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Key problem is that the average consumer is with their health insurance provider for about 3 years. This means that when you have drugs that provide significant

Key problem is that the average consumer is with their health insurance provider for about 3 years. This means that when you have drugs that provide significant health and cost benefits in the long term, the patient's current insurer pays the cost but another company receives most of the benefits. It would help tremendously if the US changed the rules and made it so most people got insurance directly and not through their employer.

Domenic_S 2y ago
> average consumer is with their health insurance provider for about 3 years Are they? That sounds right for how long they're with an employer, but if I move companies I'm probably going with the same insurance carrier under the new company's plan. The total list of carriers [0] is pretty dang small (and not every licensed company is doing new policies). Even if what you say is true it seems like reciprocity would make up for it - Company A pays and Company B benefits like you say, but for every situation like that there's a situation where Company B pays and Company A benefits. [0] https://www.insurance.ca.gov/01-consumers/110-health/20-look/hcpcarriers.cfm https://www.insurance.ca.gov/01-consumers/110-health/20-look...
- pixl97 2y ago
  > That sounds right for how long they're with an employer, but if I move companies I'm probably going with the same insurance carrier under the new company's plan. At least middle sized companies seem to change insurers commonly enough that both my wife and I have had our employers change said insurers in the middle of our employment.
abletonlive 2y ago
That's not really a key problem and not how insurance companies evaluate cost/benefit. We overall want a healthier population and if you think hard enough about it, you lose some subscribers and gain some subscribers so it's a win win for all health insurance companies. source: i'm in the health insurance industry
- s1artibartfast 2y ago
  My understanding is that insurance companies have fixed profit margins by law— essentially a cost plus model (just like California power companies). So Why don't health insurers wan't the least healthy and most expensive general population in the long run?
  - nobody9999 2y ago
    >My understanding is that insurance companies have fixed profit margins by law Right. And (IIUC) those profits are set at 10% of revenue, not revenue - costs. That creates perverse incentives to increase premiums above all else.
    - vel0city 2y ago
      That's not accurate. The Medical Loss Ratio (MLR) created by the ACA is 80% of revenue collected must be spent paying benefits. So, 20% of revenue goes towards all operational expenses and profits. If they go over that ratio, they need to refund to policy holders.
      - s1artibartfast 2y ago
        So maximize medical costs and minimize opex for best returns. At least opex is in the calculation, California utilities don't even have that. It goes a long way to explaining why I pay 50c/kwh in sf (CA private) vs 15c in Sacramento (municipal) or Nevada (private without cost+)
      - nobody9999 2y ago
        I stand corrected. Thank you. I think my larger point, that jacking up premiums increases revenue, thus increasing the opex/profit pool (regardless of the percentages) is a perverse incentive to jack up premiums as much as possible As in a 3-5 year (which is about what I've seen with ACA premiums) doubling of premiums, thus doubling the potential profit pool without increasing opex in any way. In fact, the use of third parties to provide "pre-approval" for an increasing number of drugs, tests and procedures reduces opex, leaving more of that 20% for profits. In fact, my insurer has consistently raised premiums while squeezing providers who are now charging separate fees (meaning additional co-pays for me) for stuff that was once included in a single fee (one example is charging an "outpatient facilities fee" in addition to the copay for seeing a doctor. Increasing my costs, while the insurance company can just shrug and say, "that's not covered, suck it up!" Meanwhile, doctors (especially GPs) are over-scheduled (my GP is scheduled to see every patient in 20 minutes or less), allowing the practices to charge for seeing more patients -- increasing their profits -- at the expense of patient health. And heaven forfend having multiple related issues which require more than one specialty -- you're just shunted from specialist to specialist without much (if any) communication and a shrug if something unrelated to the specialist's area comes up. The point is that the whole industry is fraught with perverse incentives that drive up costs, reduce the quality of care and a laser focus on the wrong stuff (i.e., services provided vs. holistic health outcomes). It's disgusting and harms people. You'd think that by now we'd have decent healthcare. But the perverse incentives pushing toward financialization of, well, pretty much everything medically related, are actually impacting the average lifespans of Americans. And more's the pity.
darth_avocado 2y ago
On an average, the cost averages out.
HumblyTossed 2y ago
> It would help tremendously if the US changed the rules and made it so most people got insurance directly and not through their employer. This seriously needs to happen. Before we can have ANY other reform, this needs to happen.
deleted 2y ago
[deleted]
l1tany11 2y ago
I think decoupling health insurance from one’s employer could greatly change the entire healthcare industry. It would go a very long way to reduce cost obfuscation, among many other things. So many people think their health insurance costs $30 a month because that’s their “contribution”. Unfortunately it will never happen, as it’s insanely politically unviable as almost no one wants that to happen. It’s the ultimate free market approach, but then people would have to pay for something they “get for free”. And once they realized how insane the system is, and how much everything actually costs, you might see knock on effects from that. Some bad, some good. It would be an experiment for sure. Single payer is more realistic, even if it doesn’t do much to affect many of the underlying issues.

Domenic_S 2y ago

> average consumer is with their health insurance provider for about 3 years Are they? That sounds right for how long they're with an employer, but if I move companies I'm probably going with the same insurance carrier under the new company's plan. The total list of carriers [0] is pretty dang small (and not every licensed company is doing new policies). Even if what you say is true it seems like reciprocity would make up for it - Company A pays and Company B benefits like you say, but for every situation like that there's a situation where Company B pays and Company A benefits. [0] https://www.insurance.ca.gov/01-consumers/110-health/20-look/hcpcarriers.cfm https://www.insurance.ca.gov/01-consumers/110-health/20-look...

pixl97 2y ago
> That sounds right for how long they're with an employer, but if I move companies I'm probably going with the same insurance carrier under the new company's plan. At least middle sized companies seem to change insurers commonly enough that both my wife and I have had our employers change said insurers in the middle of our employment.

abletonlive 2y ago

That's not really a key problem and not how insurance companies evaluate cost/benefit. We overall want a healthier population and if you think hard enough about it, you lose some subscribers and gain some subscribers so it's a win win for all health insurance companies. source: i'm in the health insurance industry

s1artibartfast 2y ago
My understanding is that insurance companies have fixed profit margins by law— essentially a cost plus model (just like California power companies). So Why don't health insurers wan't the least healthy and most expensive general population in the long run?
- nobody9999 2y ago
  >My understanding is that insurance companies have fixed profit margins by law Right. And (IIUC) those profits are set at 10% of revenue, not revenue - costs. That creates perverse incentives to increase premiums above all else.
  - vel0city 2y ago
    That's not accurate. The Medical Loss Ratio (MLR) created by the ACA is 80% of revenue collected must be spent paying benefits. So, 20% of revenue goes towards all operational expenses and profits. If they go over that ratio, they need to refund to policy holders.
    - s1artibartfast 2y ago
      So maximize medical costs and minimize opex for best returns. At least opex is in the calculation, California utilities don't even have that. It goes a long way to explaining why I pay 50c/kwh in sf (CA private) vs 15c in Sacramento (municipal) or Nevada (private without cost+)
    - nobody9999 2y ago
      I stand corrected. Thank you. I think my larger point, that jacking up premiums increases revenue, thus increasing the opex/profit pool (regardless of the percentages) is a perverse incentive to jack up premiums as much as possible As in a 3-5 year (which is about what I've seen with ACA premiums) doubling of premiums, thus doubling the potential profit pool without increasing opex in any way. In fact, the use of third parties to provide "pre-approval" for an increasing number of drugs, tests and procedures reduces opex, leaving more of that 20% for profits. In fact, my insurer has consistently raised premiums while squeezing providers who are now charging separate fees (meaning additional co-pays for me) for stuff that was once included in a single fee (one example is charging an "outpatient facilities fee" in addition to the copay for seeing a doctor. Increasing my costs, while the insurance company can just shrug and say, "that's not covered, suck it up!" Meanwhile, doctors (especially GPs) are over-scheduled (my GP is scheduled to see every patient in 20 minutes or less), allowing the practices to charge for seeing more patients -- increasing their profits -- at the expense of patient health. And heaven forfend having multiple related issues which require more than one specialty -- you're just shunted from specialist to specialist without much (if any) communication and a shrug if something unrelated to the specialist's area comes up. The point is that the whole industry is fraught with perverse incentives that drive up costs, reduce the quality of care and a laser focus on the wrong stuff (i.e., services provided vs. holistic health outcomes). It's disgusting and harms people. You'd think that by now we'd have decent healthcare. But the perverse incentives pushing toward financialization of, well, pretty much everything medically related, are actually impacting the average lifespans of Americans. And more's the pity.

darth_avocado 2y ago

On an average, the cost averages out.

HumblyTossed 2y ago

> It would help tremendously if the US changed the rules and made it so most people got insurance directly and not through their employer. This seriously needs to happen. Before we can have ANY other reform, this needs to happen.

deleted 2y ago

[deleted]

l1tany11 2y ago

I think decoupling health insurance from one’s employer could greatly change the entire healthcare industry. It would go a very long way to reduce cost obfuscation, among many other things. So many people think their health insurance costs $30 a month because that’s their “contribution”. Unfortunately it will never happen, as it’s insanely politically unviable as almost no one wants that to happen. It’s the ultimate free market approach, but then people would have to pay for something they “get for free”. And once they realized how insane the system is, and how much everything actually costs, you might see knock on effects from that. Some bad, some good. It would be an experiment for sure. Single payer is more realistic, even if it doesn’t do much to affect many of the underlying issues.