Comment by novok
1 day ago
Health insurance's issue is probably how it induces pure waste everywhere as everyone has to play this dance of ever escalating paperwork which consumes a lot of labor. It's not profit, it's waste. Same with the ever increasing amount of admin. Why is that admin increasing? I estimate insurance or requirements created by insurance is part of the cause.
There is also a lot of other smells of a lack of a competitive market. Very opaque pricing, limits to how many hospitals can be opened in a region, needing paperwork to push against that limit, limits in residency slots, the entire hazing ritual of residency in the first place, limits in opening medical schools, ever escalating requirements to become a doctor, restrictions against doctor owned hospitals or clinics, the fact something like an epipen is still not out of patent and not having many clones by now, large barriers to make medical devices and medications, while simultaneously having great issues with generic drug quality, a horrible food system compared to Europe, while simultaneously having a much harder regulatory state medically compared to europe, etc.
This is spot on. It’s not that I think health insurance companies are making insane profit margins. It’s that their very existence in the system is a pure negative and in fact a moral blight. Inflicting profit into a system that is entirely dedicated to human health is by definition a conflict of interest for basically everyone involved, even if it operated at a hypothetical 100% efficiency.
Lots of things necessary for life are run by for-profit businesses — for example, food production. Do farmers have a “conflict of interest”? What about healthcare in particular makes profit immoral?
If the grocery store decides to remove the prices from everything, and require its shoppers to first call its billing department only open until 5pm to receive a set of numbers, then call their third party subscription service only open until 6pm to receive a non-binding estimate, for every item in their grocery list, then wait weeks or months for the grocery store to have its cashiers take time away from checking customers out to petition the third-party subscription service to allow its customers to buy any item deemed to require prior authorization…
You can typically endure hunger for 15 minutes for the time it takes to go to another food store.
On the other hand, if you are bleeding out in the ER, no such luxury exists.
Insurance executives have a fiduciary duty to maximize the profit of the company.
If the company makes a profit off of treating patients, then it has a financial incentive to not approve treatments that would make patients better.
If the company loses money treating patients, then it has a financial incentive to deny treatment as much as possible.
Unless a legal structure is found which scales profit with quality of care, ethical choices will be at odds with the fiduciary duty of the company officers. Having an AI say “no” and putting someone on hold is a lot less expensive than paying out for a cure that cost billions to develop.
In the case of government-run healthcare, the government at least sees the consequence of poor health outcomes in decreased productivity, competitiveness, gdp, and/or tax revenue, as well as increased use of social services.
In other words, if the insurance company refuses to treat you, it costs the government money to pay for welfare indefinitely, not the insurance company.
There are lots of perverse incentives at work, and vanishingly few people even try to understand them, I think because most people simply don’t believe it could possibly be as bad as it is. And by the time they learn otherwise, they care more about getting healthy again than overextending themselves trying to solve a massively complex problem.
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Oh yes, these things are exactly equivalent. Problem is, nothing about the health system's incentives aligns with consumer benefit. The most profitable outcome for an insurer is that everyone pays premiums and never uses any services. The most profitable outcome for hospitals is that they charge maximum prices for every service and yet don't really fix underlying problems or prevent future problems. Hospitals profit the most off patients that need a ton of care and have deep pockets. They lose money on giving care to people who cannot afford it and won't pay. They lose money in the long run when preventive care prevents later catastrophic (and expensive) conditions later. Pretty much all of the profit-maximizing forces in the for-profit system are deeply unethical.
If you're going to tell us that because health care providers and health insurance companies are some kind of magic counterbalance against each other that benefit consumers, uh, nope.
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I don’t think health insurance is actually insurance, but I have seen little evidence that it has “insane profit margins”. From what I’ve read, ‘health insurance’ has middling profit margins relative to other insurance specialties; where are you getting that view/data?