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And that is one of the reasons why medical insurance is so crazy in the United States nowadays - it’s no longer used to hedge catastrophic unpredictable events

by efitz 2y ago

And that is one of the reasons why medical insurance is so crazy in the United States nowadays - it’s no longer used to hedge catastrophic unpredictable events (which used to be called “major medical”), but instead is used to pay for normal, minor consumption or for chronic conditions. In other words it’s no longer like a bet, it’s like a discount plan. But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up.

scott_w 2y ago
> But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up. The first part is correct but a consumer that “doesn't self regulate consumption” is not a thing in medicine. People don’t take drugs for fun. People don’t injure themselves more in public healthcare systems. In fact, a huge problem in medicine is getting men to go to the doctor before issues become critical (and more expensive).
- mcculley 2y ago
  People eating more than they should, getting diabetes, and then consuming more medical services is a form of poor regulation of consumption. The overapplication of OxyContin is another form of unregulated consumption. Now we have the semaglutides and will see the same effect.
  - scott_w 2y ago
    The USA has a 38% obesity rate vs the UK at 29% (for men). Given both exist quite far apart on the public/private healthcare debate, I don’t see how this supports your argument at all. Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7670332/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7670332/ I’m not going to debate the others because I don’t know much about them and, since your argument fell apart at light prodding, I don’t think you do, either.
    - mcculley 2y ago
      I was not making an argument about the public/private healthcare debate. I am objecting to the assertions 'a consumer that “doesn't self regulate consumption” is not a thing in medicine' and 'People don’t take drugs for fun.' I was similarly convinced that moral hazard in healthcare was not a problem because consumers don't get more healthcare than they need. I know now that this is not the case.
      - scott_w 2y ago
        I’m not making a public/private argument either. The full sentence was: > But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up. Obviously, people do eat to excess, engage in activities that have risk (and die as a result). Whether you pay or someone else pays does not factor in these decisions, which is why I pointed to obesity rates in UK/USA to demonstrate this. If such moral hazard existed, you’d see lower obesity in the USA than in the UK. You don’t, ergo, it mustn’t. EDIT: By “take drugs for fun” I’m specifically referring to medical drugs in my original message so removed it from this one (where I conflated with recreational drugs).
        mcculley 2y ago
        OxyContin is a medical drug. I have unfortunately had to assist my mother with visits to the "pain clinic" and seen firsthand many patients with a problem with self regulation of consumption. Maybe I am interpreting your assertions too literally.
        scott_w 2y ago
        Ok but I’m guessing you’re in the USA where you’d have to pay significant sums for that in some form, as long as you can convince a doctor to sign off. I’m not aware of a similar problem in England, where prescriptions are currently £9.90 per prescription. This is my point: the financial cost, as with obesity, is not regulating the behaviour.
abenga 2y ago
And that is why the insurance model should not be used for healthcare. For example, why should an insurance company charge you anything less than the cost of treating a chronic illness after diagnosis? Why should the minimum price of giving birth not be the exact premium you pay? None of those are surprises (after the initial diagnosis or conception, of course, and it can obviously be argued that birthing complications can be insured against too), so there is no reason to use probabilistic models to pay for them.
bruce343434 2y ago
The problem is price fixing deals between hospitals and insurers, where the insurer pays only a tiny fraction of the retail price. It's not economically viable for consumers to not have the "discount plan" as you aptly put it. That benefits the insurance company so they like it like that.

by efitz 2y ago

scott_w 2y ago

> But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up. The first part is correct but a consumer that “doesn't self regulate consumption” is not a thing in medicine. People don’t take drugs for fun. People don’t injure themselves more in public healthcare systems. In fact, a huge problem in medicine is getting men to go to the doctor before issues become critical (and more expensive).

mcculley 2y ago
People eating more than they should, getting diabetes, and then consuming more medical services is a form of poor regulation of consumption. The overapplication of OxyContin is another form of unregulated consumption. Now we have the semaglutides and will see the same effect.
- scott_w 2y ago
  The USA has a 38% obesity rate vs the UK at 29% (for men). Given both exist quite far apart on the public/private healthcare debate, I don’t see how this supports your argument at all. Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7670332/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7670332/ I’m not going to debate the others because I don’t know much about them and, since your argument fell apart at light prodding, I don’t think you do, either.
  - mcculley 2y ago
    I was not making an argument about the public/private healthcare debate. I am objecting to the assertions 'a consumer that “doesn't self regulate consumption” is not a thing in medicine' and 'People don’t take drugs for fun.' I was similarly convinced that moral hazard in healthcare was not a problem because consumers don't get more healthcare than they need. I know now that this is not the case.
    - scott_w 2y ago
      I’m not making a public/private argument either. The full sentence was: > But the problem is that the complexity of introducing a third party payer who doesn’t want to pay, and a consumer who has no incentive to self regulate consumption, means that the costs spiral up and up. Obviously, people do eat to excess, engage in activities that have risk (and die as a result). Whether you pay or someone else pays does not factor in these decisions, which is why I pointed to obesity rates in UK/USA to demonstrate this. If such moral hazard existed, you’d see lower obesity in the USA than in the UK. You don’t, ergo, it mustn’t. EDIT: By “take drugs for fun” I’m specifically referring to medical drugs in my original message so removed it from this one (where I conflated with recreational drugs).
      - mcculley 2y ago
        OxyContin is a medical drug. I have unfortunately had to assist my mother with visits to the "pain clinic" and seen firsthand many patients with a problem with self regulation of consumption. Maybe I am interpreting your assertions too literally.
        scott_w 2y ago
        Ok but I’m guessing you’re in the USA where you’d have to pay significant sums for that in some form, as long as you can convince a doctor to sign off. I’m not aware of a similar problem in England, where prescriptions are currently £9.90 per prescription. This is my point: the financial cost, as with obesity, is not regulating the behaviour.

abenga 2y ago

And that is why the insurance model should not be used for healthcare. For example, why should an insurance company charge you anything less than the cost of treating a chronic illness after diagnosis? Why should the minimum price of giving birth not be the exact premium you pay? None of those are surprises (after the initial diagnosis or conception, of course, and it can obviously be argued that birthing complications can be insured against too), so there is no reason to use probabilistic models to pay for them.

bruce343434 2y ago

The problem is price fixing deals between hospitals and insurers, where the insurer pays only a tiny fraction of the retail price. It's not economically viable for consumers to not have the "discount plan" as you aptly put it. That benefits the insurance company so they like it like that.