted rates with those providers.
Sure, they could outright hire those providers as employees, but that means they would have to start paying their entire salaries rather than just discounted fee-for-service. And that’s not necessarily a good idea, because health care clinics are not very profitable. Basically, this is the same question facing everyone who has to choose between hiring an employee and paying a subcontractor.
That said, some insurers do run their own clinics and hospitals, notably Kaiser Permanente.
Sorry, they don’t get handsome compensation. Not when they have to pay back those student loans.
The era of the rich doctor is over. Medical group and hospital CEOs are the ones getting rich these days.
Anaesthesiologists are not having trouble paying back student loans. It’s one of the highest paid specialties.
This article is BS as was Anthem’s policy. But, anaesthesiologists are doing just fine. If you want to feel bad for an MD, try pediatric oncologists or another specialty that isn’t in high demand.
My cousin is one, he is not wealthy. He is solid middle class, not sure it’s about putting workers against workers here
I don’t know why you think anyone isn’t having trouble paying back student loans at this point.
Because, I know MDs with student loans. I don’t know why you think _everyone _ is having trouble paying back student loans.
I’m not saying the whole student loan business isn’t fucked up. Or, that there aren’t lots of people screwed over by the system.
But, of all the the people with student loans, anesthesiologists are the least of concern. It’s just stupidly laughable to show concern for an anesthesiologist‘s student loans. They’re fine. It’s one of the highest paid specialties.
Anthem’s policy proposal was dangerous and fucking scary from a patient treatment perspective. Arguing against it from the perspective of the anesthesiologist‘s loan payments makes no sense. The anesthesiologist would still be getting paid well while the patient laid on the table in agony or dying from lack of treatment.
Anthem’s policy wasn’t going to leave patients in agony. It was going to cap how much anesthesiologists could bill.
There are already plenty of billing caps in medicine. Medicare has a cap for every single patient in the hospital.
When a patient reaches the cap they aren’t dumped to the curb in agony, that would be an instant malpractice lawsuit. Instead, the hospital works for free. The same thing (in principle) happens when your plumber offers a flat rate for a job but it takes a lot longer than expected.
That’s why a large number of hospital patients actually lose money for the hospital, but the hospital (and presumably these anesthesiologists) make up for it on the other patients. In the end it all averages out.
Anesthesiologists base pay ranges from $350k to $550k. I don’t think most of them are having problems paying back $200k in student loans.
A for-profit healthcare system is bad.
And I wish more mainstream outlets than Vox would talk about that. So many Americans are absolutely convinced that socialized medicine is a terrible idea. My mom watched British reality shows about hospitals on Netflix and if you would hear her talk about it, British people are dying in the streets because the ambulance doesn’t get there for half a day and you have to wait five years to see a doctor.
And I’ve told her that she’s watching a show put together by people who want you to see the worst possible side of things so you’ll keep watching, but she just doesn’t accept that.
I’m an American and I have to wait months to see a specialist. I think I’ll take my chances with socialized healthcare.
What kills me is this was literally the prime complaint against socialized healthcare. Then the covid lockdown hit and suddenly it takes 3 months for me to get an appointment with my primary doctor.
10 years before COVID I had to change primary care doctors because he was scheduled 3 months out. It got way worse after COVID, but the argument about long wait times was always overblown.
My specialist won’t even see patients anymore. You have to schedule to see a medical assistant, and even that is 12 months out.
Yep. Me too. Took me nine months to get a new neurologist when my old one retired.
Edit: Apparently there are at least three fans of the American capitalist healthcare system.
I think it was a five month wait to see if I had cancer. Luckily it wasn’t a bad one, eh?
Are you in the USA?
Health insurance companies are simply the wrong actors to be the vanguard against medical overcharging.
Vox, do you want to know why those medical service providers charge much higher rates? Gee…
I’ll give you a hint. It requires a large bureaucracy and staff to deal purely with interfacing with this behemoth that’s somehow part of the healthcare but has nothing to do with actually providing the healthcare. You guessed it! It’s still the health insurance companies. I strongly disagree with the article conclusion.
Health insurance companies actually incentivize more expensive medical care because it allows them to show you the bigger discount and punish others for trying to go around the insurance mafia. Their goal is to force everyone to pay the toll, the maximum possible toll, and provide the least amount of service possible in doing so.
Don’t blame doctors. Hell, don’t even blame the hospitals even though they do have crappy administration. The heart of the problem is private insurance. Insurance games the system, and people die.
I worked in a hospital for a long time and oversaw an entire team of people whose only job was to interface and argue with insurance companies. For my small hospital, we had 7 people doing this averaging $85-$90K per year each.
And don’t get me started on unfunded care. Since we live in Texas, which has not expanded Medicaid, there are a ton of people who end up in the hospital with no insurance and who will never pay a cent because they literally can’t. Hospitals try to make up that funding gap by raising rates on everyone who does pay. We’re already paying for other people’s healthcare this way, I wish we would just nationalize health insurance and eliminate insurance companies entirely.
I think there is some blame to passed onto for-profit hospital conglomerates. They degrade care to drive down costs to maximize profits. They force doctors to do min-maxing and game theory shit to get bonuses that don’t actually help the patients.
I agree that insurance companies are the biggest issue, but let’s not absolve the big hospital corporations.
It’s because the ceos aren’t fearing their lives.
Health insurance companies actually incentivize more expensive medical care because it allows them to show you the bigger discount and punish others for trying to go around the insurance mafia
Wut? I don’t expect a coherent response since lemmy loves conspiracy theories, but where did you get this from?
See how it’s “a big insurer” so we don’t kill them?
And a system of private health insurance provision also has higher administrative costs than a single-payer system, in which the government is the sole insurer.
Clearly havent seen the german system
I haven’t. What’s up with the German system?
We don’t have “one” health insurance, we have like 90 of them.
https://www.krankenkassen.de/gesetzliche-krankenkassen/krankenkassen-liste/
While a few of them are the same with the same administration, it’s still like 50 individual ones. A few of those are also “special” and only accept certain people. But each has their own administration, “CEO” of sorts and people that have to be paid.
The german healthcare system is mismanaged beyond belief and complete and utter dogshit. Don’t get me wrong, still better than the american system, but considering I’m paying 421,76€ a month in health insurance (and my employer pays the same amount aswell), I should be able to expect a certain level of service, but most of the money is lost in these administrations as it seems.
Many stuff isn’t paid for either. Early checkups, for example, aren’t covered. My girlfriend had to have her blood levels checked and it wasn’t covered by the insurance which cost her like 500€.
It’s just a fucking disgrace how bad the healthcare system in this country is.
