Comment by potato3732842 2 days ago
You don't need the insurance industry sticking their dick in most of the business they do. Insurance is for the foreseeable but unforecastable, not for routine things.
The additional overhead is substantial and adds huge marginal cost for routine things and say nothing of the principal-agent problem
> You could zero out every dollar American insurers make and not materially alter consumer health care economics; their share of the health care pie is almost literally a rounding error.
What are you implying with this comment?
I generally enjoy reading your comments, as they provide some interesting and often unique insight.
But this one…
Either it’s something I don’t understand, or it has the potential to be incredibly misleading in its implications.
The impact of American insurers on direct costs, indirect costs, and opportunity costs of healthcare is much more than a rounding error. The incentives amongst various actors, with insurers in the middle, are massively misaligned. I’m sure you know this.
Ask patio11 about insurance in Japan. It’s incredibly affordable, it’s quite good, and there are both public and private options. It’s not perfect by any means, but I miss the healthcare options in terms of both cost and quality that I had in Japan.
I think people mistake me for saying that the American status quo is acceptable. It isn't. We overpay (and overprescribe) wildly above peer countries. It's very bad. The only point I'm making here is that the two most common villains in these narratives --- insurers and pharma companies --- mathematically account for only a small portion of spending. Insurers in particular act as sin-eaters for the providers, who dwarf them in size.
The primary reason Japan's healthcare is affordable is because the government institutes strict price controls on healthcare providers. Every procedure, every service, every medical device and every drug has a price fixed nationally and those prices are below even what Medicaid pays.
Normally, price controls would lead to shortages, but with healthcare, there's always shortages with or without price controls and every country has to, in some way or another, ration care anyway.
If you tried to implement that here, doctors would riot (read: use their ridiculously powerful lobby to kill it or get the fee schedule increased - which they did every year for a decade when medicare dared to institute cost controls. see: medicare doc fix).
The magic of the system is that it's structured so that people like you can say things like that and not even be lying in any provable way.
Sure, it's not the actual insuring that's costing that much but the massive breakdown of incentives from increasingly vertically integrated healthcare companies (some of whom are insurers, some of whom own insurers) owning increasingly large shares of everything is clearly causing cost to spiral. The industry is making work for itself at out expense. Whether that work happens in the insurer's office or the billing office of the clinic that's owned by the insurer isn't really material. And of course everyone in the process gets a cut so they fight for their bit of it. Doctors used to drive the same crappy cars and live in the same modest houses as the rest of us. Nurse didn't used to be the "made it in life" job for people who come from poor backgrounds.
Dial it back a bit. I just made an extremely banal and citable claim about US health care. I agree with you (trivially verifiable from the search bar at the bottom of this page) about the practitioner compensation racket.
They add costs in the form of hospital administration which wouldn't be their books.
You could zero out every dollar American insurers make and not materially alter consumer health care economics; their share of the health care pie is almost literally a rounding error.