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Comment by spease

1 day ago

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.

> Insurance executives have a fiduciary duty to maximize the profit of the company.

Probably not. Many insurance companies are not "for profit" companies(not a 501c3, something else). Certainly some are, but most of the giant ones, State Farm, etc are not. Most are Mutual Insurance companies: https://en.wikipedia.org/wiki/Mutual_insurance which handily includes a list of them.

I.e. they are operated more like Vanguard, the investment firm than they are Fidelity(a private for profit company) or Schwab a public for-profit company.

Also, this fiduciary duty thing is not really true, but people think it's true. They do have a duty to work in their shareholders best interests. Lately that's been taken to mean profit above all else, but that's a recent(last few decades) interpretation.

> 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.

It depends on if they share the cost(s) of keeping patients healthy or not. Incentives matter. If they are incentivized to keep people healthy, instead of just treating X disease today, it would be a different conversation.

> 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

Agreed. But mostly it's just excess waste as far as I know. I'm not an expert in healthcare, so I'm at best a armchair quarterback here.

>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,

Good point (buying food would be a nightmare if it worked like American health care!) but that's a different argument from the one made above in the thread, that a profit motive in a vital good inherently creates perverse effects.