4 ms·

Don't have a cite offhand but insurance industry employment has gone up by quite a lot (close to double if I recall correctly) since 2000. Let's say I'm an ins

by jbooth 17y ago

Don't have a cite offhand but insurance industry employment has gone up by quite a lot (close to double if I recall correctly) since 2000. Let's say I'm an insurance CEO. You tell me, that by spending 20 million on increased claim scrutiny, we'll net 1 million in total savings by disbursing 21 million fewer dollars. What do I do there? It's obvious, I go for the 1 million. So I just spent 20 million in order to hand out 21 million fewer dollars. The policy holders are worse off, the country's worse off, and the insurance company only got a crappy 1 million out of it, compared to the 21 million they're no longer disbursing. All perfectly rational given the incentives -- which is why the system's broken.

anamax 17y ago
Insurance companies are, however, subject to "the law". Govt agencies mostly aren't. Feel free to compare Medicare's dispute process with that of an insurance company. And remember that some people can switch insurance companies while no one can switch Medicare. We can make switching insurance companies easier. Switching "single payers" is, by definition, impossible.
- jbooth 17y ago
  The government is indeed subject to the law, much more stringently than insurance companies in fact. Try doing something nominally illegal in a government agency. The government can pass laws, of course.. but the insurance industry can hire lobbyists. Seems like an awful uphill battle to beat those guys, based on the last 60 years of healthcare reform history. Harry and Louise can be pretty influential. Medicare's dispute process with that of an insurance company? Well, I'll tell you one thing, Medicare doesn't spend the 20 million to deny 21 million dollars in claims like I outlined above. We should make switching insurance companies easier, but that doesn't get us anywhere if they're all embracing the same bad practices. I don't have the option of starting an insurance company out of my garage like you could with a tech startup -- if the incumbents consist of a broken oligarchy, that's what we're stuck with, absent government action. There are so many classic incentive problems in play here, tragedy of the commons, free-rider problem.. it's frankly a wonder that things aren't broken even worse. With government run healthcare you get the benefit of proper incentives at the cost of government-run bureaucracy, which will always be a little less efficient. That's the tradeoff.. as far as which is more effective, we could look at every other industrialized country which gets better outcomes for a fraction of the cost, or we could appeal to ideology, fears of vague things like "socialism", and absurdities like "keep the government out of my medicare".
  - anamax 17y ago
    > The government is indeed subject to the law, much more stringently than insurance companies in fact. Try doing something nominally illegal in a government agency. You're talking about rules for employees. I'm talking about interaction with clients. When the DMV says "no", you're basically hosed. > Well, I'll tell you one thing, Medicare doesn't spend the 20 million to deny 21 million dollars in claims like I outlined above. Actually, it does. More to the point, the rules are such that it doesn't have to spend much money to deny and there's almost nothing that you can do about it. > We should make switching insurance companies easier, but that doesn't get us anywhere if they're all embracing the same bad practices. Competition results in better customer service in every other industry, why is health insurance different? > I don't have the option of starting an insurance company out of my garage like you could with a tech startup Actually, you do. All it takes is some money and a decent risk model, and you can bootstrap by providing services to companies that self-insure, which significantly reduces the money required. > That's the tradeoff.. as far as which is more effective, we could look at every other industrialized country which gets better outcomes for a fraction of the cost Not on comparable populations.

by jbooth 17y ago

anamax 17y ago

Insurance companies are, however, subject to "the law". Govt agencies mostly aren't. Feel free to compare Medicare's dispute process with that of an insurance company. And remember that some people can switch insurance companies while no one can switch Medicare. We can make switching insurance companies easier. Switching "single payers" is, by definition, impossible.

jbooth 17y ago
The government is indeed subject to the law, much more stringently than insurance companies in fact. Try doing something nominally illegal in a government agency. The government can pass laws, of course.. but the insurance industry can hire lobbyists. Seems like an awful uphill battle to beat those guys, based on the last 60 years of healthcare reform history. Harry and Louise can be pretty influential. Medicare's dispute process with that of an insurance company? Well, I'll tell you one thing, Medicare doesn't spend the 20 million to deny 21 million dollars in claims like I outlined above. We should make switching insurance companies easier, but that doesn't get us anywhere if they're all embracing the same bad practices. I don't have the option of starting an insurance company out of my garage like you could with a tech startup -- if the incumbents consist of a broken oligarchy, that's what we're stuck with, absent government action. There are so many classic incentive problems in play here, tragedy of the commons, free-rider problem.. it's frankly a wonder that things aren't broken even worse. With government run healthcare you get the benefit of proper incentives at the cost of government-run bureaucracy, which will always be a little less efficient. That's the tradeoff.. as far as which is more effective, we could look at every other industrialized country which gets better outcomes for a fraction of the cost, or we could appeal to ideology, fears of vague things like "socialism", and absurdities like "keep the government out of my medicare".
- anamax 17y ago
  > The government is indeed subject to the law, much more stringently than insurance companies in fact. Try doing something nominally illegal in a government agency. You're talking about rules for employees. I'm talking about interaction with clients. When the DMV says "no", you're basically hosed. > Well, I'll tell you one thing, Medicare doesn't spend the 20 million to deny 21 million dollars in claims like I outlined above. Actually, it does. More to the point, the rules are such that it doesn't have to spend much money to deny and there's almost nothing that you can do about it. > We should make switching insurance companies easier, but that doesn't get us anywhere if they're all embracing the same bad practices. Competition results in better customer service in every other industry, why is health insurance different? > I don't have the option of starting an insurance company out of my garage like you could with a tech startup Actually, you do. All it takes is some money and a decent risk model, and you can bootstrap by providing services to companies that self-insure, which significantly reduces the money required. > That's the tradeoff.. as far as which is more effective, we could look at every other industrialized country which gets better outcomes for a fraction of the cost Not on comparable populations.