8 ms·

This is the core problem of health insurance as currently structured in the US -- everyone will make a claim eventually so it's effectively a whole life insuran

by lftl 8y ago

This is the core problem of health insurance as currently structured in the US -- everyone will make a claim eventually so it's effectively a whole life insurance policy except the payout is sporadic and involves tons of bureaucratic crap. I personally would be fine with either universal healthcare or regulating the marketing to outlaw non-catastrophic health "insurance" thereby forcing routine care to be a direct payment relationship with your doctor.

freehunter 8y ago
That's a good point and one I've never linked in my mind. My insurance company takes monthly payments from me in exchange for a certain amount of coverage, then they either mandate or strongly recommend that I go to the doctor regularly, which they will cover for a nominal cost to me... basically I'm paying for "insurance" for something that the insurance company has me do on a regular and recurring schedule (visit my doctor). Whatever your politics on healthcare, it does seem insane that something as routine as visiting the doctor for a yearly physical could be so expensive that you need insurance to pay for it. Like you said, insurance should be to cover unpredictable catastrophic events. My homeowners insurance doesn't pay for roof maintenance until the old one fails. My car insurance doesn't pay for car maintenance until I've had a collision. Why is my health insurance covering routine maintenance?
- roel_v 8y ago
  "Why is my health insurance covering routine maintenance?" Because the preventative care reduces the costs down the line, and there is no way for an insurer to check if people are actually doing their routine maintenance if they don't do it. So it's better to include it in the premium. It's different from your roof in that your HO insurance only covers freak accidents (not failure because of old age), whereas health insurance covers many old age related problems.
  - chimeracoder 8y ago
    > Because the preventative care reduces the costs down the line This is a common myth. Preventive care actually doesn't reduce costs, on net. It improves the overall quality of care, yes, but it doesn't (in aggregate) save more money than it requires. For some conditions, early intervention is cheaper (and more effective) than delayed intervention, but that's not always the case - and either way, it's not considered preventive care.
  - freehunter 8y ago
    But going back to the car insurance example, making sure my brakes are working, making sure my headlights and turn signals and brake lights are working, making sure my tires are road-worthy, all of this highly decreases the chance that I will be in an accident that needs a payout from the insurance company. In many states in the US, there actually are checks done for these things to make sure the car has had its routine maintenance performed... but they're not done by the insurance company. They're done by the government.
    - chimeracoder 8y ago
      > In many states in the US, there actually are checks done for these things to make sure the car has had its routine maintenance performed... but they're not done by the insurance company. They're done by the government. There are a whole lot of things that you can do to reduce your premiums for car insurance, homeowners' insurance, renters' insurance, and so forth. Those are determined by the insurance company, not by the government.
    - dhimes 8y ago
      Don't forget regular maintenance to keep your warranty valid on a new purchase.
  - dragonwriter 8y ago
    > Because the preventative care reduces the costs down the line I thought the evidence was that preventive care increases total lifetime care costs, but improves outcomes [0]. (Whereas, e.g., smoking reduces lifetime, though not per-year, healthcare costs, but made outcomes worse.) [0] Which may still save your insurer money if it kicks costs down the road until your costs are covered, or at least subsidized, by Medicare. (Or change plans because of a different job, or otherwise are someone else's problem.) And even if it doesn't save the insurer payouts, it can make the insurer more money by keeping you alive, employed, and paying premiums longer—obviously, premiums are set so that on average the insurer makes money every year you are paying them, so if you are covered longer even if they are paying more bills on total, they are still making more money.
- dragonwriter 8y ago
  > My car insurance doesn't pay for car maintenance until I've had a collision. You can buy prepaid maintenance plans for cars, they are just usually bundled with auto purchase rather than bundled with liability insurance the way some other coverage is; that's just a packaging detail, and there isn't a purchase-of-your-body to bundle maintenance plans s with.
ryandrake 8y ago
The major problem with that is there is no price transparency. If I go see a doctor, I have no idea if I will end up with a $40, $400, $4000, or $40,000 bill until the bill comes months later and I have to pay it. I’m relying on insurance because going to the doctor is such a financially risky gamble.
- micaksica 8y ago
  > If I go see a doctor, I have no idea if I will end up with a $40, $400, $4000, or $40,000 bill until the bill comes months later and I have to pay it. NO IDEA. This is what's really strange about the American healthcare system. For everything else in America you can either get a price up front or an estimate of total costs up front. Why should going to the doctor be any different than going to a mechanic? Pay advertised flat rates for issue diagnosis, and get estimates for the problem. Yes, in cases of emergency you can't really shop around too much, but the majority of the time you're going to a doctor, you could at least call and get estimates of how much things will cost. It's not even possible to do this with most healthcare organizations. If you call your doctor's reception and ask "how much will it cost for this visit?" they'll tell you they don't do billing and they won't know until it's processed by insurance. Price transparency in the healthcare market - or at least some decent estimate of it - would be a great thing to see. American healthcare is ridiculously inefficient because it appears wholly designed to be byzantine.
  - knuththetruth 8y ago
    Or we could just have universal healthcare with government-set price controls, just like Japan does. The ultimate in price transparency. Everyone is healthier, lives longer, and it’s far cheaper.
    - lftl 8y ago
      I'd be fine with that, but I'm acutely aware living in the deep south that MANY people would not be happy with that. If we're talking about what's politically feasible within the US, "universal" healthcare is only really an option at the state level, or maybe with some federal maneuvering, as a multi-state regional coordination. It's simply not going to be accepted anywhere in the near-future on a national level. For the parts of the country that are rabidly anti-universal healthcare, a more free market solution would be a nice consolation prize.
phil21 8y ago
Yes, the principle agent problem is truly the only problem that matters in US healthcare. Fix that and most of the rest of the system comes along with it.

by lftl 8y ago

freehunter 8y ago

That's a good point and one I've never linked in my mind. My insurance company takes monthly payments from me in exchange for a certain amount of coverage, then they either mandate or strongly recommend that I go to the doctor regularly, which they will cover for a nominal cost to me... basically I'm paying for "insurance" for something that the insurance company has me do on a regular and recurring schedule (visit my doctor). Whatever your politics on healthcare, it does seem insane that something as routine as visiting the doctor for a yearly physical could be so expensive that you need insurance to pay for it. Like you said, insurance should be to cover unpredictable catastrophic events. My homeowners insurance doesn't pay for roof maintenance until the old one fails. My car insurance doesn't pay for car maintenance until I've had a collision. Why is my health insurance covering routine maintenance?

roel_v 8y ago
"Why is my health insurance covering routine maintenance?" Because the preventative care reduces the costs down the line, and there is no way for an insurer to check if people are actually doing their routine maintenance if they don't do it. So it's better to include it in the premium. It's different from your roof in that your HO insurance only covers freak accidents (not failure because of old age), whereas health insurance covers many old age related problems.
- chimeracoder 8y ago
  > Because the preventative care reduces the costs down the line This is a common myth. Preventive care actually doesn't reduce costs, on net. It improves the overall quality of care, yes, but it doesn't (in aggregate) save more money than it requires. For some conditions, early intervention is cheaper (and more effective) than delayed intervention, but that's not always the case - and either way, it's not considered preventive care.
- freehunter 8y ago
  But going back to the car insurance example, making sure my brakes are working, making sure my headlights and turn signals and brake lights are working, making sure my tires are road-worthy, all of this highly decreases the chance that I will be in an accident that needs a payout from the insurance company. In many states in the US, there actually are checks done for these things to make sure the car has had its routine maintenance performed... but they're not done by the insurance company. They're done by the government.
  - chimeracoder 8y ago
    > In many states in the US, there actually are checks done for these things to make sure the car has had its routine maintenance performed... but they're not done by the insurance company. They're done by the government. There are a whole lot of things that you can do to reduce your premiums for car insurance, homeowners' insurance, renters' insurance, and so forth. Those are determined by the insurance company, not by the government.
  - dhimes 8y ago
    Don't forget regular maintenance to keep your warranty valid on a new purchase.
- dragonwriter 8y ago
  > Because the preventative care reduces the costs down the line I thought the evidence was that preventive care increases total lifetime care costs, but improves outcomes [0]. (Whereas, e.g., smoking reduces lifetime, though not per-year, healthcare costs, but made outcomes worse.) [0] Which may still save your insurer money if it kicks costs down the road until your costs are covered, or at least subsidized, by Medicare. (Or change plans because of a different job, or otherwise are someone else's problem.) And even if it doesn't save the insurer payouts, it can make the insurer more money by keeping you alive, employed, and paying premiums longer—obviously, premiums are set so that on average the insurer makes money every year you are paying them, so if you are covered longer even if they are paying more bills on total, they are still making more money.
dragonwriter 8y ago
> My car insurance doesn't pay for car maintenance until I've had a collision. You can buy prepaid maintenance plans for cars, they are just usually bundled with auto purchase rather than bundled with liability insurance the way some other coverage is; that's just a packaging detail, and there isn't a purchase-of-your-body to bundle maintenance plans s with.

ryandrake 8y ago

The major problem with that is there is no price transparency. If I go see a doctor, I have no idea if I will end up with a $40, $400, $4000, or $40,000 bill until the bill comes months later and I have to pay it. I’m relying on insurance because going to the doctor is such a financially risky gamble.

micaksica 8y ago
> If I go see a doctor, I have no idea if I will end up with a $40, $400, $4000, or $40,000 bill until the bill comes months later and I have to pay it. NO IDEA. This is what's really strange about the American healthcare system. For everything else in America you can either get a price up front or an estimate of total costs up front. Why should going to the doctor be any different than going to a mechanic? Pay advertised flat rates for issue diagnosis, and get estimates for the problem. Yes, in cases of emergency you can't really shop around too much, but the majority of the time you're going to a doctor, you could at least call and get estimates of how much things will cost. It's not even possible to do this with most healthcare organizations. If you call your doctor's reception and ask "how much will it cost for this visit?" they'll tell you they don't do billing and they won't know until it's processed by insurance. Price transparency in the healthcare market - or at least some decent estimate of it - would be a great thing to see. American healthcare is ridiculously inefficient because it appears wholly designed to be byzantine.
- knuththetruth 8y ago
  Or we could just have universal healthcare with government-set price controls, just like Japan does. The ultimate in price transparency. Everyone is healthier, lives longer, and it’s far cheaper.
  - lftl 8y ago
    I'd be fine with that, but I'm acutely aware living in the deep south that MANY people would not be happy with that. If we're talking about what's politically feasible within the US, "universal" healthcare is only really an option at the state level, or maybe with some federal maneuvering, as a multi-state regional coordination. It's simply not going to be accepted anywhere in the near-future on a national level. For the parts of the country that are rabidly anti-universal healthcare, a more free market solution would be a nice consolation prize.

phil21 8y ago

Yes, the principle agent problem is truly the only problem that matters in US healthcare. Fix that and most of the rest of the system comes along with it.