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Apologies, I really didn't mean to make you rehearse for me how things work today. But I am curious about what your point of view is on whether the role for-pro

Apologies, I really didn't mean to make you rehearse for me how things work today. But I am curious about what your point of view is on whether the role for-profit health insurance providers play today is legitimate and salutory. We have our current system largely as a result of regulatory capture, so no amount of pointing to the status quo and shrugging at its complexity legitimizes it. Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket.

lotsofpulp 5y ago
>Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket. The "legitimacy" lies in the fact that that is what was politically possible to accomplish. I put legitimacy in quotes because I assume you mean legitimate in the context of some type of moral or ideological sense, which I do not find terribly interesting in this case, where there are many real world constraints at play. At the very root of it all is the fact that demand for healthcare greatly dwarfs supply of healthcare, starting from the simple fact that changing bedpans is a highly undesirable task and going all the way to the fact that medicinal knowledge is very difficult and costly to acquire. And so politics will be involved in how healthcare is distributed. You can even go back to your statement of >from doing what is in my own best interest 99% of people have no idea how to evaluate what is in their own best interest when it comes to medicine. Even doctors outside of their specialty probably do not know, and the tiny minority that do would acknowledge that at some point they are also guessing at the machinations of something complex like the body. The for profit (and not for profit) labeling is mostly a distraction. Doctors do not treat people without a profit, programmers do not program without a profit, and a managed care organization does not sell its services without a profit. These 2 big constraints shape how much and what kind of healthcare system we can afford: -low supply of healthcare relative to demand - requiring a system of allocation of resources -medicine being extremely difficult and possibility of doctor making mistake or being corrupted requiring second opinion - i.e. doctors and pharmacists employed by managed care organizations Obviously, everyone would love if everyone could get all the healthcare they could ever want at anytime they want. But our parameters do not allow for that. Back to the original question of why a for profit managed care organization needs to be involved at all? It does not, except politically, that was the solution the leaders agreed upon. I suspect politicians also like MCOs in the middle because it keeps the heat on the MCOs and deflects from them. We could have gone the NHS way with taxpayer funded healthcare, and the NHS handling all the administrative functions that managed care organizations do. But there was significant political opposition to that, probably because a lot of politically influential classes stood to lose in that proposition. So we have what we have. Note that to counteract excessive profit incentives, the ACA implemented minimum medical loss ratios and a healthcare exchange so that companies could compete for customers and hence have an incentive to keep premiums lower (presuming the existence of sufficient competing MCOs). Why not just cut all that out and let government deal with it? Because that is what was possible. https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-...
- nescioquid 5y ago
  > The "legitimacy" lies in the fact that that is what was politically possible to accomplish. Regulatory capture[0] narrowed the possible to only solutions involving for-profit health insurance corporations. If you don't find a form of corruption to be of interest here, I'd be especially interested to know why. [0] https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
  - lotsofpulp 5y ago
    I can see it being possible to have had some effect, but I do not see having been a major force. As far as I remember, Republicans did not want to expand access to healthcare at all if you did not already have it due to being very poor or old. Many Democrats wanted to expand taxpayer funded healthcare, but they did not have the numbers to get it passed. Hence a compromise had to be reached. Getting taxpayer funded healthcare administered by the federal government simply was not an option, and I have not seen evidence that it was because the health insurance business was lobbying every Republican. What I find more likely is that the more complex you make a system, the more you can engage in price discrimination via price obfuscation. A straight taxpayer funded healthcare option would have immediately impacted the bottom line, since government expenditures visibly go up, and would not allow a way to discriminate to those who receive the healthcare. The compromise, however, allows for all sorts of games to be played. Such as allocating more and better healthcare to older people in comparison to poorer people. This is accomplished simply by having different reimbursement polices in Medicare (old people, strong voting power) and Medicaid (poor people, weak voting power). Medicaid is also further broken down into being administer 50 different ways by 50 different states. Then you have employer self insured plans doing things the way they like, and employer subsidize plans doing things the way they like, and church plans that do not even provide healthcare. Basically, a way to expand healthcare in a way that still disproportionally allocates healthcare to richer and/or more politically influential people, but helping the others a little bit. At least we got the metal levels and healthcare.gov out of ACA so there is some ability to compare insurance products. And at the end of the day, even if you took away the cut that MCOs take for administering all this healthcare, it would mostly save around 5% to 10% (the profit margin plus savings from redundancies). MCOs currently pay out 75% to 80% of all premiums, and profit 5% or less, which leaves 15% to 20%, but the government would have to duplicate many of the functions of the MCO. https://www.kff.org/private-insurance/issue-brief/data-note-2021-medical-loss-ratio-rebates/ https://www.kff.org/private-insurance/issue-brief/data-note-... Even in a taxpayer funded scenario, I would bet the doctor is going to have to get approval from the system to provide a treatment above a certain cost.

lotsofpulp 5y ago

>Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket. The "legitimacy" lies in the fact that that is what was politically possible to accomplish. I put legitimacy in quotes because I assume you mean legitimate in the context of some type of moral or ideological sense, which I do not find terribly interesting in this case, where there are many real world constraints at play. At the very root of it all is the fact that demand for healthcare greatly dwarfs supply of healthcare, starting from the simple fact that changing bedpans is a highly undesirable task and going all the way to the fact that medicinal knowledge is very difficult and costly to acquire. And so politics will be involved in how healthcare is distributed. You can even go back to your statement of >from doing what is in my own best interest 99% of people have no idea how to evaluate what is in their own best interest when it comes to medicine. Even doctors outside of their specialty probably do not know, and the tiny minority that do would acknowledge that at some point they are also guessing at the machinations of something complex like the body. The for profit (and not for profit) labeling is mostly a distraction. Doctors do not treat people without a profit, programmers do not program without a profit, and a managed care organization does not sell its services without a profit. These 2 big constraints shape how much and what kind of healthcare system we can afford: -low supply of healthcare relative to demand - requiring a system of allocation of resources -medicine being extremely difficult and possibility of doctor making mistake or being corrupted requiring second opinion - i.e. doctors and pharmacists employed by managed care organizations Obviously, everyone would love if everyone could get all the healthcare they could ever want at anytime they want. But our parameters do not allow for that. Back to the original question of why a for profit managed care organization needs to be involved at all? It does not, except politically, that was the solution the leaders agreed upon. I suspect politicians also like MCOs in the middle because it keeps the heat on the MCOs and deflects from them. We could have gone the NHS way with taxpayer funded healthcare, and the NHS handling all the administrative functions that managed care organizations do. But there was significant political opposition to that, probably because a lot of politically influential classes stood to lose in that proposition. So we have what we have. Note that to counteract excessive profit incentives, the ACA implemented minimum medical loss ratios and a healthcare exchange so that companies could compete for customers and hence have an incentive to keep premiums lower (presuming the existence of sufficient competing MCOs). Why not just cut all that out and let government deal with it? Because that is what was possible. https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-...

nescioquid 5y ago
> The "legitimacy" lies in the fact that that is what was politically possible to accomplish. Regulatory capture[0] narrowed the possible to only solutions involving for-profit health insurance corporations. If you don't find a form of corruption to be of interest here, I'd be especially interested to know why. [0] https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
- lotsofpulp 5y ago
  I can see it being possible to have had some effect, but I do not see having been a major force. As far as I remember, Republicans did not want to expand access to healthcare at all if you did not already have it due to being very poor or old. Many Democrats wanted to expand taxpayer funded healthcare, but they did not have the numbers to get it passed. Hence a compromise had to be reached. Getting taxpayer funded healthcare administered by the federal government simply was not an option, and I have not seen evidence that it was because the health insurance business was lobbying every Republican. What I find more likely is that the more complex you make a system, the more you can engage in price discrimination via price obfuscation. A straight taxpayer funded healthcare option would have immediately impacted the bottom line, since government expenditures visibly go up, and would not allow a way to discriminate to those who receive the healthcare. The compromise, however, allows for all sorts of games to be played. Such as allocating more and better healthcare to older people in comparison to poorer people. This is accomplished simply by having different reimbursement polices in Medicare (old people, strong voting power) and Medicaid (poor people, weak voting power). Medicaid is also further broken down into being administer 50 different ways by 50 different states. Then you have employer self insured plans doing things the way they like, and employer subsidize plans doing things the way they like, and church plans that do not even provide healthcare. Basically, a way to expand healthcare in a way that still disproportionally allocates healthcare to richer and/or more politically influential people, but helping the others a little bit. At least we got the metal levels and healthcare.gov out of ACA so there is some ability to compare insurance products. And at the end of the day, even if you took away the cut that MCOs take for administering all this healthcare, it would mostly save around 5% to 10% (the profit margin plus savings from redundancies). MCOs currently pay out 75% to 80% of all premiums, and profit 5% or less, which leaves 15% to 20%, but the government would have to duplicate many of the functions of the MCO. https://www.kff.org/private-insurance/issue-brief/data-note-2021-medical-loss-ratio-rebates/ https://www.kff.org/private-insurance/issue-brief/data-note-... Even in a taxpayer funded scenario, I would bet the doctor is going to have to get approval from the system to provide a treatment above a certain cost.