Comment by chis
3 days ago
I think some critiques of American health insurance are simplistic, but this truly seems very bad. From the report:
> "Higher markups can also result in larger internal transfer payments from health plans to affiliated pharmacies, which may allow vertically integrated PBM-pharmacy-insurer entities to retain revenue and profits while formally satisfying the insurers' medical loss ratio ("MLR" ) requirements, but without providing the clinical care and quality improvements that the MLR rule seeks to promote. In addition, higher markups can result in significant patient cost sharing requirements because reimbursement rates are often correlated with point-of-sale prices, which can influence how much patients are required to pay."
In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM.
There is no complexity to the corruption and inefficiency of US healthcare. It has the highest costs and mediocre outcomes. It offers healthcare providers incentives to act even if they shouldn’t and allows insurers to profit directly from denying care.
It’s worse in practice than any system adopted by any peer nation regardless of the wide range of differing approaches to providing universal coverage.
Treating it as some uniquely complicated problem is deceptive. It’s broken because that keeps certain people wealthy and gives employers control over labor.
>In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM.
Most insightful comment in this thread. THIS is the crux of the issue, and we've allowed the likes of UHC to buy PBMs and other pieces of the supply chain / customer lifecycle because UHC lobbyists claim it would reduce costs across the board and also improve efficiency. Load of absolute bullshit obviously but here we are.
You just answered my question:
Is it the case that UnitedHealth and Cigna each own (or control) one of the "big three" PBMs? If so, that is a just crazy - the control insurance premium pricing, benefit decisions, AND the pricing of covered medications?
yadaebo wrote below "Medical Loss Ratio (MLR) is capped at 85% in the US which means 85% of revenue must go to patients". Does controlling a big PBM allow an insurance company a loophole?
It gets even better (quoting from ceejayoz down-thread):
>UHC is the largest single employer of doctors in the US.
https://news.ycombinator.com/item?id=42717812
4 replies →
Seems like it does. This is where the FTC needs to act.
Yes. I have been trying to figure out for years why the PBM system is so convoluted and seemingly so much more central to healthcare than it was, and this seems like it must be the reason.
> I think some critiques of American health insurance are simplistic,
At it's core, details are not really needed to show how atrociously inequitable the system is.
Medical is a very technical field, and the costs are obfruscated from most people. I'm not surprised laymen can't give a technical breakdown of what exactly is wrong with the health insurance field.