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You cap healthcare prices for insurers because they are heavily influencing the provider prices. Both institutions work in tandem[0] with one another to establ
by module0000 8y ago
You cap healthcare prices for insurers because they are heavily influencing the provider prices.
Both institutions work in tandem[0] with one another to establish pricing guidelines. That's why your hospital-purchased ibuprofen is $10 per pill instead of $6 per bottle. The insurer and hospital "work out" a price that let's them achieve the profit needed to pay their administrative costs, plus margin.
In the USA(this is all from a US citizen's perspective), there are regulations that limit what percentage(15% in my state) of an insurer's income can be profit vs administrative cost. This means that a higher hospital price results in a higher profit for the insurance provider. This provides both parties an opportunity to set prices for an optimal profit. With government-mandated health insurance participation, the pool of people paying into this system has increased.
It is what is. Tell your elected official if you think it would help.
0: Anthem, Blue Cross, and UHC executives sit on the Baptist Health(hospital chain) board of directors, and vice versa.
- castlecrasher2 8y ago>You cap healthcare prices for insurers because they are heavily influencing the provider prices. Insurers already have an incentive to limit prices, though, which is essentially what their contracts with providers are. As in, they list how much they'll shell out for CPT codes.
- Dylan16807 8y agoThey have an incentive to get discounts, which is not the same as limiting prices.
- refurb 8y agoHealth insurers and providers negotiate payments for healthcare. They sit on the opposite side of the table - insurers want the lowest price and providers want the highest price. The only benefit an insurer would have from a higher price is if they have a monopoly position - no other insurer. Otherwise the other insurers will pay less, charge a lower premium and grab all the customers.
- ddingus 8y agoThat is what networks are for. When choice is harder, they can play the price game better.
- JarlUlvi 8y agoIt is actually the other way around - Govt regulated costs (medicare and medicaid) highly influence insurer compensation to private practices and hospitals. Medical Providers (doctors/hospitals) negotiate based on multiple of Medicare as payment.