6 ms·

Insurance companies are just a leech on the economy who collect rent. This would turn healthcare into an even more negative sum game.

by dpc59 10y ago

dragonwriter 10y ago
> This would turn healthcare into an even more negative sum game. How, specifically, would it do so compared to the actual system that exists now in the US?
- deleted 10y ago
  [deleted]
- mjevans 10y ago
  The system that exists now in the US is broken and already exactly what is described. Those with money pay too much for insurance because those without insurance are only covered at the last stages, when it becomes inhumane (by anyone's definition) to deny them care (which is also the most drastic and expensive level of care for a problem) which is then 'written off' and padded in to the 'prices' asked for other services. A LOT of medical costs are actually sunk fixed op-ex. Big expensive machines that cost deferentially little to use or not (but always coast a lot to have the option of using), drugs and other supplies that have shelf lifes, etc. Labwork presently requires a lot of humans, but much of it could also be converted to automation and human review, lowering the per unit cost; if there were incentive to make such technology. It's also a major bit of administrative overhead to have to haggle with different insurance companies, hound patients for billing, and in general worry IF someone will pay and how much.
  - trbvm2 10y ago
    Sorry to basically just negate your post but I do believe that you missed answering the last question in explaining details. The poster asked, how would the provision of basic income further turn healthcare supply in the US to a negative sum game as compared to private insurance supplemented with corporate and government benefits? Your response does a fair job of detailing some of the current issues with the US healthcare system but does not mention how basic income would make these issues worse. Would you kindly link the two for those of us who are not making the connection?
    - mjevans 10y ago
      You're correct, I was explaining why it was /already/ a negative sum game. I suppose the closest parallel is what I recall hearing happened to auto-insurance rates when those became mandatory. Another close parallel would be what would happen if everyone in the San Francisco Bay Area were to suddenly receive an additional 500 USD/month housing allowance for living in the area. I would expect occupancy prices to go up by ~500 USD and the general quality of housing anyone current has to remain the same otherwise.
      - eru 10y ago
        Yes, pretty much. (And incidentally, that's a great argument for replacing almost all taxes with taxes on land rent: any extra money people have left over after paying taxes etc goes to bid up housing costs. Lower taxes and you get higher housing costs. A land tax can recover the lost revenue---and it's really hard to hide land and evade the tax.)
CuriouslyC 10y ago
The idea of insurance is great. Unfortunately, I agree with you about the actual, existing insurance companies.
- gmac 10y ago
  I would suggest the idea of private insurance is actually completely non-functional without such heavy regulation that you might as well just institute public provision — which also has the benefit that it does not heavily incentivize over-provision. With a competitive insurance market, you charge people a premium related to their expected healthcare costs. Some people have chronic diseases, and their expected healthcare costs are way beyond what they can likely afford. However you regulate, insurance companies will always try to find a way to cream off the lowest risk customers to offer them the cheapest deal, progressively chipping away at the idea of collective insurance until it breaks. Private health insurance is broken not only in practice but also in theory.
  - bduerst 10y ago
    For sure - it's kind of absurd because healthcare costs are an inevitability. With car and home insurance, the products can go their entire lifecycle without burning down, being robbed, or smashing into a tree. With healthcare, a person is going to need it, and it incapacitates them when they don't get it. Personally I'm for treating healthcare as we treat most regional monopolies that everyone needs - make it a public utility. You'll need healthcare just like you'll need water and electricity.
    - eru 10y ago
      > With healthcare, a person is going to need it [...] Not really, at least not at the current stage of technology. During most of your life, healthcare is more like a lottery, ie you might never need it. When you are old, something will eventually get you. And a lot of health care costs are spend on these end-of-life conditions. Alas, our massive spending at the end doesn't actually help very much: they mostly give you a few more month of suffering. (For things like cancer etc.) For a lot of people hospice care is both cheaper and provides a better quality of life. (Some in-law of mine went from hospital care to hospice care when the cancer treatments got worse than the disease.) See eg http://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medicine-half http://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medi... for a similar argument.
gwright 10y ago
And yet the margins for insurance companies is generally not at the high end when compared with other industries. For example, using the data from: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/... and looking at the After-tax Lease & R&D adjusted margin, The software industry is at 24% (8th place) and the Insurance industry is at 11.51% (37th place).
- cdash 10y ago
  You can drive the cost of healthcare up without having large margins Just like Hollywood never makes a profit, you can't use profit margin to measure what the cost savings would be in moving to national healthcare system.

Insurance companies are just a leech on the economy who collect rent. This would turn healthcare into an even more negative sum game.

by dpc59 10y ago

Insurance companies are just a leech on the economy who collect rent. This would turn healthcare into an even more negative sum game.

dragonwriter 10y ago

> This would turn healthcare into an even more negative sum game. How, specifically, would it do so compared to the actual system that exists now in the US?

deleted 10y ago
[deleted]
mjevans 10y ago
The system that exists now in the US is broken and already exactly what is described. Those with money pay too much for insurance because those without insurance are only covered at the last stages, when it becomes inhumane (by anyone's definition) to deny them care (which is also the most drastic and expensive level of care for a problem) which is then 'written off' and padded in to the 'prices' asked for other services. A LOT of medical costs are actually sunk fixed op-ex. Big expensive machines that cost deferentially little to use or not (but always coast a lot to have the option of using), drugs and other supplies that have shelf lifes, etc. Labwork presently requires a lot of humans, but much of it could also be converted to automation and human review, lowering the per unit cost; if there were incentive to make such technology. It's also a major bit of administrative overhead to have to haggle with different insurance companies, hound patients for billing, and in general worry IF someone will pay and how much.
- trbvm2 10y ago
  Sorry to basically just negate your post but I do believe that you missed answering the last question in explaining details. The poster asked, how would the provision of basic income further turn healthcare supply in the US to a negative sum game as compared to private insurance supplemented with corporate and government benefits? Your response does a fair job of detailing some of the current issues with the US healthcare system but does not mention how basic income would make these issues worse. Would you kindly link the two for those of us who are not making the connection?
  - mjevans 10y ago
    You're correct, I was explaining why it was /already/ a negative sum game. I suppose the closest parallel is what I recall hearing happened to auto-insurance rates when those became mandatory. Another close parallel would be what would happen if everyone in the San Francisco Bay Area were to suddenly receive an additional 500 USD/month housing allowance for living in the area. I would expect occupancy prices to go up by ~500 USD and the general quality of housing anyone current has to remain the same otherwise.
    - eru 10y ago
      Yes, pretty much. (And incidentally, that's a great argument for replacing almost all taxes with taxes on land rent: any extra money people have left over after paying taxes etc goes to bid up housing costs. Lower taxes and you get higher housing costs. A land tax can recover the lost revenue---and it's really hard to hide land and evade the tax.)

CuriouslyC 10y ago

The idea of insurance is great. Unfortunately, I agree with you about the actual, existing insurance companies.

gmac 10y ago
I would suggest the idea of private insurance is actually completely non-functional without such heavy regulation that you might as well just institute public provision — which also has the benefit that it does not heavily incentivize over-provision. With a competitive insurance market, you charge people a premium related to their expected healthcare costs. Some people have chronic diseases, and their expected healthcare costs are way beyond what they can likely afford. However you regulate, insurance companies will always try to find a way to cream off the lowest risk customers to offer them the cheapest deal, progressively chipping away at the idea of collective insurance until it breaks. Private health insurance is broken not only in practice but also in theory.
- bduerst 10y ago
  For sure - it's kind of absurd because healthcare costs are an inevitability. With car and home insurance, the products can go their entire lifecycle without burning down, being robbed, or smashing into a tree. With healthcare, a person is going to need it, and it incapacitates them when they don't get it. Personally I'm for treating healthcare as we treat most regional monopolies that everyone needs - make it a public utility. You'll need healthcare just like you'll need water and electricity.
  - eru 10y ago
    > With healthcare, a person is going to need it [...] Not really, at least not at the current stage of technology. During most of your life, healthcare is more like a lottery, ie you might never need it. When you are old, something will eventually get you. And a lot of health care costs are spend on these end-of-life conditions. Alas, our massive spending at the end doesn't actually help very much: they mostly give you a few more month of suffering. (For things like cancer etc.) For a lot of people hospice care is both cheaper and provides a better quality of life. (Some in-law of mine went from hospital care to hospice care when the cancer treatments got worse than the disease.) See eg http://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medicine-half http://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medi... for a similar argument.

gwright 10y ago

And yet the margins for insurance companies is generally not at the high end when compared with other industries. For example, using the data from: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/... and looking at the After-tax Lease & R&D adjusted margin, The software industry is at 24% (8th place) and the Insurance industry is at 11.51% (37th place).

cdash 10y ago
You can drive the cost of healthcare up without having large margins Just like Hollywood never makes a profit, you can't use profit margin to measure what the cost savings would be in moving to national healthcare system.