Comment by ChuckMcM

Kaiser is one example where incentives align, because they're an integrated HMO, running both the insurance and the care side of things. It's kind of like an opt-in single-payer organization. Their model is that they charge you X/month for care, and then everything is billed internally, with Kaiser clinics treating Kaiser plan members. So if they can bring costs down, that helps them; since nobody external is reimbursing for services, there is no advantage to billing expensive tests.

It's all about speed and costs. The finger-prick is a distraction; phlebotomy is not a huge deal.

Instead, the important things are the turn-around-time and billed cost. If Theranos can offer 4 hour turnaround and a clinic/hospital cannot (or even get close), they will pay for it because it is good for doctor productivity and patient outcomes. If Theranos can maintain a half-medicare cost structure, that's also good for the provider because they can expand their margins.

Additionally, Theranos might do deals with insurance companies such that they reduce their reimbursements/push providers to use Theranos, which reduces the insurer's costs. The outcomes-case is even more pressing for an insurer these days.

Now, none of these directly translate to lower insurance premiums, but that doesn't mean that there aren't economic reasons to adopt the service.

> From the outside, it seems like the entire healthcare industry is built on being purposefully inefficient so as to create large costs that they can in turn mark up.

This is generally untrue, as much as it is a public perception. The system lacks simplicity and thus comes across as opaque; this is its failing. Its complexity is not malicious, though.

what economic incentive does the healthcare world have to adopt something like this?

Not much, which is why this service should not be offered through the standard healthcare system. I can see two other ways to do it:

(1) I walk into a drugstore, sit down at the testing machine, select the tests I want, swipe my credit card, and the machine takes a drop of blood from my finger, runs the test, and gives me a printout of the results.

(2) Home testing kits for every common lab test, not just blood sugar.

That's a rather cynical view. You don't think hospitals have any incentive to improve care, implement new products or cut costs?