4 ms·

Read this to find answer: http://fortune.com/2014/02/12/why-aol-ended-up-spending-millions-on-distressed-babies/ http://fortune.com/2014/02/12/why-aol-ended-up

by ninv 11y ago

Read this to find answer: http://fortune.com/2014/02/12/why-aol-ended-up-spending-millions-on-distressed-babies/ http://fortune.com/2014/02/12/why-aol-ended-up-spending-mill... I thought Tim Armstrong(AOL) is evil but Jeff is on another level. At least AOL did not fire the mother.

chollida1 11y ago
The AOL issue is completely separate. AOL self insured which is why they paid out of pocket. Amazon has proper insurance.
superuser2 11y ago
This is a ridiculously roundabout way of pointing out self-insurance. The main reason you are not an insurance company is that insurance only works at scale. But if you have a big enough pile of cash to effectively run your own insurance company, then you can go pay Humana (or whatever) a lot less to just handle the paperwork instead of the actual insurance. It's often a good way to provide better coverage for your employees and spend less money on it, since you aren't paying an insurance company for participation in the risk pool. But then this does create conflicts of interest where the company is directly incentivized not to pay out for employee health. This isn't particularly worse than the private model; private insurance companies are always incentivized not to pay out. This is why we need single-payer. You need an actor without a profit motive, and government is it.
- chimeracoder 11y ago
  > This is why we need single-payer. You need an actor without a profit motive, and government is it. That's a really common talking point for single-payer healthcare, but it unfortunately it doesn't hold up under scrutiny. Government-run agencies have the exact same incentives for profit as private companies do, even if they don't use the terms "profit", "margin", and "P/E ratio". Ironically, the closest thing we have to single-payer healthcare model is Medicare[0], which absolutely does have all the problems associated with a profit motive. In many ways, it's worse, because Medicare is able to set prices across the board by fiat, is not required to negotiate with providers, and is essentially mandatory for providers (so providers just have to swallow whatever reimbursement rates Medicare offers). As a result, providers make an operating loss on Medicare patients[1], to the tune of 7% nationwide. Think about it from Medicare's perspective. You have to balance your books at the end of the year. Do you either (1) ask Congress to raise taxes to increase your budget and hope they act quickly, or (2) lower the price you decide to pay for services, knowing that it will have zero impact on whether or not providers will still perform services for you? Unsurprisingly, they choose (2). Also, ironically, most patients who are happy with their Medicare plans[2] are actually using privately managed Medicare plans anyway. So they're essentially opting into profit-driven insurance anyway, with the only difference being that their premiums are being "subsidized" by their past tax withholdings. [0] There's also the VA, but single-payer advocates usually balk at that comparison since the VA actually operates the medical practice itself, unlike the single-payer models typically proposed. [1] This means that they make a loss even before accounting for any overhead, such as salaries, or markup. [2] And at the rate that MA is increasing, pretty soon the majority of all Medicare patients altogether.
- mring33621 11y ago
  Better coverage? What a joke. In the US, self insurance is a way for corporations to avoid state and local laws regarding health care through the use of ERISA. For example, if your state mandates that health insurance plans must cover a minimum set of infertility treatments, ERISA, when invoked through your employer's new self-insured plan, let's call it PlanX, overrides the state mandate and allows PlanX to decline coverage for those same infertility treatments. Yes, I have experienced this first hand.

by ninv 11y ago

chollida1 11y ago

The AOL issue is completely separate. AOL self insured which is why they paid out of pocket. Amazon has proper insurance.

superuser2 11y ago

This is a ridiculously roundabout way of pointing out self-insurance. The main reason you are not an insurance company is that insurance only works at scale. But if you have a big enough pile of cash to effectively run your own insurance company, then you can go pay Humana (or whatever) a lot less to just handle the paperwork instead of the actual insurance. It's often a good way to provide better coverage for your employees and spend less money on it, since you aren't paying an insurance company for participation in the risk pool. But then this does create conflicts of interest where the company is directly incentivized not to pay out for employee health. This isn't particularly worse than the private model; private insurance companies are always incentivized not to pay out. This is why we need single-payer. You need an actor without a profit motive, and government is it.

chimeracoder 11y ago
> This is why we need single-payer. You need an actor without a profit motive, and government is it. That's a really common talking point for single-payer healthcare, but it unfortunately it doesn't hold up under scrutiny. Government-run agencies have the exact same incentives for profit as private companies do, even if they don't use the terms "profit", "margin", and "P/E ratio". Ironically, the closest thing we have to single-payer healthcare model is Medicare[0], which absolutely does have all the problems associated with a profit motive. In many ways, it's worse, because Medicare is able to set prices across the board by fiat, is not required to negotiate with providers, and is essentially mandatory for providers (so providers just have to swallow whatever reimbursement rates Medicare offers). As a result, providers make an operating loss on Medicare patients[1], to the tune of 7% nationwide. Think about it from Medicare's perspective. You have to balance your books at the end of the year. Do you either (1) ask Congress to raise taxes to increase your budget and hope they act quickly, or (2) lower the price you decide to pay for services, knowing that it will have zero impact on whether or not providers will still perform services for you? Unsurprisingly, they choose (2). Also, ironically, most patients who are happy with their Medicare plans[2] are actually using privately managed Medicare plans anyway. So they're essentially opting into profit-driven insurance anyway, with the only difference being that their premiums are being "subsidized" by their past tax withholdings. [0] There's also the VA, but single-payer advocates usually balk at that comparison since the VA actually operates the medical practice itself, unlike the single-payer models typically proposed. [1] This means that they make a loss even before accounting for any overhead, such as salaries, or markup. [2] And at the rate that MA is increasing, pretty soon the majority of all Medicare patients altogether.
mring33621 11y ago
Better coverage? What a joke. In the US, self insurance is a way for corporations to avoid state and local laws regarding health care through the use of ERISA. For example, if your state mandates that health insurance plans must cover a minimum set of infertility treatments, ERISA, when invoked through your employer's new self-insured plan, let's call it PlanX, overrides the state mandate and allows PlanX to decline coverage for those same infertility treatments. Yes, I have experienced this first hand.