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I think of it this way: Say insurers know nothing about customers, just an anonymous number. In this world they would have to charge everyone the same, the ave
by netcan 8y ago
I think of it this way:
Say insurers know nothing about customers, just an anonymous number. In this world they would have to charge everyone the same, the average cost of insuring a person. Everyone pays the same premium, and has all their medical bills paid.
In a parallel world, insurers have perfect information. They know your medical future, not just the history. In this world, insurers will price your premium at exactly the cost of paying your medical costs. If you won't have to go to the doctor this year (this is a world where insurers know the future), you won't be charged anything. If you're going to be in a car accident, you will be charged for surgery and rehab.
In world no. 2 where insurers have maximum knowledge, insurance basically doesn't exist. Insurance is exactly the same as just paying your bills directly. In world 1, insurance works fine, but a 19 y/o pays a little more than they do today and sick or elderly people pay less than in the real world.
As data/information becomes more ubiquitous, we travel down this continuum.
- TeMPOraL 8y agoYup. I wish we could travel up this continuum, but then the real problem shows up: you need to figure out a way to stop health service providers (and their providers) from sucking your general insurance budget dry. Otherwise, you'll find that an increasing amount of people can't afford their payment.
- AlexandrB 8y agoThe solution to this problem is single payer. Where the insurer (government) now has negotiating power on prices because they’re the only game in town.
- deleted 8y ago[deleted]
- cabaalis 8y agoThat is one solution to one problem. It has the side effect of overly simplifying American systems of governing and labor, and would cause new side effects or amplify existing ones.
- twoodfin 8y agoThe US government is essentially the only game in town for military hardware and contracting, but I don't think anyone would hold up that procurement system as a model of efficiency.
- jjoonathan 8y agoIn the world of health care, many developed countries have single-payer healthcare and the US pays twice as much for everything as all of them. If goverment-run health care is inefficient, why is our "free-er" system half as efficient?
- twoodfin 8y agoMy point is that it's probably something other than monopsony effects.
- maxxxxx 8y agoI am all for single payer (Medicare for all for example) but there are plenty of ways the US system could improve. First would be to mandate pricing transparency so we actually have some data on the table for a rational discussion.
- VLM 8y agoIn the long run its the same funding model as police and public schools, so health care will mostly be funded by property tax (or crazy local alternatives for those without prop tax), and the same local people who balance the tradeoffs of protecting from criminals vs protecting from fire will now be balancing education vs health care. Virtually all health care is local and monopoly and time sensitive, just like policing or kindergarten. I live six blocks from supposedly the best neonatal intensive care unit in the region; Only people who live nearby can benefit and I should pay more for it. Much like I pay a lot of prop tax for the local police to keep crime rates to low range of the suburban experience. Much like education I'm sure the feds and state will kick in some bucks but most of the money will come from property tax (much as most of the benefits to me come from living nearby)
- rocqua 8y agoI believe that funding based on local property tax is a uniquely American proposition. In other countries, it is considered distasteful that people in poor neighborhoods get less funding for their schools and police force. And especially for schools, the country at large reaps the benefit from people going to a good school, much moreso than it is a benefit to parents that their children go to a good school.
- VLM 8y agoYes foreigners think majority funding means 100% funded, but my local K12 gets $80M from prop tax, $50M from the state acting as middleman (its a proxy for income tax funding the schools), and $3M from the feds. With the rise of identity politics in the USA, there's little motivation to help the kids of people who hate you and your kids, its a natural outcome of a multicultural nation.
- gowld 8y agoDog-whistle racism has no place on HN. Poor communities of all races have been underserved since long before whenever you imagine "identity politics" started to "rise" in the USA. Was "identity politics" not enshrined in the US Constitution, which protected racial slavery while giving more-slaveowning states extra voting power over less-slaveowning states https://blackpast.org/aah/three-fifths-clause-united-states-constitution-1787 https://blackpast.org/aah/three-fifths-clause-united-states-... https://en.wikipedia.org/wiki/Brown_v._Board_of_Education https://en.wikipedia.org/wiki/Brown_v._Board_of_Education
- leetcrew 8y agoin world 1, 19 year olds pay a lot more than they do now, unless we are meant to assume that world 1 significantly increases the efficiency of the whole healthcare system. one of the stipulations of obamacare is that premiums for the elderly can be no more than three times the premiums paid by healthy young people. this implies that the natural ratio is greater than 3:1.
- netcan 8y agoPoint taken.
- zimbatm 8y agoAssuming the future is known, there is no risk and therefor need to take an insurance. It's better to keep the money and remove the insurance admin overhead. Call me cynical but in practice I think that kind of asymmetric information is only going to serve the insurer to rake in bigger benefits.
- dboreham 8y agoExcept under the US system you have no idea what the actual doctors and hospitals of the future will charge you for any given procedure or service.
- VLM 8y agoCynically its as much as they think they can get. The pricing game is between the insurance companies and the providers; the end recipients of services have no involvement in the decision making process. Its kind of like cattle, veterinarians, and ranchers. The cattle don't have much of a say in the finances or what treatments they get. The ranchers want them to feel good to make them easier to control, but ...
- netcan 8y agoYes true. I was just trying to demonstrate a point, and it's easier with absolutes. The real world scenario is that a combination of better startistics/ML, and access to a lot more data moves us increasingly closer to that world where medical insurance doesn't make any sense. Insurance works for unknown/unknowable situations. Spontaneous combustion insurance is cheap because it could happen to anyone.
- Someone 8y ago”and therefore no need to take an insurance” I disagree. The “the lucky should share in the costs of the unlucky” aspect of insurance still is there; the difference is that, in a perfect information world with self-serving individuals, the need still is there for the unlucky, but the lucky won’t be willing to take part.
- 8y ago
- ataturk 8y agoI'd say we could have world #1, but the C level execs would have to make salaries that are for more in line with the kind of pay that the rank & file make. And the companies would no longer be publicly-traded. I'm not for government takeover of health insurance, but am very much in favor of bringing the rent seekers back down to earth to struggle in the muck with the rest of us.