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The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—Uni

The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—United Healthcare covers more lives than the NHS. I worked at a startup that dealt with international reimbursement and we accepted less in France because it was just how it was done. We got paid much more in Germany and the UK. In the US we got paid a lot from some people and sold a very similar product to Walmart for 1/5th the cost. This was a small startup, not a global pharma company, though we worked with a few and saw similar patterns at play. History, as much as politics and economics, shapes the industry in profound ways.

e40 10y ago
The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—United Healthcare covers more lives than the NHS. You would think, but they don't. That's the problem. Why? I don't know. Car insurance is a similar thing. My SO barely tapped the car in front of her at a stop light. No damage, even though the woman flew out of the car claiming her car was damaged (we have pics of no damage) and that her children were injured (two boys in the back seat without seat belts or car seats). My SO asked the boys if they were OK and they laughed and said "yes." So, a month or so later I get a call from the insurance company they've settled for medical bills of > $10k and damage to the car for ~$4k. I was livid and told them I wanted them to fight this fraud. Nope, they wouldn't do it. I begged the agent for 20 minutes. It's cheaper to settle. It would clearly be in the best interest of the insurance company to crack down on fraud, but they feel it's "cheaper" to settle and move on. I think the same mindset exists in the medical insurance industry.
- supergeek133 10y ago
  Same thing happened to me with auto insurance. State trooper shows up, asks everyone if they are OK, doesn't take a report because no damage. A year later my insurance settles with the guy for $4k, and my insurance premium almost doubles. Medical insurance is the same because the insurer, the drug company, and the doctor ALL benefit from increased prices.
bigchewy 10y ago
>>The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—United Healthcare covers more lives than the NHS. No, they don't. With ACA, insurance companies must spend 85% of their revenue on medical. This means that their profit margin is effectively capped and the only way for the industry to increase profits is to increase the amount they pay out to providers, pharma, etc. so, no, the insurance company does not have every incentive to negotiate. In fact, sadly, most of the time it's the opposite.
- replicatorblog 10y ago
  Interesting hypothesis, but if it's accurate, have we seen a change is pricing pre/post ACA implementation? Theoretically, insurers would have been more active negotiators prior to the ACA. If so, wouldn't that suggest that rising drug prices are more a problem of heavy-handed regulation than private profit motive?
  - uberduber 10y ago
    25-50% of my 60-100 claims used to be denied every single year, I'd fight all of them and win. I had no claim denials in 2014 and a handful in 2015 with the same insurer. Pre-authorizations which used to be denied or delayed all now magically go through in 1-2 days. For example, I needed a specialized MRI, doctor orders it at the hospital, approved in one day. Before I do it, I find out that the allowed amount is $30k, insurance will pay $27k and I will be responsible for $3k. Before insurance would've fought me tooth and nail on this. I eventually find a place that that tells me they'll bill $1.2k to insurance but can't tell me what insurance will allow. It takes them three times and two weeks to get the insurance approved. My final copay ends up being $55. While healthcare has always outpaced consumer inflation, I have noticed a massive increase in the rate for hospitals and pharma, while my doctors are all actually being paid less than 5 years ago. In 2010 my doctor would get $100-120, now he gets $55-75 for the same visit. Meanwhile a simple blood test that would be $2 at my doctor or would have been $15 at hospital is now $50 at the hospital after the ACA. I think there's a lot more kickbacks and bribery going on.

The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—United Healthcare covers more lives than the NHS. I worked at a startup that dealt with international reimbursement and we accepted less in France because it was just how it was done. We got paid much more in Germany and the UK. In the US we got paid a lot from some people and sold a very similar product to Walmart for 1/5th the cost. This was a small startup, not a global pharma company, though we worked with a few and saw similar patterns at play. History, as much as politics and economics, shapes the industry in profound ways.

e40 10y ago

The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—United Healthcare covers more lives than the NHS. You would think, but they don't. That's the problem. Why? I don't know. Car insurance is a similar thing. My SO barely tapped the car in front of her at a stop light. No damage, even though the woman flew out of the car claiming her car was damaged (we have pics of no damage) and that her children were injured (two boys in the back seat without seat belts or car seats). My SO asked the boys if they were OK and they laughed and said "yes." So, a month or so later I get a call from the insurance company they've settled for medical bills of > $10k and damage to the car for ~$4k. I was livid and told them I wanted them to fight this fraud. Nope, they wouldn't do it. I begged the agent for 20 minutes. It's cheaper to settle. It would clearly be in the best interest of the insurance company to crack down on fraud, but they feel it's "cheaper" to settle and move on. I think the same mindset exists in the medical insurance industry.

supergeek133 10y ago
Same thing happened to me with auto insurance. State trooper shows up, asks everyone if they are OK, doesn't take a report because no damage. A year later my insurance settles with the guy for $4k, and my insurance premium almost doubles. Medical insurance is the same because the insurer, the drug company, and the doctor ALL benefit from increased prices.

bigchewy 10y ago

>>The problem with the "can't negotiate" argument is that insurers have every incentive to negotiate on behalf of the patients they cover. And they have scale—United Healthcare covers more lives than the NHS. No, they don't. With ACA, insurance companies must spend 85% of their revenue on medical. This means that their profit margin is effectively capped and the only way for the industry to increase profits is to increase the amount they pay out to providers, pharma, etc. so, no, the insurance company does not have every incentive to negotiate. In fact, sadly, most of the time it's the opposite.

replicatorblog 10y ago
Interesting hypothesis, but if it's accurate, have we seen a change is pricing pre/post ACA implementation? Theoretically, insurers would have been more active negotiators prior to the ACA. If so, wouldn't that suggest that rising drug prices are more a problem of heavy-handed regulation than private profit motive?
- uberduber 10y ago
  25-50% of my 60-100 claims used to be denied every single year, I'd fight all of them and win. I had no claim denials in 2014 and a handful in 2015 with the same insurer. Pre-authorizations which used to be denied or delayed all now magically go through in 1-2 days. For example, I needed a specialized MRI, doctor orders it at the hospital, approved in one day. Before I do it, I find out that the allowed amount is $30k, insurance will pay $27k and I will be responsible for $3k. Before insurance would've fought me tooth and nail on this. I eventually find a place that that tells me they'll bill $1.2k to insurance but can't tell me what insurance will allow. It takes them three times and two weeks to get the insurance approved. My final copay ends up being $55. While healthcare has always outpaced consumer inflation, I have noticed a massive increase in the rate for hospitals and pharma, while my doctors are all actually being paid less than 5 years ago. In 2010 my doctor would get $100-120, now he gets $55-75 for the same visit. Meanwhile a simple blood test that would be $2 at my doctor or would have been $15 at hospital is now $50 at the hospital after the ACA. I think there's a lot more kickbacks and bribery going on.