4 ms·

Private insurance profit margins are, on average, about 5%. Reducing healthcare costs by 5% doesn't get you very far.

by bhupy 6y ago

karpierz 6y ago
The public option isn't supposed to replicate private insurance. Monopolistic/legislative powers allow the public option to set market rates.
- bhupy 6y ago
  That's true, in theory, but in practice Medicare fee schedules aren't that much better than private insurers. Additionally, providers themselves are starting to charge out-of-network rates that are LOWER than Medicare fee schedules. For example, Wal-Mart has launched healthcare in Georgia, charging $25 for a cleaning[1], which is significantly lower than the amount for a cleaning (procedure code D1110) set by Medicare/Medicaid. You can look it up yourself by visiting the FAIR Health code lookup tool (https://www.fairhealthconsumer.org/dental/results https://www.fairhealthconsumer.org/dental/results), and setting the ZIP code to that of Carlton, GA (location of the Wal-Mart clinic), 30627. The average allowed amount is $64. Finally, the US government has historically been pretty bad at setting prices, as a monopsony buyer. The US military spends more per capita on the military largely because it pays more per-soldier, per-fighter jet, etc than any other nation on the planet. You would think that, as the sole buyer of US defense sector fighter jets, it could negotiate better rates. The F-35 is expected to cost $1.5 trillion (!!) over its lifetime, and the US enjooys monopoly/legislative powers over that cost. Another example: NASA's planned SLS moon mission is a bit of a disaster — way over budget and way behind schedule. Because the boosters aren't reusable, each launch is expected to cost $1B (with a B) dollars — EACH launch! Meanwhile SpaceX's target cost-per-launch is $50M. So while you're right that, in theory, a monopsony can extract the lowest possible price, there's absolutely no guarantee of this, indeed American empirical evidence has at times proven otherwise. [1] https://www.bloomberg.com/news/articles/2020-02-25/walmart-takes-on-cvs-amazon-with-low-price-health-care-clinics https://www.bloomberg.com/news/articles/2020-02-25/walmart-t...
MiroF 6y ago
Even conservative economists are more charitable and cogent in their critique of m4a than this comment is.
- bhupy 6y ago
  ...can you elaborate? I can tell you ALL about M4A vs private insurance, I currently work at a claims adjuster, and adjust claims myself.
andreareina 6y ago
How about eliminating medical bankruptcy? A lot of Americans I know are underinsured (can't afford any more) and one serious medical event away from bankruptcy. The amounts I've heard it cost for just an ambulance ride are insane. Or if that's too ambitious, how about just knowing that insurance isn't going to deny coverage just because I went to the wrong clinic/hospital? Nevermind that if I've been in an accident I'm not exactly going to be able to choose where I go.
- bhupy 6y ago
  > How about eliminating medical bankruptcy? A lot of Americans I know are underinsured (can't afford any more) and one serious medical event away from bankruptcy. The amounts I've heard it cost for just an ambulance ride are insane. Yeah this is definitely a worthwhile policy solution. Universal catastrophic coverage would also be a pretty solid compromise, especially since that would essentially be "single payer" for financially ruinous treatments. Ambulance ride costs are indeed insane, and something that even municipal cities can (and should) operate for free just like fire departments. > Or if that's too ambitious, how about just knowing that insurance isn't going to deny coverage just because I went to the wrong clinic/hospital? Nevermind that if I've been in an accident I'm not exactly going to be able to choose where I go. Yup, also a great solution. I work at a claims processor and have processed claims myself — the current system is asinine. Simply ensuring that all providers charge the same rate to all patients, and for that charge to be transparent upfront can probably go a long way to improving the status quo.

Private insurance profit margins are, on average, about 5%. Reducing healthcare costs by 5% doesn't get you very far.

by bhupy 6y ago

Private insurance profit margins are, on average, about 5%. Reducing healthcare costs by 5% doesn't get you very far.

The public option isn't supposed to replicate private insurance. Monopolistic/legislative powers allow the public option to set market rates.

bhupy 6y ago
That's true, in theory, but in practice Medicare fee schedules aren't that much better than private insurers. Additionally, providers themselves are starting to charge out-of-network rates that are LOWER than Medicare fee schedules. For example, Wal-Mart has launched healthcare in Georgia, charging $25 for a cleaning[1], which is significantly lower than the amount for a cleaning (procedure code D1110) set by Medicare/Medicaid. You can look it up yourself by visiting the FAIR Health code lookup tool (https://www.fairhealthconsumer.org/dental/results https://www.fairhealthconsumer.org/dental/results), and setting the ZIP code to that of Carlton, GA (location of the Wal-Mart clinic), 30627. The average allowed amount is $64. Finally, the US government has historically been pretty bad at setting prices, as a monopsony buyer. The US military spends more per capita on the military largely because it pays more per-soldier, per-fighter jet, etc than any other nation on the planet. You would think that, as the sole buyer of US defense sector fighter jets, it could negotiate better rates. The F-35 is expected to cost $1.5 trillion (!!) over its lifetime, and the US enjooys monopoly/legislative powers over that cost. Another example: NASA's planned SLS moon mission is a bit of a disaster — way over budget and way behind schedule. Because the boosters aren't reusable, each launch is expected to cost $1B (with a B) dollars — EACH launch! Meanwhile SpaceX's target cost-per-launch is $50M. So while you're right that, in theory, a monopsony can extract the lowest possible price, there's absolutely no guarantee of this, indeed American empirical evidence has at times proven otherwise. [1] https://www.bloomberg.com/news/articles/2020-02-25/walmart-takes-on-cvs-amazon-with-low-price-health-care-clinics https://www.bloomberg.com/news/articles/2020-02-25/walmart-t...

MiroF 6y ago

Even conservative economists are more charitable and cogent in their critique of m4a than this comment is.

bhupy 6y ago
...can you elaborate? I can tell you ALL about M4A vs private insurance, I currently work at a claims adjuster, and adjust claims myself.

andreareina 6y ago

How about eliminating medical bankruptcy? A lot of Americans I know are underinsured (can't afford any more) and one serious medical event away from bankruptcy. The amounts I've heard it cost for just an ambulance ride are insane. Or if that's too ambitious, how about just knowing that insurance isn't going to deny coverage just because I went to the wrong clinic/hospital? Nevermind that if I've been in an accident I'm not exactly going to be able to choose where I go.

bhupy 6y ago
> How about eliminating medical bankruptcy? A lot of Americans I know are underinsured (can't afford any more) and one serious medical event away from bankruptcy. The amounts I've heard it cost for just an ambulance ride are insane. Yeah this is definitely a worthwhile policy solution. Universal catastrophic coverage would also be a pretty solid compromise, especially since that would essentially be "single payer" for financially ruinous treatments. Ambulance ride costs are indeed insane, and something that even municipal cities can (and should) operate for free just like fire departments. > Or if that's too ambitious, how about just knowing that insurance isn't going to deny coverage just because I went to the wrong clinic/hospital? Nevermind that if I've been in an accident I'm not exactly going to be able to choose where I go. Yup, also a great solution. I work at a claims processor and have processed claims myself — the current system is asinine. Simply ensuring that all providers charge the same rate to all patients, and for that charge to be transparent upfront can probably go a long way to improving the status quo.