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But due to insurance churn, you don’t want to be footing the bill for your competitor down the road. As an insurance manager, your unit of analysis is not healt

• aaronbrethorst 8y ago
  Sounds like a great argument for Medicare for All, the NHS, or other nationalized systems.
  • waterhouse 8y ago
    Or for insurance companies to form an association that comes up with policies that would benefit all of them if they all did them, and then requires all member companies to implement them. Not sure exactly what carrot or stick they could use to ensure that any remaining insurance companies have an incentive to join the association rather than trying to free-ride off what they're doing, but one might be able to come up with something.
    • aaronbrethorst 8y ago
      This Wikipedia page might offer some ideas: https://en.wikipedia.org/wiki/Cartel https://en.wikipedia.org/wiki/Cartel
      • ian0 8y ago
        Or this one: https://en.wikipedia.org/wiki/Central_bank https://en.wikipedia.org/wiki/Central_bank
      • waterhouse 8y ago
        The page does not list enforcement mechanisms for cartels, and in fact says: "In general, cartel agreements are economically unstable in that there is an incentive for members to cheat by selling at below the agreed price or selling more than the production quotas set by the cartel (see also game theory). This has caused many cartels that attempt to set product prices to be unsuccessful in the long term. Empirical studies of 20th century cartels have determined that the mean duration of discovered cartels is from 5 to 8 years." Come to think of it, the general idea is "If you, as an insurance company, foot the bill for these treatments with long-term benefits for your clients, this will cost $X, but save you $Y and other nearby insurance companies $Z in the future. Therefore, we the association will pay you $z < $Z to do it, and by assumption $Y+$Z > $X, so there should exist values of $z that make this profitable for both parties (anything between $X-$Y and $Z)." The carrot is the payment of $z. In terms of whether this association could become a price-fixing cartel... It's probably easier to verify compliance when compliance consists of performing a positive behavior (i.e. paying healthcare providers to do certain treatments; whatever the details of the payment, the important thing is whether the treatment was performed) instead of a negative behavior (i.e. not selling extra product at a lower price on the side). It doesn't seem obvious that this would make price-fixing much easier than it currently is.
    • djrobstep 8y ago
      Look folks, I'm open to any and all ideas, as long as it's not a decently funded public system.
  • votepaunchy 8y ago
    It’s Called “reinsurance” and it’s already implemented in many states for cases such as these (million dollar payouts) since post-ACA an insurer could go bankrupt on a single customer with a pre-existing condition. https://en.m.wikipedia.org/wiki/Reinsurance https://en.m.wikipedia.org/wiki/Reinsurance
    • jjoonathan 8y ago
      Privatize the gains, socialize the losses!
      • refurb 8y ago
        Reinsurance is entirely private, not sure what you mean by "socialize the loss".
        • jjoonathan 8y ago
          That's what I previously understood to be the case, but the post I replied to suggested something different -- that states were getting in on the reinsurance game. That's what I object to. Theoretically, it would be possible for states to do this responsibly in a manner that benefited everyone, but if I weigh the extent to which our system allows interested parties to pay for legislation against the extent to which the public is likely to make reinsurance rates a ballot issue, I can't help but put the probability of a responsible implementation at about 1-2% and the probability of "privatize the gains and socialize the losses" at 98-99%.
    • nradov 8y ago
      It's not possible a single insurer to go bankrupt due to a single expensive customer. State insurance commissioners wouldn't allow such a financially fragile insurance company to sell policies in the first place.
  • Ntrails 8y ago
    > Sounds like a great argument for Medicare for All, the NHS, or other nationalized systems. There's a good chance that NICE won't be willing to fund these treatments at all. Which is in no way a criticism of them (QALY is the just the most sensible semi-objective thing to base these decisions on) - but is worth highlighting when you say "free healthcare for all". It's only free for the healthcare considered to be good enough value for money.
    • rayiner 8y ago
      At the end of the day, that's what the calculus comes down to. Many of these gene therapies are for rare diseases, but creating them is still extremely expensive. At some point, the cost of dedicating those societal resources to saving those lives is too high. That's a hard thing to admit, so people look for a way around it. But at the end of the day somebody has to pay. If you tell the drug companies that the products are too expensive, and ask them to accept lower returns than comparable high-tech, high-risk, talent and capital-intensive industries, you're asking those companies and their shareholders to pay. (Or you're asking them to cross-subsidize those treatments with money from treatments that have a much larger number of patients.) People love that idea because it makes it seem like you're getting cheaper treatments for "free" but all you're doing is hiding the costs. There is a cost, it's now just hidden and unaccounted for. If you told Apple they could only charge $250 for an iPhone, what do you think would happen? Let the drug companies charge what they want to charge, and let government-funded healthcare programs decide what they're willing to pay to save a particular life. That's the most transparent and ethical thing to do.