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A good deal of that cost is due to private insurance. The free market approach has resulted in middlemen inserting themselves into the healthcare pipeline and l

A good deal of that cost is due to private insurance. The free market approach has resulted in middlemen inserting themselves into the healthcare pipeline and leech dollars from consumers. It isn't the only reason, but it is one of the biggest.

lotsofpulp 7y ago
A good deal is that doctors and healthcare providers in other countries don’t make well into the $300k+ range. There’s a lot of money to be made in the US versus other countries. Without the insurance companies, who would have the power negotiate pricing with the providers? Americans don’t find government intervention palatable unless the person is over 65.
- bart_spoon 7y ago
  > Without the insurance companies, who would have the power negotiate pricing with the providers? Healthcare costs have skyrocketed because of the negotiators. PBMs are the middlemen who negotiate healthcare prices between insurance companies and providers. I can't speak for hospitals and procedures, but in the pharmaceutical industry, it actually has led to a system where insurers and PBMs both benefit from drug prices increasing as opposed to decreasing. They aren't driving costs down, they are directly contributing to driving costs up.
  - lotsofpulp 7y ago
    Negotiation does not cause costs to rise, it’s because of lack of price transparency that let’s insiders play games. Make all the prices public, and watch all the excuses disappear. No insurance company will be able to answer the government or employer when they find out another insurance company was able to obtain the same medicine or healthcare for a lower price.
    - ajmurmann 7y ago
      I posted a link in a parallel thread to a surgical center that has all their prices on their website. Insurance companies refuse to work with them, supposedly for the reasons you state. So you are correct.
- ajmurmann 7y ago
  Recently the head of the Oklahoma Surgical Center was on [econtalk](https://www.econtalk.org/keith-smith-on-free-market-health-care/ https://www.econtalk.org/keith-smith-on-free-market-health-c...). That center was founded in the late 90s, had all their prices on their website, no insurance works with them and get their prices are effectively lower our equal to what they were twenty years ago and lower than at a regular hospital. On top of that the doctors make more when they work for this center than anywhere else. One thing I learned from the episode is that insurance companies get a reward for the delta between their negotiated price and the price a uninsured person would pay. This creates incentive for hospitals to raise their base price tag. Of course their is more to it. I cannot recommend the episode strong enough. To me the bottom line is that right now we don't have free market health care and we don't have socialized health care we have the worst of both. Maybe what we have is best received as crony capitalism health care. Taking a look at their website and just seeing the prices for procedures is incredibly refreshing: https://surgerycenterok.com/pricing https://surgerycenterok.com/pricing
  - lotsofpulp 7y ago
    That is very interesting. I had always thought that price obfuscation was good for both healthcare providers and insurance companies, since any price obfuscation is an advantage for the seller while the buyer is left confused about how much they are paying for what.
faet 7y ago
> it is one of the biggest. Disagree completely. US spent $3.65T on healthcare in 2018. or 3650 Billion. Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance. "But, public option will save the costs/salaries/buildings/etc that you pay to insurance." Yes, but not all costs. You'll need to make up a small difference. But, let's assume we only count money paid to 'care'. If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil. So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend. So realistically we'd see a savings of 0.6% to 3% savings. https://naic.org/documents/topic_insurance_industry_snapshots_2018_health_ins_ind_report.pdf https://naic.org/documents/topic_insurance_industry_snapshot...
- dragonwriter 7y ago
  > US spent $3.65T on healthcare in 2018. or 3650 Billion. > Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance. Profit is not the main source of the expense imposed by private health insurance, administrative costs are; Administrative costs are estimated at around $1.1 trillion nearly a third of the total, much of which, particularly billing and insurance-related (BIR) costs which account for about half of admin costs, would be eliminated in a single-payer or even public option systems, since the BIR costs imposed in current US public programs are far lower than private insurance (and some of those are still due to interaction with private insurance—e.g., coordination of benefits—and so would be erased even for public programs in a single-payer system.) https://www.americanprogress.org/issues/healthcare/reports/2019/04/08/468302/excess-administrative-costs-burden-u-s-health-care-system/ https://www.americanprogress.org/issues/healthcare/reports/2...
  - faet 7y ago
    >since the BIR costs imposed in current US public programs are far lower than private insurance Which is why I included this piece. >If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil. >So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend. Last year insurance spent $92 Bil on admin. Even if we 'save it by half' (comparing the 56 bil from your link) our best case savings of 106 bil drops to 60 bil. Or a reduction of 1.6% in healthcare spending or ~$160 per person. And hospitals will still have admin as they still have to bill the government.

lotsofpulp 7y ago

A good deal is that doctors and healthcare providers in other countries don’t make well into the $300k+ range. There’s a lot of money to be made in the US versus other countries. Without the insurance companies, who would have the power negotiate pricing with the providers? Americans don’t find government intervention palatable unless the person is over 65.

bart_spoon 7y ago
> Without the insurance companies, who would have the power negotiate pricing with the providers? Healthcare costs have skyrocketed because of the negotiators. PBMs are the middlemen who negotiate healthcare prices between insurance companies and providers. I can't speak for hospitals and procedures, but in the pharmaceutical industry, it actually has led to a system where insurers and PBMs both benefit from drug prices increasing as opposed to decreasing. They aren't driving costs down, they are directly contributing to driving costs up.
- lotsofpulp 7y ago
  Negotiation does not cause costs to rise, it’s because of lack of price transparency that let’s insiders play games. Make all the prices public, and watch all the excuses disappear. No insurance company will be able to answer the government or employer when they find out another insurance company was able to obtain the same medicine or healthcare for a lower price.
  - ajmurmann 7y ago
    I posted a link in a parallel thread to a surgical center that has all their prices on their website. Insurance companies refuse to work with them, supposedly for the reasons you state. So you are correct.
ajmurmann 7y ago
Recently the head of the Oklahoma Surgical Center was on [econtalk](https://www.econtalk.org/keith-smith-on-free-market-health-care/ https://www.econtalk.org/keith-smith-on-free-market-health-c...). That center was founded in the late 90s, had all their prices on their website, no insurance works with them and get their prices are effectively lower our equal to what they were twenty years ago and lower than at a regular hospital. On top of that the doctors make more when they work for this center than anywhere else. One thing I learned from the episode is that insurance companies get a reward for the delta between their negotiated price and the price a uninsured person would pay. This creates incentive for hospitals to raise their base price tag. Of course their is more to it. I cannot recommend the episode strong enough. To me the bottom line is that right now we don't have free market health care and we don't have socialized health care we have the worst of both. Maybe what we have is best received as crony capitalism health care. Taking a look at their website and just seeing the prices for procedures is incredibly refreshing: https://surgerycenterok.com/pricing https://surgerycenterok.com/pricing
- lotsofpulp 7y ago
  That is very interesting. I had always thought that price obfuscation was good for both healthcare providers and insurance companies, since any price obfuscation is an advantage for the seller while the buyer is left confused about how much they are paying for what.

faet 7y ago

> it is one of the biggest. Disagree completely. US spent $3.65T on healthcare in 2018. or 3650 Billion. Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance. "But, public option will save the costs/salaries/buildings/etc that you pay to insurance." Yes, but not all costs. You'll need to make up a small difference. But, let's assume we only count money paid to 'care'. If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil. So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend. So realistically we'd see a savings of 0.6% to 3% savings. https://naic.org/documents/topic_insurance_industry_snapshots_2018_health_ins_ind_report.pdf https://naic.org/documents/topic_insurance_industry_snapshot...

dragonwriter 7y ago
> US spent $3.65T on healthcare in 2018. or 3650 Billion. > Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance. Profit is not the main source of the expense imposed by private health insurance, administrative costs are; Administrative costs are estimated at around $1.1 trillion nearly a third of the total, much of which, particularly billing and insurance-related (BIR) costs which account for about half of admin costs, would be eliminated in a single-payer or even public option systems, since the BIR costs imposed in current US public programs are far lower than private insurance (and some of those are still due to interaction with private insurance—e.g., coordination of benefits—and so would be erased even for public programs in a single-payer system.) https://www.americanprogress.org/issues/healthcare/reports/2019/04/08/468302/excess-administrative-costs-burden-u-s-health-care-system/ https://www.americanprogress.org/issues/healthcare/reports/2...
- faet 7y ago
  >since the BIR costs imposed in current US public programs are far lower than private insurance Which is why I included this piece. >If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil. >So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend. Last year insurance spent $92 Bil on admin. Even if we 'save it by half' (comparing the 56 bil from your link) our best case savings of 106 bil drops to 60 bil. Or a reduction of 1.6% in healthcare spending or ~$160 per person. And hospitals will still have admin as they still have to bill the government.