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> PRECISELY. If everybody understands the negotiated rate, then any size organization can argue for that rate. This would make it easier for smaller-scale compa
by subhobroto 7y ago
> PRECISELY. If everybody understands the negotiated rate, then any size organization can argue for that rate. This would make it easier for smaller-scale companies to get the same rates as larger plans and also reduce some of the incentives for large insurer / care company mergers that seem to be really rent-seeking given the industry comment on this order.
The fallacy is assuming large insurer / care companies are interested in paying more to providers or keeping a lot for themselves.
Insurers work on margins, floats and risk pools.
More the better.
They would rather have more insured to have a larger float, a more diverse risk pool and lesser margins but more volume.
Also, why would a large insurer be OK with a smaller-scale company getting the same rate?
No market I know of works that way - a larger negotiating body always gets an advantage over a smaller negotiating body.
Which is WHY smaller companies want to become larger companies.
Otherwise it would not make sense - it's way easier and cheaper to run a smaller company than a larger company for example.
You and I can't start NewCo and demand the State of Alaska give us tax credits.
Alaska will bend over backwards for Amazon.
That's how it works.
I wrote a response to this article here: https://news.ycombinator.com/item?id=20281150 https://news.ycombinator.com/item?id=20281150
Would love any input!