6 ms·

After Obama Care, insurance companies profits are now capped at 8% (think that is the number) of revenue (ie premiums) in the US. So one way to grow revenue is

After Obama Care, insurance companies profits are now capped at 8% (think that is the number) of revenue (ie premiums) in the US. So one way to grow revenue is to have higher costs per policy, pay out more, and charge higher premiums. If you are at 8% profit and you reduce your payouts as you are describing with preventative care, then you don't get to keep that money. You have to pay it back to the insurance buyers. Very perverse incentive.

kurthr 4y ago
The goal of the insurance companies is to make sure that all medical costs go up 10% every year so that their profits can increase and shareholders benefit. They are NOT negotiating lower pricing from medical providers, because why would they? Medical providers (and even individual care givers) have similar incentive structures to raise rates since they are paid only by insurance. The last local obstetricians were pushed into hospitals and large groups by insurance companies paying them 20-40% of prevailing fees. They now make more per procedure and don't have to pay for facilities or do billing. Why would the insurance company pay so much less? Because once the cartel is created their profit (and pricing) will double. That is for profit healthcare for you. Costs guaranteed to grow at DJI rates.
- IG_Semmelweiss 4y ago
  >>>>>That is for profit healthcare for you. Costs guaranteed to grow at DJI rates. Not true. The Surgical Center of Oklahoma, a purely for profit clinic that does not take insurance, has not raised the rates for any of their services since 1995. Yes, they have not raised rates...despite inflation That's true profit healthcare. What we have is a monster hybrid between government healthcare and subsidized, monopoly care
  - triceratops 4y ago
    Unfortunately no one is lobbying for a truly free market in healthcare. For instance, at all the supply-side restrictions on new physicians and hospitals. Limited residency spots, certificates of need whatever. Ideally the party in opposition to government-funded healthcare would do this.
  - gruez 4y ago
    >Not true. The Surgical Center of Oklahoma, a purely for profit clinic that does not take insurance, has not raised the rates for any of their services since 1995. Source?
    - IG_Semmelweiss 4y ago
      https://mises.org/wire/why-arent-there-more-free-market-surgery-centers-and-clinics https://mises.org/wire/why-arent-there-more-free-market-surg...
      - gruez 4y ago
        This portion of the linked article seems to contradict your claim of "has not raised the rates for any of their services since 1995" >Had the pathology fees that apply to the examination of breast masses not increased, our price would be the same now as it was in 1997, but alas it is now $2,365. Only three other fees have increased since we began quoting them over the phone in 1997. That said, I'll admit that the claim is broadly true.
  - kurthr 4y ago
    Well, I'm not sure I buy it, and the actual date is 1997, but here is the story on Mises.org from 2021. https://mises.org/wire/why-arent-there-more-free-market-surgery-centers-and-clinics https://mises.org/wire/why-arent-there-more-free-market-surg...
- nradov 4y ago
  That is not really how the modern medical insurance business works. Most group buyers such as employers are now self insured. The medical "insurance" companies no longer bear much risk, they merely administer claims and manage provider networks. This business is intensely competitive with low profit margins. Insurance companies have to negotiate lower costs in order to sell to their customers, which are primarily employers that buy plans on behalf of their employees. Costs have continued to rise because provider organizations have been merging in order to gain more market negotiating power. Expensive patented drugs and medical devices also play a major role in driving up costs.
  - junofan 4y ago
    Ya insurers are price takers. They’re fine being the bad guy though—your employer picks them, not you. It’s unpopular to point fingers at provider orgs.

kurthr 4y ago

The goal of the insurance companies is to make sure that all medical costs go up 10% every year so that their profits can increase and shareholders benefit. They are NOT negotiating lower pricing from medical providers, because why would they? Medical providers (and even individual care givers) have similar incentive structures to raise rates since they are paid only by insurance. The last local obstetricians were pushed into hospitals and large groups by insurance companies paying them 20-40% of prevailing fees. They now make more per procedure and don't have to pay for facilities or do billing. Why would the insurance company pay so much less? Because once the cartel is created their profit (and pricing) will double. That is for profit healthcare for you. Costs guaranteed to grow at DJI rates.

IG_Semmelweiss 4y ago
>>>>>That is for profit healthcare for you. Costs guaranteed to grow at DJI rates. Not true. The Surgical Center of Oklahoma, a purely for profit clinic that does not take insurance, has not raised the rates for any of their services since 1995. Yes, they have not raised rates...despite inflation That's true profit healthcare. What we have is a monster hybrid between government healthcare and subsidized, monopoly care
- triceratops 4y ago
  Unfortunately no one is lobbying for a truly free market in healthcare. For instance, at all the supply-side restrictions on new physicians and hospitals. Limited residency spots, certificates of need whatever. Ideally the party in opposition to government-funded healthcare would do this.
- gruez 4y ago
  >Not true. The Surgical Center of Oklahoma, a purely for profit clinic that does not take insurance, has not raised the rates for any of their services since 1995. Source?
  - IG_Semmelweiss 4y ago
    https://mises.org/wire/why-arent-there-more-free-market-surgery-centers-and-clinics https://mises.org/wire/why-arent-there-more-free-market-surg...
    - gruez 4y ago
      This portion of the linked article seems to contradict your claim of "has not raised the rates for any of their services since 1995" >Had the pathology fees that apply to the examination of breast masses not increased, our price would be the same now as it was in 1997, but alas it is now $2,365. Only three other fees have increased since we began quoting them over the phone in 1997. That said, I'll admit that the claim is broadly true.
- kurthr 4y ago
  Well, I'm not sure I buy it, and the actual date is 1997, but here is the story on Mises.org from 2021. https://mises.org/wire/why-arent-there-more-free-market-surgery-centers-and-clinics https://mises.org/wire/why-arent-there-more-free-market-surg...
nradov 4y ago
That is not really how the modern medical insurance business works. Most group buyers such as employers are now self insured. The medical "insurance" companies no longer bear much risk, they merely administer claims and manage provider networks. This business is intensely competitive with low profit margins. Insurance companies have to negotiate lower costs in order to sell to their customers, which are primarily employers that buy plans on behalf of their employees. Costs have continued to rise because provider organizations have been merging in order to gain more market negotiating power. Expensive patented drugs and medical devices also play a major role in driving up costs.
- junofan 4y ago
  Ya insurers are price takers. They’re fine being the bad guy though—your employer picks them, not you. It’s unpopular to point fingers at provider orgs.