4 ms·

It's really not that hard to do. There are huge portions of the population that hate police officers, athletes, teachers/professors, politicians, etc... I thin

It's really not that hard to do. There are huge portions of the population that hate police officers, athletes, teachers/professors, politicians, etc... I think their ability to seemingly not look inward is because they fundamentally believe that people aren't trying to even understand what they're doing. I'm sure the execs at health insurance companies feel like they are doing good work within the context of a for-profit business. The first thing to note is they acknowledge they are for-profit. And within that context they probably feel like they're trying to do the right thing against overzealous hospitals, doctors, fraud, and people don't sloppy work filing claims (even if not fraudulent). I just don't see how you can't do trade-offs in a for-profit where costs can be almost effectively unbounded. So I think in aggregate all of these things can convince themselves that they're doing the best they can and the market will help ensure they do a good job.

nradov 2y ago
Costs are bounded. The Affordable Care Act (Obamacare) imposed an 85% minimum medical loss ratio on most health plans. Many commercial health insurers are non-profit. That includes such large organizations as many of the Blue Cross Blue Shield Association licensees, HighMark, EmblemHealth, etc. Their coverage and claim processing policies are pretty similar to the for-profit companies.
- s1artibartfast 2y ago
  The way I read it is that costs are unbounded, not profits are unbounded. The health insurers are responsible for negotiating, checking and denying costs. If not them, you would have a state bureaucrat in charge of denying claims. Many will argue this is better, but it still isn't a blank check. As you point out, health insurance companies make money as a percentage of bills approved, not bills denied. The vast majority of Americans don't understand this. The completely different and more insidious problem is that this provides an incentive to approve claims, but drive their prices up, like any government regulated cost plus contractor. Cost Plus contracting only works when there is a competitive market and high transparency. Government laws tying healthcare to employers mean there is almost no competition, and healthcare costs are inherently opaque due to their complexity.
  - capybaraStorm 2y ago
    I mention this elsewhere but there is a hidden other incentive that is less obvious: which poor bastards to offload the remaining 15% from. There is no guarantees that is done evenly, and there is high moral hazard to do it strategically.
    - s1artibartfast 2y ago
      That is a very fair point. Healthcare usage is nowhere close to even or consistent. It is a diverse collection of non-fungible treatments and services. Denial, even when performed with crystal clear justification, will not land evenly on subscribers.
- kenjackson 2y ago
  > Many commercial health insurers are non-profit. That includes such large organizations as many of the Blue Cross Blue Shield Association licensees, HighMark, EmblemHealth, etc. Their coverage and claim processing policies are pretty similar to the for-profit companies. This may lend even more weight to them being able to sleep well at night -- their company behaves in a way consistent with notable non-profits, so you can't accuse them of profit mongering.

nradov 2y ago

Costs are bounded. The Affordable Care Act (Obamacare) imposed an 85% minimum medical loss ratio on most health plans. Many commercial health insurers are non-profit. That includes such large organizations as many of the Blue Cross Blue Shield Association licensees, HighMark, EmblemHealth, etc. Their coverage and claim processing policies are pretty similar to the for-profit companies.

s1artibartfast 2y ago
The way I read it is that costs are unbounded, not profits are unbounded. The health insurers are responsible for negotiating, checking and denying costs. If not them, you would have a state bureaucrat in charge of denying claims. Many will argue this is better, but it still isn't a blank check. As you point out, health insurance companies make money as a percentage of bills approved, not bills denied. The vast majority of Americans don't understand this. The completely different and more insidious problem is that this provides an incentive to approve claims, but drive their prices up, like any government regulated cost plus contractor. Cost Plus contracting only works when there is a competitive market and high transparency. Government laws tying healthcare to employers mean there is almost no competition, and healthcare costs are inherently opaque due to their complexity.
- capybaraStorm 2y ago
  I mention this elsewhere but there is a hidden other incentive that is less obvious: which poor bastards to offload the remaining 15% from. There is no guarantees that is done evenly, and there is high moral hazard to do it strategically.
  - s1artibartfast 2y ago
    That is a very fair point. Healthcare usage is nowhere close to even or consistent. It is a diverse collection of non-fungible treatments and services. Denial, even when performed with crystal clear justification, will not land evenly on subscribers.
kenjackson 2y ago
> Many commercial health insurers are non-profit. That includes such large organizations as many of the Blue Cross Blue Shield Association licensees, HighMark, EmblemHealth, etc. Their coverage and claim processing policies are pretty similar to the for-profit companies. This may lend even more weight to them being able to sleep well at night -- their company behaves in a way consistent with notable non-profits, so you can't accuse them of profit mongering.