Comment by Aurornis
2 days ago
> Just look at health insurance companies for a prime example: they make profit by denying claims.
This has been repeated so many times that I think people don’t understand just how small the profit margins are for health insurers. Low to middle single digit percentages. As low as 2-3% in recent years, and much lower than the average S&P 500 corporation.
There are also non-profit insurance companies out there. Their rates are not appreciably different, as you’d expect after seeing how low the profit margins are in for-profit insurers.
I also think people don’t realize that countries with nationalized health care also deny procedures, have pre-approval processes, require step therapy, and will not authorize procedures they don’t believe to be medically necessary or to have enough evidence. There is no health care system in the world which will simply approve and pay for every request.
So while health insurer profit margins are convenient bogeyman, if you deleted their profits entirely from the system it wouldn’t move the needle on costs. It also wouldn’t open the floodgates for approving everything, because no health care system will allow unlimited services. The amount of excess and unnecessary care would be astronomically expensive. I do agree that we need a more robust system in place for ensuring that incorrect denials don’t happen, but health insurance profit margins are barely a blip on the overall cost of health care in the United States.
It’s a combination of high prices for services, American’s unusually high utilization of health care services, and very high rates of drug prescribing that mostly contribute to the cost. I think most Americans would be surprised to discover that a lot of nations with nationalized health care would also be restrictive in their access to many services and prescription drugs. For as much as we talk about insurance companies denying claims, Americans still get far more services and prescriptions than most of their counterparts in other countries.
i have no doubt that other countries have some problems in their healthcare systems too, but i think you are downplaying a few key points:
1) united healthcare made 90 billion dollars gross profit in the last 12mo, and that's only one health insurance company. claiming that it's not a great business at a 2-3% profit margin ignores the scale of money involved, and ignores that the customer for health insurance is truly captive.
2) you're right that america has very high prices in healthcare. doesn't it seem bad that private insurance companies are incentivized to make things cost as much as possible so they can skim that 2-3% off the top? insurance companies negotiate and set prices for services and pharmaceuticals. they now own the pharmacy benefit management companies that would normally be incentivized to negotiate for lower prices.
i would expect in a public health care system that rejects procedures, they would follow consistent guidelines and rules. american health insurance companies will arbitrarily reject a percentage of procedures that they know they should be accepting in order to keep their profit margin in the right range.
i think it's hard for me to see the argument that health insurance companies are a net-positive or even net-neutral party in the united states. i don't think it's a coincidence that we have some of the highest prices and some of the worst outcomes.
> private insurance companies are incentivized to make things cost as much as possible
> will arbitrarily reject a percentage of procedures that they know they should be accepting in order to keep their profit margin in the right range
So which one is it? Do they want to spend more or less?
> i don't think it's a coincidence that we have some of the highest prices and some of the worst outcomes.
It’s not a coincidence either that doctor compensation is one of the highest in the world.
The insurer margins can be whatever small but when the same company also owns the hospital and drug distribution it doesnt matter.
Somebody in the process makes extreme margins.
Also americans cant be at same time avoiding going to hospital because of costs and “still get far more services than most of their counterparts in other countries”
Believe it or not there are countries where there is mandatory health insurance (your employer or you or state have to pay it) and doctors dont look at costs because they dont really know them. They for sure try to not be wasteful but nobody is second guessing obviously best treatment because it costs 40% more.
> doctors dont look at costs because they dont really know them
They know enough to prescribe only the pre-approved drugs and they know that things will happen at due time when the already budgeted people and equipment are available.
Sure they prescribe pre-approved drugs. They even prefer some brands which they know or are “sponsored by”. But afaik they dont care if they prescribe something expensive because it doesnt cost them anything.
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You are just making things up to fit what you already believe. We have a few huge publicly traded companies in this space that file with the SEC but reality is not what you are interested in.
What i am making up? That US healthcare has high margins?
“ study from Yale School of Medicine (YSM) found that large U.S. health care corporations spent 95% of their net income — totaling $2.6 trillion — on shareholder payouts over the past two decades, raising questions about industry priorities and their impact on patient care and affordability”
Whatever. Simply come to a decent EU country and see how much it costs you for a bad cold or a cancer. Then compare that to the same event in the US.
I've heard a horror stories about NHS and Canada's Medicare. Their systems are backed up, so treatment goes untreated for long periods of time.
Presumably healthcare professionals are performing as many surgeries as they can per day. Just because one person was denied, doesn't mean another person isn't approved.
For example, I'd rather get cancer in the USA than UK: https://www.politico.eu/article/cancer-europe-america-compar...
We're about to do to Medicare what the UK has been doing to the NHS. Government programs don't work when you cut all their funding. There are plenty of normal countries with functional healthcare systems.
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Leaving aside that the article is about the EU and largely says less about where is better to have cancer and more about where you're statistically more likely to be an old smoker and get cancer, it says it's better to have cancer in the US when you're over 65 and therefore get the socialised healthcare.
Get cancer aged 25 and you may be in some trouble.
As long as you can get past your GP and actually get the diagnosis the system works pretty well. Get onto the Two Week Wait, and you automatically will if your diagnostic test is positive or falls into the needs further investigation category, and that's highly competitive with, say American time to intervention: https://pmc.ncbi.nlm.nih.gov/articles/PMC6396925
The typical UK "horror story" fuck-up is your GP fobs you off over and over until you turn up in (overwhelmed due to people who can't get GP or social care) A&E with advanced and now-incurable cancer, they scan you, say "why the fuck haven't you been referred months ago that's atrocious", and then you die. GPs are all private in the UK and get charged more when they refer to hospitals. Either it's a traditional small partnership where the GPs themselves are invested or it's a kind of consultancy where a company employs GPs on contract and puts pressure on them to improve returns/cut costs. Either way, that's where the profit incentive comes in and coincidentally, this area is what kills people.
The GPs aren't themselves at fault mostly, they also need more funding and staff, but both have been cut drastically. I am, however, deeply suspicious that companies cut from the same cloth as Serco, Capita and G4S will not have patient outcomes anywhere in mind except under "cost centre".
Did you read the article?
A big reason the US does better is Medicare (socialized medicine) not because we suffer for-profit insurance.
I'm interested in your point, but do you have any articles backing up your statements?
Oh bloody hell.
It astounds me how so many people can have such strong opinions about systems they have so little experience with.
I've lived long term in 4 countries (Canada, USA, Japan, Germany) and have dealt extensively with the medical systems in all of them (plus some experiences in Portugal and France).
Every system has its warts, and this is the first thing that naysayers will latch onto, of course. People love to use tu-quoque as a defense mechanism. "See? They're just as bad as we are because you have to wait sometimes, and look at this extreme case right here! It's probably even WORSE than us!"
The fact is, none of the systems are really that bad (with the EXCEPTION of the American system). There's a reason why travel insurance companies have two tiers: All of the world EXCEPT America, and all of the world INCLUDING America.
Have I had to wait for a procedure in Canada? Sure, but they do a pretty decent job of triaging, so yeah outside of the HORROR STORIES (of which you can find anywhere if you dig enough), it's pretty damn good. In Japan I paid a percentage of costs (which are pretty damn reasonable). In France I actually didn't have insurance, so I had to pay FULL price when I came down with pneumonia: 50 euros for the doctor and the antibiotics. In Portugal, I caught COVID, and got treatment within 2 hours of arriving at the hospital in Lisbon.
If you haven't actually been in the medical system of another country, you don't know what you're talking about.
> If you haven't actually been in the medical system of another country, you don't know what you're talking about.
Being in the medical system doesn’t give you a leg to stand on either.
I grew up with insurance and have insurance now in the US. I’ve never had problems getting medical care and the worst year was ~$1000 out of pocket.
The conclusion from that isn’t that it’s a good system for everyone and nobody who complains knows what they are talking about. It’s that anecdotes of good or bad treatment are meaningless.
>Being in the medical system doesn’t give you a leg to stand on either.
If anything it gives one an incentive to see the problem in a way that doesn't threaten their paycheck.
Every nurse will say they're over worked. Every paper pusher will say their job is essential. The guy selling overpriced gloves to the hospital, the landscaper making the grounds look like a country club, they all have justifications as do the people paying them. And they're all on the take to some degree. The whole system is one of top to bottom plausibly deniable unneeded expenditure. Nobody not at the very top is getting rich off it just because so many are in on it. But the fact that they're not getting rich doesn't mean it's not a waste of everyone's money.
> I also think people don’t realize that countries with nationalized health care also deny procedures, have pre-approval processes, require step therapy, and will not authorize procedures they don’t believe to be medically necessary or to have enough evidence
Lines in private medical care are shorter because people with no insurance don't get in line.
You can assert that but the US spends more while having worse outcomes.
As long as you have money or good insurance US is WAY way better than pretty much every other country in that regards.
Having seen the results of both, I think i'll take the Australian current system.