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The conversion factors for private insurance are 2–3x those of Medicare. There's plenty of room to lower costs. Either private insurance companies aren't inte

The conversion factors for private insurance are 2–3x those of Medicare. There's plenty of room to lower costs. Either private insurance companies aren't interested in lowering costs or their claims process is so arduous that providers demand higher rates to deal with the high rate of denials and ever changing minutiae. Providers are not the problem here.

derektank 2y ago
Pharmaceutical companies and hospitals both have much higher profit margins than insurance companies and represent a much larger share of the total cost of healthcare than insurance companies so while I don't think they're the entire problem, they are at least part of it. You and another commenter make a good point regarding inefficiencies in claims processing but I'd be curious to know how substantial that is relative to the entire cost of care.
- inferiorhuman 2y ago
  much higher profit margins That is an entirely worthless metric. Pharma and for-profit hospitals benefit from the insurance companies' perverse incentives to keep costs high. Higher cost for care means that the insurance companies can jack up the premiums to maintain their legally allowable margin. A 20% slice of a bigger pie is a larger amount than a 20% slice of a smaller pie after all. Even better, insurance companies can wag their fingers at the doctors and all of Ayn's acolytes will chime in about how for-profit care is here to save humanity from the evils of doctors. All the while the for-profit insurance companies are laughing to the bank because they're disincentivized from negotiating more reasonable prices. There's a reason Medicare pays conversion factors that are about a third to a half of what for-profit insurance companies are willing to pay. Even better, insurance companies have a captive audience. While the federal mandate to redirect your money to for-profit insurance was struck down, five states (and DC) have their own individual mandates.
thayne 2y ago
> Either private insurance companies aren't interested in lowering costs They aren't. Since their profits are capped at 20%, reducing costs means reducing profit as well, so they are actually incentivised to keep costs high. > their claims process is so arduous that providers demand higher rates to deal with the high rate of denials and ever changing minutiae. I think this is also the case

derektank 2y ago

Pharmaceutical companies and hospitals both have much higher profit margins than insurance companies and represent a much larger share of the total cost of healthcare than insurance companies so while I don't think they're the entire problem, they are at least part of it. You and another commenter make a good point regarding inefficiencies in claims processing but I'd be curious to know how substantial that is relative to the entire cost of care.

inferiorhuman 2y ago
much higher profit margins That is an entirely worthless metric. Pharma and for-profit hospitals benefit from the insurance companies' perverse incentives to keep costs high. Higher cost for care means that the insurance companies can jack up the premiums to maintain their legally allowable margin. A 20% slice of a bigger pie is a larger amount than a 20% slice of a smaller pie after all. Even better, insurance companies can wag their fingers at the doctors and all of Ayn's acolytes will chime in about how for-profit care is here to save humanity from the evils of doctors. All the while the for-profit insurance companies are laughing to the bank because they're disincentivized from negotiating more reasonable prices. There's a reason Medicare pays conversion factors that are about a third to a half of what for-profit insurance companies are willing to pay. Even better, insurance companies have a captive audience. While the federal mandate to redirect your money to for-profit insurance was struck down, five states (and DC) have their own individual mandates.

thayne 2y ago

> Either private insurance companies aren't interested in lowering costs They aren't. Since their profits are capped at 20%, reducing costs means reducing profit as well, so they are actually incentivised to keep costs high. > their claims process is so arduous that providers demand higher rates to deal with the high rate of denials and ever changing minutiae. I think this is also the case