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I saw this debate a few weeks ago between two guys re what's the best way to improve the current healthcare cost.[1] I think both positions were untenable, but

by maest 1y ago

I saw this debate a few weeks ago between two guys re what's the best way to improve the current healthcare cost.[1] I think both positions were untenable, but one interesting point that one guy made was that, while called "insurance", health insurance is structurally very different. If you buy flood insurance, you have very low expectations you will actually need it. It's a way to pool tail risk and spread it out over a larger population. Healthcare insurance, however, pays for all your medical costs, many of which you can reasonably expect to have to pay. So you're no longer socialising risk. You're not even socialising cost really, sonce plans have many carevouts, exceptions, copays, limits etc. So a more efficient system would be one where you selfpay for regular procedures and have insurance for rare, life altering conditions. [1] - https://www.thesohoforum.org/upcoming-events/2025/7/16/jacob-hacker-vs-david-goldhill https://www.thesohoforum.org/upcoming-events/2025/7/16/jacob...

nothercastle 1y ago
What we call insurance is more like a Costco club membership where members get better rates
b112 1y ago
That might be more efficient. But to be clear, you are socializing risk though. You're just doing it a different way, by genetics and age. Your monthly payment (and what your employer kicks in) are for all those day to day costs. And of course there's the deductible. But people in their 40s to 50s often don't have young kids. Meanwhile, people in their 80s to 60s have more health risks. So what happens elsewhere is that everyone throws money into the same pot for their entire lives, and your costs are averaged as per above. It's why a single insurer, the government, is perfect for this. And it works for rare conditions that might happen to some during their lives, and not all too. And typically, for thousands of years, we've had more young than old. So while elderly people do have more issues late in life, they've paid into the system the whole time. And, now there are young people to pay just as they did. The only downside is when you end up with an age skewed population, such as is happening with the entire planet. It's affecting all health care systems, private or public. The US has this problem too, as medicare is being hit by spiraling costs. One thing I find really weird, is the need for-profit in the US system. Other systems have that too, sure, but not like the US. An example, the fire department isn't for profit. It'd be insane if so! Why would it be?! Yet, there is private sector work in the fire department, such as all the equipment bought from the private sector, chemical analysis done on debris post-suspicious-fire, and even training in some cases. Most health care systems around the world are like that. The insurance is public, not for profit. The hospitals too. Many parts of the system as well. But then some aspects are private.
- LocalH 1y ago
  > An example, the fire department isn't for profit. https://www.huffpost.com/entry/firefighting-in-the-1800s_b_247936 https://www.huffpost.com/entry/firefighting-in-the-1800s_b_2...
UncleMeat 1y ago
> So a more efficient system would be one where you selfpay for regular procedures and have insurance for rare, life altering conditions. This is sort of what a high deductible plan is, which were encouraged by the ACA. After premiums, my first ~$4,000 in medical expenses each year come out of my pocket. Then the next ~4,000 in medical expenses are shared between me and my insurance. Then the remainder is covered by my insurance. The difference is perhaps just what "rare, life altering conditions" means. For a lot of people the cost of medical care becomes untenable not at "oh god I need seven figures in surgeries" but instead "oh god that appendectomy is $50,000 before insurance" or even "oh god I don't have $10,000 to pay for that hospital visit."

by maest 1y ago

nothercastle 1y ago

What we call insurance is more like a Costco club membership where members get better rates

b112 1y ago

That might be more efficient. But to be clear, you are socializing risk though. You're just doing it a different way, by genetics and age. Your monthly payment (and what your employer kicks in) are for all those day to day costs. And of course there's the deductible. But people in their 40s to 50s often don't have young kids. Meanwhile, people in their 80s to 60s have more health risks. So what happens elsewhere is that everyone throws money into the same pot for their entire lives, and your costs are averaged as per above. It's why a single insurer, the government, is perfect for this. And it works for rare conditions that might happen to some during their lives, and not all too. And typically, for thousands of years, we've had more young than old. So while elderly people do have more issues late in life, they've paid into the system the whole time. And, now there are young people to pay just as they did. The only downside is when you end up with an age skewed population, such as is happening with the entire planet. It's affecting all health care systems, private or public. The US has this problem too, as medicare is being hit by spiraling costs. One thing I find really weird, is the need for-profit in the US system. Other systems have that too, sure, but not like the US. An example, the fire department isn't for profit. It'd be insane if so! Why would it be?! Yet, there is private sector work in the fire department, such as all the equipment bought from the private sector, chemical analysis done on debris post-suspicious-fire, and even training in some cases. Most health care systems around the world are like that. The insurance is public, not for profit. The hospitals too. Many parts of the system as well. But then some aspects are private.

LocalH 1y ago
> An example, the fire department isn't for profit. https://www.huffpost.com/entry/firefighting-in-the-1800s_b_247936 https://www.huffpost.com/entry/firefighting-in-the-1800s_b_2...

UncleMeat 1y ago

> So a more efficient system would be one where you selfpay for regular procedures and have insurance for rare, life altering conditions. This is sort of what a high deductible plan is, which were encouraged by the ACA. After premiums, my first ~$4,000 in medical expenses each year come out of my pocket. Then the next ~4,000 in medical expenses are shared between me and my insurance. Then the remainder is covered by my insurance. The difference is perhaps just what "rare, life altering conditions" means. For a lot of people the cost of medical care becomes untenable not at "oh god I need seven figures in surgeries" but instead "oh god that appendectomy is $50,000 before insurance" or even "oh god I don't have $10,000 to pay for that hospital visit."