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I believe this article is about a provision in the ACA to limit administrative costs to 20%, which is highly unimpressive when you look at the way non profit in

I believe this article is about a provision in the ACA to limit administrative costs to 20%, which is highly unimpressive when you look at the way non profit insurance works in every other developed country.

garmaine 8y ago
That just means you have to increase costs to increase profits. It's NOT a solution, as a century of ballooning cost-plus government contracts have shown.
- dontreact 8y ago
  I’m not saying that the solution is to close this gap. It’s just another sign of the failure of our system. Seems like there is plenty of evidence around the world that insurance companies can be non profit and work quite well. In fact in the US this was the case until the 80s.
  - garmaine 8y ago
    I'm just pointing out that the specific structure you specified has truly perverse incentives that have historically raised costs in every industry in which they've been applied (which includes not just healthcare and other insurance markets, but also defense spending since WW2).
paulddraper 8y ago
Perhaps. Where are you getting the 5% administrative costs? All numbers I've seen have been far higher than that. * Canada 12% * Britain 16% * Netherlands 20% https://www.commonwealthfund.org/sites/default/files/___media_images_publications_in_the_literature_2014_sep_himmelstein_comparison_hosp_admin_costs_ha_09_2014_itl_exhibit.png https://www.commonwealthfund.org/sites/default/files/___medi...
- Steko 8y ago
  Your link is provider admin costs. IIRC insurer admin costs are 3% for UK and 5% for Canada.
  - paulddraper 8y ago
    You're correct; good clarification on which admin costs we're talking about.
    - dontreact 8y ago
      Right, I was only talking about insurance administrative costs.
- throw-far-away 8y ago
  Bigger hospitals can afford to have a modest administrative cost because there are fixed (as opposed to variable costs that scale with patients served and departments funded) that scale and amortize in huge organizations. Small hospitals (let's say somewhere in Iceland) either have to do without fancy tech/better staff that usually command more $$$, or have to spend more, increasing their overhead. In reality and to be fair, it's better to compare their patient outcomes and financials in-depth rather than looking at the overhead percentages only.
deleted 8y ago
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garmaine 8y ago

That just means you have to increase costs to increase profits. It's NOT a solution, as a century of ballooning cost-plus government contracts have shown.

dontreact 8y ago
I’m not saying that the solution is to close this gap. It’s just another sign of the failure of our system. Seems like there is plenty of evidence around the world that insurance companies can be non profit and work quite well. In fact in the US this was the case until the 80s.
- garmaine 8y ago
  I'm just pointing out that the specific structure you specified has truly perverse incentives that have historically raised costs in every industry in which they've been applied (which includes not just healthcare and other insurance markets, but also defense spending since WW2).

paulddraper 8y ago

Perhaps. Where are you getting the 5% administrative costs? All numbers I've seen have been far higher than that. * Canada 12% * Britain 16% * Netherlands 20% https://www.commonwealthfund.org/sites/default/files/___media_images_publications_in_the_literature_2014_sep_himmelstein_comparison_hosp_admin_costs_ha_09_2014_itl_exhibit.png https://www.commonwealthfund.org/sites/default/files/___medi...

Steko 8y ago
Your link is provider admin costs. IIRC insurer admin costs are 3% for UK and 5% for Canada.
- paulddraper 8y ago
  You're correct; good clarification on which admin costs we're talking about.
  - dontreact 8y ago
    Right, I was only talking about insurance administrative costs.
throw-far-away 8y ago
Bigger hospitals can afford to have a modest administrative cost because there are fixed (as opposed to variable costs that scale with patients served and departments funded) that scale and amortize in huge organizations. Small hospitals (let's say somewhere in Iceland) either have to do without fancy tech/better staff that usually command more $$$, or have to spend more, increasing their overhead. In reality and to be fair, it's better to compare their patient outcomes and financials in-depth rather than looking at the overhead percentages only.

deleted 8y ago

[deleted]