Comment by Sevii
6 hours ago
The problem is that health insurance companies squander immense amounts of money on adjudicating claims. Huge amounts of GDP are spent on fights between insurers and providers over what is covered.
6 hours ago
The problem is that health insurance companies squander immense amounts of money on adjudicating claims. Huge amounts of GDP are spent on fights between insurers and providers over what is covered.
You can deduce that cannot be true using the medical loss ratios, which is money flowing out to healthcare providers. At roughly 85% or so, that means 15% is left for the entirety of the rest of the business, including adjudication.
https://www.kff.org/private-insurance/medical-loss-ratio-reb...
https://www.oliverwyman.com/our-expertise/insights/2023/mar/...
That is not to say the adjudication process is done well. In fact, it is hugely wasteful, either intentionally or unintentionally, and the problem is that the government does not audit the insurance companies often enough, nor does it levy penalties sufficient to incentivize proper and efficient adjudication.
The government should be doing constant random checks on claims to see if they were processed and adjudicated in a timely and efficient manner with a sufficiently low error rate on behalf of the adjudicators, and the government is basically doing none of that.