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The big problem with health insurance is that it accounts for 17% of the US GDP, so although it's parasitic for everyone involved, it's basically indispensable

The big problem with health insurance is that it accounts for 17% of the US GDP, so although it's parasitic for everyone involved, it's basically indispensable to the economy. That's a big reason why the Affordable Care Act panned out the way it did, as a partnership with the insurance companies.

jfengel 2y ago
Under the ACA, 20% of that is overhead for the insurers. So you could boost the economy by 20% x 17% = a full year's GDP growth for free.
EA-3167 2y ago
It's a closed circle, Tax money comes in, Insurance companies suck it up with a straw. That same economic activity could still occur with that money, it would just be in other sectors, and ideally ones that produce real economic value.
Jcampuzano2 2y ago
If for-profit health insurance is really almost 1/5th of US GDP, something is entirely wrong. Then again, maybe it makes sense the country that perpetuates suffering all over the globe through being global police and lately just fucking up any sense of stability is the same one where almost 1/5th of our "output" is built on top of making money off of prolonging our own peoples pain and suffering.
knome 2y ago
>it accounts for 17% of the US GDP, so although it's parasitic for everyone involved, it's basically indispensable to the economy if people weren't forced to spend it on healthcare, they would spend it elsewhere. if healthcare was free tomorrow, the GDP would be fine, just redistributed.
- wahnfrieden 2y ago
  They would also be healthier to contribute other economically productive labor and organization. When people get sick or die they stop working.
  - jimt1234 2y ago
    And more than half of my 50s-year-old friends would be able to retire from jobs where they do the bare minimum just to maintain their health insurance.
    - p3rls 2y ago
      Won't someone think of the 50-year-old office workers?
      - deleted 2y ago
        [deleted]
- burnte 2y ago
  Yeah, going single payer alone could reduce that 17% to 13%, maybe more, just through eliminating all the barriers insurers put up to providers being paid and administrative overhead.
  - gruez 2y ago
    Source? A study from KFF puts "administration" responsible for only 12% of the increase the US pays over comparable countries, or less than 1 percentage points. [1] https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/#Healthcare%20spending%20per%20capita,%20by%20spending%20category,%202021 https://www.healthsystemtracker.org/brief/what-drives-health...
    - istjohn 2y ago
      > Administrative costs include spending on running governmental health programs and overhead from insurers, but exclude administrative expenditures from healthcare providers. From what I've read, healthcare providers spend an inordinant amount of time and effort dealing with insurance companies.
      - rickydroll 2y ago
        Don't forget the overhead created by PBMs and when insurance companies also own the PBM and the drugstore
      - burnte 2y ago
        Correct, it's cost both for insurers AND provider organizations. We have an entire team of humans who call insurance companies on the telephone to verify insurance benefits because most insurers make it EXTREMELY difficult to determine benefits in an automated manner because that makes it easier to bill them. They do everything they can to make it difficult for patients to get coverage and for providers to collect. We're actually working with an AI company to build a tool that uses AI and lots of data to predict with better accuracy benefit coverage. All because insurers want barriers to treatment to lower their costs.
- darth_avocado 2y ago
  Also, if people get the medical attention they need on time, they’d be more productive and also be more active in the economy. The loss of productivity coming from inadequate healthcare because of insurance coverages is in the order of tens of Billions annually.
  - gruez 2y ago
    >Also, if people get the medical attention they need on time Unclear whether that would bear fruit, given how socialized healthcare systems have a bad reputation of long wait times.
    - semi-extrinsic 2y ago
      I think this is an incorrect impression caused by cherry-picking data. E.g. in the dataset linked below, while some European countries have longer waiting times for elective surgery, they have between 2x and 10x shorter waiting times than the US when it comes to seeing a primary physician. Which is arguably one of the most important metrics for getting people medical attention on time. Furthermore, in many non-US countries you have "controversial" things like emergency contraceptives being prescription free, so people don't even need to see a doctor in the first place. Imagine how much more efficient that is. https://www.statista.com/chart/33079/average-waiting-times-for-a-doctors-appointment/ https://www.statista.com/chart/33079/average-waiting-times-f...
      - mike_hearn 2y ago
        That page says the lowest waiting times for surgeries are the USA and Switzerland, which has a mostly private healthcare system and private health insurance. It also claims waiting times for a GP are only ten days on average in the UK which doesn't sound right given the difficulty people have even getting an appointment booked at all lately. I wonder how they compute these numbers.
    - darth_avocado 2y ago
      One thing I don’t like about discourse around healthcare is that we automatically talk about socialized healthcare systems being bad. Asking for more transparency and accountability in insurance companies is not unreasonable. You pay thousands of dollars every year to these conpanies only to have your medical procedure delayed because the insurance doesn’t think it’s necessary. If you can’t set up a system that requires insurance to fulfill their duty, make health insurance non mandatory and set up a public system with more accountability. Right now these companies want to have their cake and eat it too.
gruez 2y ago
>The big problem with health insurance is that it accounts for 17% of the US GDP Healthcare overall, not insurance. Insurance is just how most of it gets paid. Conflating the two is like saying credit card companies account for 50% (or whatever) of the US GDP because that's how most people pay for their stuff.
- jimt1234 2y ago
  Good point. However, it's almost impossible not to conflate the two (healthcare overall and health insurance) because, unfortunately, health insurance is pretty much required for healthcare. The credit card companies would be a good measure of GDP if they were required for every purchase.
  - marbro 2y ago
    Only fools pay for healthcare with insurance. If a doctor can't convince you to pay directly, don't use his services. Find a better doctor and pay for it yourself.
n2d4 2y ago
That's not how the economy works though — the GDP is correlated, not causated, with economic strength. What drives the economy in the end is positive-sum value creation, not trade in itself (although without any market failures, trade tends to create value). The only reason we use GDP as a measure is because actual subjective value created is very hard to measure. If I start an extortion business, and make you pay me money in order for me to not kidnap your family, this will increase the GDP but not economic strength. This is particularly obvious during wartime, when GDP is artificially inflated, but the actual economy tends to be doing very badly regardless. In other words, a trade that harms one party more than it helps the other makes the economy worse — regardless of how it affects GDP.
- orwin 2y ago
  But fiscal and debt policies are built on GDP as primary indicator. That is why recently, some states/nations privileged GDP growth over economic wellbeing (gambling is such any easy example)
  - rented_mule 2y ago
    Goodhart's law strikes again. It's one of those things that explains so many problems in the world once you understand it. I wish there were ways around it, but I think it's a natural thing in matters involving a lot of people.
brightball 2y ago
There was a way to solve it in a much more economically effective fashion with the Dr. Ben Carson plan. It was (and still is) the only feasible way to fix things long term.
outside1234 2y ago
So what you are saying is we could get a dividend by getting rid of these parasites of 8%, since Norway spends 9% of GDP on healthcare. Sounds great to me!
mvdtnz 2y ago
https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window
diob 2y ago
This seems similar to the broken window fallacy.

jfengel 2y ago

Under the ACA, 20% of that is overhead for the insurers. So you could boost the economy by 20% x 17% = a full year's GDP growth for free.

EA-3167 2y ago

It's a closed circle, Tax money comes in, Insurance companies suck it up with a straw. That same economic activity could still occur with that money, it would just be in other sectors, and ideally ones that produce real economic value.

Jcampuzano2 2y ago

If for-profit health insurance is really almost 1/5th of US GDP, something is entirely wrong. Then again, maybe it makes sense the country that perpetuates suffering all over the globe through being global police and lately just fucking up any sense of stability is the same one where almost 1/5th of our "output" is built on top of making money off of prolonging our own peoples pain and suffering.

knome 2y ago

>it accounts for 17% of the US GDP, so although it's parasitic for everyone involved, it's basically indispensable to the economy if people weren't forced to spend it on healthcare, they would spend it elsewhere. if healthcare was free tomorrow, the GDP would be fine, just redistributed.

wahnfrieden 2y ago
They would also be healthier to contribute other economically productive labor and organization. When people get sick or die they stop working.
- jimt1234 2y ago
  And more than half of my 50s-year-old friends would be able to retire from jobs where they do the bare minimum just to maintain their health insurance.
  - p3rls 2y ago
    Won't someone think of the 50-year-old office workers?
    - deleted 2y ago
      [deleted]
burnte 2y ago
Yeah, going single payer alone could reduce that 17% to 13%, maybe more, just through eliminating all the barriers insurers put up to providers being paid and administrative overhead.
- gruez 2y ago
  Source? A study from KFF puts "administration" responsible for only 12% of the increase the US pays over comparable countries, or less than 1 percentage points. [1] https://www.healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/#Healthcare%20spending%20per%20capita,%20by%20spending%20category,%202021 https://www.healthsystemtracker.org/brief/what-drives-health...
  - istjohn 2y ago
    > Administrative costs include spending on running governmental health programs and overhead from insurers, but exclude administrative expenditures from healthcare providers. From what I've read, healthcare providers spend an inordinant amount of time and effort dealing with insurance companies.
    - rickydroll 2y ago
      Don't forget the overhead created by PBMs and when insurance companies also own the PBM and the drugstore
    - burnte 2y ago
      Correct, it's cost both for insurers AND provider organizations. We have an entire team of humans who call insurance companies on the telephone to verify insurance benefits because most insurers make it EXTREMELY difficult to determine benefits in an automated manner because that makes it easier to bill them. They do everything they can to make it difficult for patients to get coverage and for providers to collect. We're actually working with an AI company to build a tool that uses AI and lots of data to predict with better accuracy benefit coverage. All because insurers want barriers to treatment to lower their costs.
darth_avocado 2y ago
Also, if people get the medical attention they need on time, they’d be more productive and also be more active in the economy. The loss of productivity coming from inadequate healthcare because of insurance coverages is in the order of tens of Billions annually.
- gruez 2y ago
  >Also, if people get the medical attention they need on time Unclear whether that would bear fruit, given how socialized healthcare systems have a bad reputation of long wait times.
  - semi-extrinsic 2y ago
    I think this is an incorrect impression caused by cherry-picking data. E.g. in the dataset linked below, while some European countries have longer waiting times for elective surgery, they have between 2x and 10x shorter waiting times than the US when it comes to seeing a primary physician. Which is arguably one of the most important metrics for getting people medical attention on time. Furthermore, in many non-US countries you have "controversial" things like emergency contraceptives being prescription free, so people don't even need to see a doctor in the first place. Imagine how much more efficient that is. https://www.statista.com/chart/33079/average-waiting-times-for-a-doctors-appointment/ https://www.statista.com/chart/33079/average-waiting-times-f...
    - mike_hearn 2y ago
      That page says the lowest waiting times for surgeries are the USA and Switzerland, which has a mostly private healthcare system and private health insurance. It also claims waiting times for a GP are only ten days on average in the UK which doesn't sound right given the difficulty people have even getting an appointment booked at all lately. I wonder how they compute these numbers.
  - darth_avocado 2y ago
    One thing I don’t like about discourse around healthcare is that we automatically talk about socialized healthcare systems being bad. Asking for more transparency and accountability in insurance companies is not unreasonable. You pay thousands of dollars every year to these conpanies only to have your medical procedure delayed because the insurance doesn’t think it’s necessary. If you can’t set up a system that requires insurance to fulfill their duty, make health insurance non mandatory and set up a public system with more accountability. Right now these companies want to have their cake and eat it too.

gruez 2y ago

>The big problem with health insurance is that it accounts for 17% of the US GDP Healthcare overall, not insurance. Insurance is just how most of it gets paid. Conflating the two is like saying credit card companies account for 50% (or whatever) of the US GDP because that's how most people pay for their stuff.

jimt1234 2y ago
Good point. However, it's almost impossible not to conflate the two (healthcare overall and health insurance) because, unfortunately, health insurance is pretty much required for healthcare. The credit card companies would be a good measure of GDP if they were required for every purchase.
- marbro 2y ago
  Only fools pay for healthcare with insurance. If a doctor can't convince you to pay directly, don't use his services. Find a better doctor and pay for it yourself.

n2d4 2y ago

That's not how the economy works though — the GDP is correlated, not causated, with economic strength. What drives the economy in the end is positive-sum value creation, not trade in itself (although without any market failures, trade tends to create value). The only reason we use GDP as a measure is because actual subjective value created is very hard to measure. If I start an extortion business, and make you pay me money in order for me to not kidnap your family, this will increase the GDP but not economic strength. This is particularly obvious during wartime, when GDP is artificially inflated, but the actual economy tends to be doing very badly regardless. In other words, a trade that harms one party more than it helps the other makes the economy worse — regardless of how it affects GDP.

orwin 2y ago
But fiscal and debt policies are built on GDP as primary indicator. That is why recently, some states/nations privileged GDP growth over economic wellbeing (gambling is such any easy example)
- rented_mule 2y ago
  Goodhart's law strikes again. It's one of those things that explains so many problems in the world once you understand it. I wish there were ways around it, but I think it's a natural thing in matters involving a lot of people.

brightball 2y ago

There was a way to solve it in a much more economically effective fashion with the Dr. Ben Carson plan. It was (and still is) the only feasible way to fix things long term.

outside1234 2y ago

So what you are saying is we could get a dividend by getting rid of these parasites of 8%, since Norway spends 9% of GDP on healthcare. Sounds great to me!

mvdtnz 2y ago

https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window

diob 2y ago

This seems similar to the broken window fallacy.