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The government agency doesn’t stand to gain money by denying coverage though.

JamesBarney 4y ago
They will still have a budget, and policies to manage that budget they have to enforce.
rayiner 4y ago
In the US, insurers have to spend 80% of premiums on care. The more they spend on coverage (the 80%) the more they get to collect on overhead and profits (the 20%). They can pass the costs on in terms of escalating premiums. A government agency, by contrast, is on a budget and to get more money it has to get Congress to raise taxes. You think public transit agencies criminally prosecute turnstile jumpers for fun?
- ROTMetro 4y ago
  So you are saying insurance companies have incentives to drive up the cost of healthcare as part of their business model? That sounds very damaging considering the percentage of GDP healthcare takes up. Might make more sense to scrap that captured industry built on perverse incentives that has only gotten worse and worse during my lifetime. We are now at the point where people refuse ambulance service. This is NOT working.
  - rayiner 4y ago
    > So you are saying insurance companies have incentives to drive up the cost of healthcare as part of their business model? Yes, as part of the ACA. Stories about denied coverage create outrage, but the structural incentive for insurance companies is to cover too much. My dad is a public health expert. He was speaking with a German colleague recently about Germany’s extensive hospice system. He came back asking why we don’t do that here. > Might make more sense to scrap that captured industry built on perverse incentives that has only gotten worse and worse during my lifetime Lots of developed countries make their health systems work with a private health insurance based system. Germany, the Netherlands, Switzerland, and Japan all rely on that model. In Japan, for example, 70% of health care spending comes from employer-provided insurance or out of pocket spending. What’s different in all of those countries is: lower doctor and nurse pay, centralized price controls, greater supply of care providers, and aggressive cost-benefit based control over use of expensive treatment.
  - loeg 4y ago
    Yes, that is exactly the (problematic) incentive insurance companies have.
xyzzyz 4y ago
They still operate on a budget, and have to make decisions to stretch that budget. British NHS, for example, will deny coverage for a lot of procedures that are routinely covered by American private insurers, because they do not consider these treatments good value for the money. If you disagree, tough luck.

They will still have a budget, and policies to manage that budget they have to enforce.

In the US, insurers have to spend 80% of premiums on care. The more they spend on coverage (the 80%) the more they get to collect on overhead and profits (the 20%). They can pass the costs on in terms of escalating premiums. A government agency, by contrast, is on a budget and to get more money it has to get Congress to raise taxes. You think public transit agencies criminally prosecute turnstile jumpers for fun?

ROTMetro 4y ago
So you are saying insurance companies have incentives to drive up the cost of healthcare as part of their business model? That sounds very damaging considering the percentage of GDP healthcare takes up. Might make more sense to scrap that captured industry built on perverse incentives that has only gotten worse and worse during my lifetime. We are now at the point where people refuse ambulance service. This is NOT working.
- rayiner 4y ago
  > So you are saying insurance companies have incentives to drive up the cost of healthcare as part of their business model? Yes, as part of the ACA. Stories about denied coverage create outrage, but the structural incentive for insurance companies is to cover too much. My dad is a public health expert. He was speaking with a German colleague recently about Germany’s extensive hospice system. He came back asking why we don’t do that here. > Might make more sense to scrap that captured industry built on perverse incentives that has only gotten worse and worse during my lifetime Lots of developed countries make their health systems work with a private health insurance based system. Germany, the Netherlands, Switzerland, and Japan all rely on that model. In Japan, for example, 70% of health care spending comes from employer-provided insurance or out of pocket spending. What’s different in all of those countries is: lower doctor and nurse pay, centralized price controls, greater supply of care providers, and aggressive cost-benefit based control over use of expensive treatment.
- loeg 4y ago
  Yes, that is exactly the (problematic) incentive insurance companies have.

xyzzyz 4y ago

They still operate on a budget, and have to make decisions to stretch that budget. British NHS, for example, will deny coverage for a lot of procedures that are routinely covered by American private insurers, because they do not consider these treatments good value for the money. If you disagree, tough luck.