8 ms·

They key point is that healthcare insurers, pharmacy benefit managers, pharmacies, and healthcare groups are all owned by one holding company which benefits whe

by kurthr 3y ago

They key point is that healthcare insurers, pharmacy benefit managers, pharmacies, and healthcare groups are all owned by one holding company which benefits when prices go up. People think that the insurer will try to keep costs down, but in fact, if prices go up they can charge more for insurance... the only way they can keep increasing shareholder value is for prices to go up. So they do, and by owning the entire chain they can force that to happen. There is no market. Insurers will not negotiate prices lower, it is against their interests!

throwway120385 3y ago
In Optum/UHC's specific case, I can give an example of this from using their IVF benefits. In one plan we had from them my partner was entitled to 10k for treatment and 15k for medications. Optum Specialty Pharmacy was the only in-network pharmacy for the IVF drugs. When we started ordering IVF medications under insurance, we found out that the price the pharmacy charged insurance was over 3x what their cash price was for nearly everything. We ran out of the 15k in a single retrieval cycle because of this, and wound up with a bill to the tune of several thousand dollars because one specific prescription ended up partially billing to insurance. People often lose sight of the fact that when you bill insurance, even if the item is only partially covered, the charge you must pay is the insurance negotiated rate even if the insurance is capped well below the price of the charge. We concluded that the medication benefit was a huge racket because of this, and I would imagine Optum rakes in thousands of dollars per patient on something that according to the policy documents is fully covered. Meanwhile other nationwide pharmacies like Alto Pharmacy do offer the drugs at very reasonable prices, often 1/5 to 1/10 what Optum was charging.
deleted 3y ago
[deleted]
0xbadcafebee 3y ago
If only there were some way to give everyone in a country necessary and preventive health care regardless of whether they could pay for it or not. Like imagine a developed nation with health care for everyone? Where even the poor can have necessary medical procedures, medicine, etc without having to be buried under medical debt? Lol what a pipe dream
- goodkittie396 3y ago
  What is the view on healthcare spending for IVF for 45-year-old woman? Asking because you replied right after a post about IVF and failed IVF treatments. Don’t mean to pray. I’m just very very curious Why should I pay for somebody’s Viagra? Or IVF treatment? Because I am healthy? Diabetes is reversible with the healthy diet, no? Why not focus on reducing the costs.
  - tekknik 3y ago
    Hard pass. Critical care I may be able to be convinced of, but not IVF, sex changes, hormone treatments outside of menopause or other similar issues, or anything else deemed optional.
- tekknik 3y ago
  Now imagine a world where everybody had a million dollars in the bank, a 25 room mansion, and 30 cars. Imagining things is fun, then reality and costs come crashing in. Go look at the state of VA healthcare for an example.
  - throwway120385 3y ago
    VA healthcare sucks because people are more comfortable paying lip service to veterans than in actually helping veterans have better lives after their service is over. We're perfectly happy to say "Thank you for your service" but nobody is willing to fund things like a functioning medical system or a working payroll system for the military. You know, things that actually improve the quality of their lives. This is absolutely a problem we can fix.
- xyzzy4747 3y ago
  So the solution is to create even a bigger monopoly?
  - barbazoo 3y ago
    Is that what happened in countries with universal healthcare?
nojito 3y ago
> People think that the insurer will try to keep costs down, but in fact, if prices go up they can charge more for insurance This isn't really how they make money. Insurers make their profits by limiting the amount that they have to pay out. The reason why owning both the care provider and the insurer is wrong is that it makes denying or "moving care" to less costly locations easier.
- nradov 3y ago
  Nope, that's not how it works anymore. First, insurers (payers) no longer even provide much insurance. The majority of their business is now managing networks and processing claims on behalf of self-insured employers. Second, payer profit margins are now capped by the 80% minimum medical loss ratio introduced by the Affordable Care Act (Obamacare). Payers actually make less profit when they deny care. When coverage for certain services is denied it's usually because your employer designed your plan with strict limits.
  - nojito 3y ago
    MA plans complicate this. There's a reason why everyone but United is getting out of the MA space, because united is growing despite medicare cutting payments.
- Uvix 3y ago
  Insurers used to make their money that way. But now that US health care insurers are required to use at least 80% of premiums to pay health care costs, they've lost the incentive to keep prices low. Increasing their profit now requires paying out more in claims.
  - nojito 3y ago
    Not really true. United's long play is with medicare advantage. They plan to add an insane 450k new members by 2024. https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhealth-group-to-eclipse-400-billion-in-revenue-next-year/?sh=39afb61956a2 https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhe... https://www.healthcarefinancenews.com/news/unitedhealths-medicare-advantage-growth-below-expectations https://www.healthcarefinancenews.com/news/unitedhealths-med... This is a great example why United was the sole insurer who was able to absorb the Medicare cuts while everyone else is shedding their MA exposure.
roenxi 3y ago
It is interesting to draw a comparison with food. Practically speaking we can't go 24 hours without food, it is essential. Most people are totally dependent on others to provide their food; look at any city - the population density is too high for people to grow their own food. The food providers have no inherent incentive to make food cheap. It is totally against their interests. A shallow look at the situation suggests food providers should be able to squeeze people until all the money goes to farmers. But that isn't what happens, food is actually absurdly cheap and available given how important it is and how much needs to happen to produce it. The situation with insurers is similar. If there was a real market that people could enter, competitive pressure would force them to be cheap. If the market was, hypothetically, choked by regulation then they'd be in a great position to charge absurd prices. Market incentives are odd beasts. It is technically against the interests of the insurers to negotiate lower prices - unless they are competing with other insurers. Then it is in their interests to offer fair prices. (if it isn't clear, I think I'm agreeing with you)
- hx8 3y ago
  I think there are a couple of pitfalls in looking at healthcare as a free market. * People often have to make uninformed decisions or have decisions made for them in an emergency. This naturally puts them at an economic disadvantage in the market place. We consider it unfair because it's the sick, injured that are disadvantaged. * We have strict regulations about ensuring access to health care. People aren't turned away in an emergency. Sick people aren't treated differently for insurance. There are thousands of other regulations we do that shape the 'free' market. * Food is far from a free market, although it might look that way from the consumer standpoint. The government helps in both ensuring a strong supply with farm bills and giving $114B/yr in SNAP on the consumption side.
  - roenxi 3y ago
    1. I suspect the vast majority of engagement (and, spending) with the medical industry is non-emergency care. At least not emergency care required in the next hour or so. There are edge cases, but even considering most of what I've seen going to the emergency room there has been time to choose which hospital to head for. Basically I think this is over-weighting the importance of emergency care. I don't have any stats on hand, but people entering the hospital system at ultra-short-notice is quite rare in my experience compared to having a bit of time to think. Most healthcare engagement seems to be for planned consultation, planned surgeries, emergencies but with hours to spare and then urgent emergencies. In about that order of frequency, and heavily weighted towards the first few cases. 2. People are more than capable of figuring out which of two options are cheaper. The ability of consumers to reject goods over tiny price differentials is legendary. 3. If people aren't up for the challenge of figuring out what to do in an emergency, then in a fair market you'd probably find the insurer starts to step in and assist. If the insurer has to compete for business, they have a very strong incentive to make sure their customers get good and cost-effective care. 4. And on food markets; those are distortions to the market, not limits on it's freedom. A free market can be distorted with subsidies and it is still free. The important factors are whether new providers can enter the market and whether they are allowed to compete on price and service quality.
rapatel0 3y ago
This is one of the unintended consequences of Obamacare. The act mandates that administration is a fixed percentage of the revenue. Effectively this created the same perverse incentive as cost+ contracts that have hobbled the DoD. There is no incentive to keep costs down. Value based care models are however super effective when properly implemented. Look at Kaiser Permanente. Infinitely better than the alternatives.

by kurthr 3y ago

throwway120385 3y ago

In Optum/UHC's specific case, I can give an example of this from using their IVF benefits. In one plan we had from them my partner was entitled to 10k for treatment and 15k for medications. Optum Specialty Pharmacy was the only in-network pharmacy for the IVF drugs. When we started ordering IVF medications under insurance, we found out that the price the pharmacy charged insurance was over 3x what their cash price was for nearly everything. We ran out of the 15k in a single retrieval cycle because of this, and wound up with a bill to the tune of several thousand dollars because one specific prescription ended up partially billing to insurance. People often lose sight of the fact that when you bill insurance, even if the item is only partially covered, the charge you must pay is the insurance negotiated rate even if the insurance is capped well below the price of the charge. We concluded that the medication benefit was a huge racket because of this, and I would imagine Optum rakes in thousands of dollars per patient on something that according to the policy documents is fully covered. Meanwhile other nationwide pharmacies like Alto Pharmacy do offer the drugs at very reasonable prices, often 1/5 to 1/10 what Optum was charging.

deleted 3y ago

[deleted]

0xbadcafebee 3y ago

If only there were some way to give everyone in a country necessary and preventive health care regardless of whether they could pay for it or not. Like imagine a developed nation with health care for everyone? Where even the poor can have necessary medical procedures, medicine, etc without having to be buried under medical debt? Lol what a pipe dream

goodkittie396 3y ago
What is the view on healthcare spending for IVF for 45-year-old woman? Asking because you replied right after a post about IVF and failed IVF treatments. Don’t mean to pray. I’m just very very curious Why should I pay for somebody’s Viagra? Or IVF treatment? Because I am healthy? Diabetes is reversible with the healthy diet, no? Why not focus on reducing the costs.
- tekknik 3y ago
  Hard pass. Critical care I may be able to be convinced of, but not IVF, sex changes, hormone treatments outside of menopause or other similar issues, or anything else deemed optional.
tekknik 3y ago
Now imagine a world where everybody had a million dollars in the bank, a 25 room mansion, and 30 cars. Imagining things is fun, then reality and costs come crashing in. Go look at the state of VA healthcare for an example.
- throwway120385 3y ago
  VA healthcare sucks because people are more comfortable paying lip service to veterans than in actually helping veterans have better lives after their service is over. We're perfectly happy to say "Thank you for your service" but nobody is willing to fund things like a functioning medical system or a working payroll system for the military. You know, things that actually improve the quality of their lives. This is absolutely a problem we can fix.
xyzzy4747 3y ago
So the solution is to create even a bigger monopoly?
- barbazoo 3y ago
  Is that what happened in countries with universal healthcare?

nojito 3y ago

> People think that the insurer will try to keep costs down, but in fact, if prices go up they can charge more for insurance This isn't really how they make money. Insurers make their profits by limiting the amount that they have to pay out. The reason why owning both the care provider and the insurer is wrong is that it makes denying or "moving care" to less costly locations easier.

nradov 3y ago
Nope, that's not how it works anymore. First, insurers (payers) no longer even provide much insurance. The majority of their business is now managing networks and processing claims on behalf of self-insured employers. Second, payer profit margins are now capped by the 80% minimum medical loss ratio introduced by the Affordable Care Act (Obamacare). Payers actually make less profit when they deny care. When coverage for certain services is denied it's usually because your employer designed your plan with strict limits.
- nojito 3y ago
  MA plans complicate this. There's a reason why everyone but United is getting out of the MA space, because united is growing despite medicare cutting payments.
Uvix 3y ago
Insurers used to make their money that way. But now that US health care insurers are required to use at least 80% of premiums to pay health care costs, they've lost the incentive to keep prices low. Increasing their profit now requires paying out more in claims.
- nojito 3y ago
  Not really true. United's long play is with medicare advantage. They plan to add an insane 450k new members by 2024. https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhealth-group-to-eclipse-400-billion-in-revenue-next-year/?sh=39afb61956a2 https://www.forbes.com/sites/brucejapsen/2023/11/28/unitedhe... https://www.healthcarefinancenews.com/news/unitedhealths-medicare-advantage-growth-below-expectations https://www.healthcarefinancenews.com/news/unitedhealths-med... This is a great example why United was the sole insurer who was able to absorb the Medicare cuts while everyone else is shedding their MA exposure.

roenxi 3y ago

It is interesting to draw a comparison with food. Practically speaking we can't go 24 hours without food, it is essential. Most people are totally dependent on others to provide their food; look at any city - the population density is too high for people to grow their own food. The food providers have no inherent incentive to make food cheap. It is totally against their interests. A shallow look at the situation suggests food providers should be able to squeeze people until all the money goes to farmers. But that isn't what happens, food is actually absurdly cheap and available given how important it is and how much needs to happen to produce it. The situation with insurers is similar. If there was a real market that people could enter, competitive pressure would force them to be cheap. If the market was, hypothetically, choked by regulation then they'd be in a great position to charge absurd prices. Market incentives are odd beasts. It is technically against the interests of the insurers to negotiate lower prices - unless they are competing with other insurers. Then it is in their interests to offer fair prices. (if it isn't clear, I think I'm agreeing with you)

hx8 3y ago
I think there are a couple of pitfalls in looking at healthcare as a free market. * People often have to make uninformed decisions or have decisions made for them in an emergency. This naturally puts them at an economic disadvantage in the market place. We consider it unfair because it's the sick, injured that are disadvantaged. * We have strict regulations about ensuring access to health care. People aren't turned away in an emergency. Sick people aren't treated differently for insurance. There are thousands of other regulations we do that shape the 'free' market. * Food is far from a free market, although it might look that way from the consumer standpoint. The government helps in both ensuring a strong supply with farm bills and giving $114B/yr in SNAP on the consumption side.
- roenxi 3y ago
  1. I suspect the vast majority of engagement (and, spending) with the medical industry is non-emergency care. At least not emergency care required in the next hour or so. There are edge cases, but even considering most of what I've seen going to the emergency room there has been time to choose which hospital to head for. Basically I think this is over-weighting the importance of emergency care. I don't have any stats on hand, but people entering the hospital system at ultra-short-notice is quite rare in my experience compared to having a bit of time to think. Most healthcare engagement seems to be for planned consultation, planned surgeries, emergencies but with hours to spare and then urgent emergencies. In about that order of frequency, and heavily weighted towards the first few cases. 2. People are more than capable of figuring out which of two options are cheaper. The ability of consumers to reject goods over tiny price differentials is legendary. 3. If people aren't up for the challenge of figuring out what to do in an emergency, then in a fair market you'd probably find the insurer starts to step in and assist. If the insurer has to compete for business, they have a very strong incentive to make sure their customers get good and cost-effective care. 4. And on food markets; those are distortions to the market, not limits on it's freedom. A free market can be distorted with subsidies and it is still free. The important factors are whether new providers can enter the market and whether they are allowed to compete on price and service quality.

rapatel0 3y ago

This is one of the unintended consequences of Obamacare. The act mandates that administration is a fixed percentage of the revenue. Effectively this created the same perverse incentive as cost+ contracts that have hobbled the DoD. There is no incentive to keep costs down. Value based care models are however super effective when properly implemented. Look at Kaiser Permanente. Infinitely better than the alternatives.