5 ms·

What value do the insurance companies add for each dollar spent on healthcare?

ekianjo 9y ago
Not much. Negociation of prices with government and pharma companies, maybe.
nasredin 9y ago
You get to call your insurance company and test your anger management skills every time they deny you coverage. OK that's not really "value". They do add jobs though. There's "coders", they deal with medical codes.
- nradov 9y ago
  Claims will have to be coded regardless of who pays the bill.
pmorici 9y ago
They negotiate discounts with the providers.
- UnoriginalGuy 9y ago
  But aren't the prices artificially inflated to build in the supposed "discount?" To use an analogy, it is like how vehicle manufacturers adds 10% to reach the MSRP, which is "discounted" at the dealership for every vehicle sold. It is a shell game, there is no winning when the game is rigged for the game's own existence. If discounts were banned tomorrow on medical services, you'd see the costs drop significantly to reflect that.
  - pmorici 9y ago
    I think the main driver of the inflated base price is there is no cost transparency wethere you have insurance or not. Have you ever gone to a doctor and known the costs ahead of time or shopped around for the best price?
danjayh 9y ago
Their primary function is risk pooling. Secondarily they ration limited resources, attempting to distribute the available resources to effect the greatest good (this is why you often have such a hard time getting them to cover things, and why everyone loves to hate them). They've also traditionally been in the business of managing moral hazard in such a way that people feel it necessary to sign up for insurance while healthy, but the government has dramatically changed that function in the last few years. There's also the basic book-keeping and shuffling money around the system ... and while all of the things I listed are somewhere in between crusted puke and a fresh horse turd in terms of their appeal, they are necessary functions that any system (even a government run one) has to perform. One huge advantage that the government has in the moral hazard department is that they can use guns and jail time to prod people into paying ... but for whatever reason the single-payer folks typically ignore that particular evil when campaigning against the private insurance companies. Personally, I feel that the government's tactic of taking someone's freedom for refusal to participate is much worse than refusing coverage, which is what the private companies do.
- SubiculumCode 9y ago
  When the whole nation is the pool, then there is no need for the insurance company.
  - danjayh 9y ago
    The insurance company's methods of establishing the pool are far less coercive and destructive than the state's. Additionally, people can opt not to participate with an insurance company (or at least they used to be able to), so they have some motivation to be efficient and provide a basically decent level of service ... this is not true of the state. So establishing that large, mandatory pool has a downside.
    - SubiculumCode 9y ago
      Sometimes innovation is about figuring out ways to make more money, not by lowering costs to attract more consumers, but by limiting choices, creating illusion of choice, denying coverage, cheating consumers. Not all corporate innovation is good thing. Certain industries the possibility for real innovation is practically non-existent, and the 'innovation' that occurs is not in the public interest.

Not much. Negociation of prices with government and pharma companies, maybe.

You get to call your insurance company and test your anger management skills every time they deny you coverage. OK that's not really "value". They do add jobs though. There's "coders", they deal with medical codes.

nradov 9y ago
Claims will have to be coded regardless of who pays the bill.

pmorici 9y ago

They negotiate discounts with the providers.

UnoriginalGuy 9y ago
But aren't the prices artificially inflated to build in the supposed "discount?" To use an analogy, it is like how vehicle manufacturers adds 10% to reach the MSRP, which is "discounted" at the dealership for every vehicle sold. It is a shell game, there is no winning when the game is rigged for the game's own existence. If discounts were banned tomorrow on medical services, you'd see the costs drop significantly to reflect that.
- pmorici 9y ago
  I think the main driver of the inflated base price is there is no cost transparency wethere you have insurance or not. Have you ever gone to a doctor and known the costs ahead of time or shopped around for the best price?

danjayh 9y ago

Their primary function is risk pooling. Secondarily they ration limited resources, attempting to distribute the available resources to effect the greatest good (this is why you often have such a hard time getting them to cover things, and why everyone loves to hate them). They've also traditionally been in the business of managing moral hazard in such a way that people feel it necessary to sign up for insurance while healthy, but the government has dramatically changed that function in the last few years. There's also the basic book-keeping and shuffling money around the system ... and while all of the things I listed are somewhere in between crusted puke and a fresh horse turd in terms of their appeal, they are necessary functions that any system (even a government run one) has to perform. One huge advantage that the government has in the moral hazard department is that they can use guns and jail time to prod people into paying ... but for whatever reason the single-payer folks typically ignore that particular evil when campaigning against the private insurance companies. Personally, I feel that the government's tactic of taking someone's freedom for refusal to participate is much worse than refusing coverage, which is what the private companies do.

SubiculumCode 9y ago
When the whole nation is the pool, then there is no need for the insurance company.
- danjayh 9y ago
  The insurance company's methods of establishing the pool are far less coercive and destructive than the state's. Additionally, people can opt not to participate with an insurance company (or at least they used to be able to), so they have some motivation to be efficient and provide a basically decent level of service ... this is not true of the state. So establishing that large, mandatory pool has a downside.
  - SubiculumCode 9y ago
    Sometimes innovation is about figuring out ways to make more money, not by lowering costs to attract more consumers, but by limiting choices, creating illusion of choice, denying coverage, cheating consumers. Not all corporate innovation is good thing. Certain industries the possibility for real innovation is practically non-existent, and the 'innovation' that occurs is not in the public interest.