Comment by ninja3925
2 days ago
> Just look at health insurance companies for a prime example: they make profit by denying claims
Despite being from Europe, I find this to be a shocking and erroneous interpretation.
Clearly, health insurances have the duty to allocate limited resources (“premiums”) across members. Denying and accepting claims is the mechanism to that end. Accepting all claims would increase premiums and reduce membership (by pricing people out). Would that an ideal state? Clearly not.
The point was not that all claims should be accepted. It's that adding a profit incentive to denials leads to worse outcomes.
Healthcare debates in the United States are difficult because so many assume that insurers have very high profit margins and that arbitrarily denying claims is the reason they have high profit margins.
If you look at the actual profit margins it’s low single digit percentages. You could eliminate profits altogether and virtually nothing would change. We even have non-profit insurers to look at
It’s strange how the high prices of drugs and services aren’t drawing the ire of people who complain about costs. Drug prices are nearly 3X higher here than international averages and doctors here also earn a lot more with in many cases fewer restrictions on prescribing or offering services than in most EU countries.
The meme that insurance company denials are generating huge profits comes mostly from the public murder of a health insurance CEO last year. For some reason people assumed that insurance companies and their profits must therefore be the core problem with high costs, without making the effort to see where the money actually goes in our health care system.
As you said, there is no health care system which does not have approval processes, deny requests deemed unnecessary, require step therapy, and establish standards of care.
> If you look at the actual profit margins it’s low single digit percentages.
Didn't I see somewhere that that's an artifact of Hollywood-style accounting? If you spin up a sub-business then have that sub-business charge high fees for services you can't live without, the main business might even be losing money!
What's indisputable is:
* in America, we pay more for less healthcare
* most of the money does not go to the doctors and nurses actually providing services
* it also does not go to research, which is funded elsewhere (assuming it keeps being funded at all)
* it's often possible to pay less for a service if you pay the provider directly rather get your insurance involved
I’m not sure where you’re getting your info, but it seems like well over half of US healthcare spending is on wages for doctors, nurses, and other patient-facing staff (such as RMTs, techs, and physios). Administrative and drug costs are definitely above the OECD average, but not the sole drivers.
Here is one source, but there are many more: https://news.harvard.edu/gazette/story/2018/03/u-s-pays-more...
> If you look at the actual profit margins it’s low single digit percentages. You could eliminate profits altogether and virtually nothing would change. We even have non-profit insurers to look at
Look at administrative overhead instead of profit. People understand that there are problems with the system, and maybe they’re misattributing the problems, sure.
The "profit" isn't money in the bank. It's overpaid bullshit jobs and work and perks that benefit the people in and around the organization.
It makes me understand better how the horrors of the history books came to be when the same exact demographics who'll complain about nominally nonprofit hospitals or educational institutions paying their people insane sums and doing random BS to burn money or comparable behavior from charity entities set up as tax shields by the wealthy refuse to see that having a profit cap creates an incentive for the insurance industry to behave the same way.
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they’re the obvious scapegoat so they get blamed. i’m ok with that.
the US needs a healthcare system that doesn’t have a profit motive. (Or limit it to a second, premium market)