6 ms·

For-profit healthcare is the problem, not (just) private equity

39 points by Refreeze5224 11mo ago

bko 11mo ago
[flagged]
- getnormality 11mo ago
  I have slowly been coming around to an understanding that healthcare really is different due to the uniquely massive information asymmetries of doctors versus patients (and payors and everyone else), plus irremediable difficulties with market search or "comparison shopping". I appreciate that it may be bad to mix profit incentive into an industry that simply cannot operate as a real market. (That said, problems don't all evaporate the moment you take out profit incentive, and you probably introduce new problems as a side effect.) These radical critiques that basically say "putting a monetary value on things that matter is fundamentally wrong" have made my progress much slower. I'm not here to hate on markets! They work great (and much better than collectivist alternatives) for a lot of things that we value greatly, like being able to feed ourselves. Selective sentimentality about the value of human life and human needs doesn't bring anything to this conversation. We all care about human life and children and agree that they can't be bought and sold. But when you're asking someone to do something for someone else, you have to compensate them, and you have to compensate them enough for it to be worth their while given their alternatives. So you have to put an economically-driven monetary value on it in some way or other. There are no perfect benevolent angels we can call down from the heavens to be our doctors.
  - bko 11mo ago
    I think comparison shopping works great, even with health related things. When you pay out of pocket, like for Lasik or cosmetic surgery, it works. And most medical expenses are non-emergency. There exists asymmetry in all markets. I don't know anything about cars, but I take it to a mechanic. I get a quote, and ask around and eventually some mutually beneficial trade happens. The market aspects of healthcare work well but so much of it is not a market and the third party payer system. Try asking a doctor what somethings costs, they will look at you like you have two heads. They have no clue. The fact is healthcare today is not a market, not even close. Things that are a market generally work well (supermarkets, mechanics, cosmetic surgery). We should have healthcare become more of a market. As just one example a healthcare provider cannot open up in many states without a "certificate of need" > Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities. In a state with a CON program, a health planning agency or other entity must approve the creation of new health care facilities or the expansion of an existing facility’s services in a specified area. CON programs primarily aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. Imagine to open a restaurant you would need to go to some board and argue how your restaurant is needed in this neighborhood, or the idea that opening a restaurant would INCREASE restaurant prices by offering duplicative services. Madness! https://www.ncsl.org/health/certificate-of-need-state-laws https://www.ncsl.org/health/certificate-of-need-state-laws
    - ebiester 11mo ago
      It's much harder on many surgeries. They come in with "it depends" and completely avoid discussing it. The doctors often do not even know, and those who know will refuse to discuss. On top of that, consultations are not free and often expensive. And something like cancer treatment is nigh impossible to get a quote on. They obfuscate the costs even when required to post them - see https://www.healthcaredive.com/news/hospital-price-transparency-continues-drop-patient-rights-advocate/733703/ https://www.healthcaredive.com/news/hospital-price-transpare... as but one example. There is an entire industry built around reading hospital bills and watching for double charges. https://www.tomshardware.com/tech-industry/artificial-intelligence/grieving-family-uses-ai-chatbot-to-cut-hospital-bill-from-usd195-000-to-usd33-000-family-says-claude-highlighted-duplicative-charges-improper-coding-and-other-violations https://www.tomshardware.com/tech-industry/artificial-intell... was discussed earlier on HN.
    - FireBeyond 11mo ago
      > Imagine to open a restaurant you would need to go to some board and argue how your restaurant is needed in this neighborhood, or the idea that opening a restaurant would INCREASE restaurant prices by offering duplicative services. Madness! And the board goes to the other restaurants and asks them, "hey, if this new restaurant opened, would you reduce your business?" > Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities ... and any time someone likes to defend them, I like to point out that CoNs were an invention of hospital owner lobby groups, and that those hospital owners pushed for them.
    - nradov 11mo ago
      Cost transparency and comparison shopping have gotten a bit better in recent years. Health plans are now required to give members access to cost estimation tools. If you need an expensive procedure like an MRI then it's worth shopping around. https://www.cms.gov/priorities/healthplan-price-transparency/overview/consumers https://www.cms.gov/priorities/healthplan-price-transparency... For patients without health insurance they have the legal right to insist on a good faith estimate. https://www.cms.gov/medical-bill-rights/help/guides/good-faith-estimate https://www.cms.gov/medical-bill-rights/help/guides/good-fai... There are still some technical obstacles to giving patients with insurance accurate estimates for out-of-pocket costs. The current HIPAA adopted standards for most electronic claims don't allow for prospective claims to see exactly how much a health plan would pay for a treatment. CMS is working on a proposal to adopt a newer version of those standards which will support prospective claims. https://www.cms.gov/priorities/key-initiatives/burden-reduction/administrative-simplification/hipaa/adopted-standards-operating-rules https://www.cms.gov/priorities/key-initiatives/burden-reduct...
- Refreeze5224 11mo ago
  Feel free to argue against what he's saying instead of his tone. If you think he's wrong, which he isn't, feel free to ague that point instead of pretend that healthcare being for profit isn't incredibly harmful, and that the US is not laps behind every other developed nation.
  - bko 11mo ago
    Sure, it's pretty easy to argue. The profit margin on health care providers is not that high. The median hospital operating margin in the US is 7%, despite 37% of hospitals operating in the red. Even if you assume profit is completely useless in organizing activity and investment, removing profit would save at most ~7% expenses and that wouldn't be that transformational. So it's not profit motive that leads to high healthcare costs in the US https://www.advisory.com/topics/margin-management/health-system-margin-performance-benchmarks https://www.advisory.com/topics/margin-management/health-sys...
    - Refreeze5224 11mo ago
      The entire point of the article is that patients become customers, with an attendant reduction in care. When you treat people attempting to save their own lives as simply sources of profit, you subject them to all the other gross and manipulative sales/profit maximization strategies that capitalists use. It's not just that the costs are higher, it's about a loss of human dignity. Fundamentally it's a moral question, not an economic one. Should people's health and actual lives be treated as simply a way to generate profit? Answering anything other than no is a relatively new development in societies, and is flat out wrong.
      - bko 11mo ago
        So we shouldn't allow people to "profit" off saving our lives? Maybe we should ban for profit surgeons. Seems unfair, morally, that someone is profiting and living in a nice house and has a nice car from saving my life.
        11mo ago
- sharts 11mo ago
  Isn’t capitalism and free-market thinking also vibes? Most economics is irrational, but assumes rational. Therefore even most economic analysis is silly.
mindslight 11mo ago
The problem I have with this line of thinking is that food is also pretty necessary for human survival, yet we've got a vibrant for-profit market that provides it, plus government subsidies to provide for those who cannot afford it (constantly creeping anticompetitive schemes, and autocratic fascists' attempts to withhold said subsidies, notwithstanding) Boiling down the problems with healthcare being "for-profit" is like blaming an infection on the bacteria and calling it a day. In reality the bacteria have only been allowed to fester due to deeper problems. I'd say the real problem is this industry has used regulations, both government and shared corporate "policy", to except themselves from most standard forms of accountability and market (aka patient) responsiveness. What other industry cannot tell you how much something costs ahead of time, and operates by sending you an arbitrary bill after the fact that is still fraudulent with amounts of 3-4x the actual prices? What other industry prevents new competitors from opening without a "certificate of need" ? What other industry is allowed to negotiate amongst itself to blatantly fix prices ? What other industry has had a lauded attempt at reform that included making patronizing that industry mandatory ?! This certainly isn't a call to blindly "eliminate regulations", as history has shown that kind of thing mostly eliminates remaining checks while not going anywhere near the regulations that actually need reform (which are a lot of entrenched industry wide "business practices" at this point). But rather these are the terms we need to be thinking in rather than knee jerk blaming "profit".
- germinalphrase 11mo ago
  The first strong move toward any system better than the status quo is universal price transparency.
- saulpw 11mo ago
  You can grow your own food. You can't perform your own cataract surgery and you can't make your own vaccines. As to your analogy, yes, the root cause of the infection is bacteria. Yes, there are supporting factors, like the open wound that allowed the bacteria in, or a weakened immune system that allowed it to flourish. But when you're treating an infection that's already out of control, you focus on eradicating the bacteria. You also clean the wound and boost the immune system if possible, but those are secondary measures. In the case of healthcare, "for-profit" is the root cause. There will still be corruption and capture and psycho nurses, but those are wounds that can be fixed or suffered one at a time. Whereas the for-profit aspect of healthcare is a metastasized cancer that no amount of surgery can cure. We might need all kinds of treatments but we have to address the root cause as well.
derelicta 11mo ago
Commodity production is. All of it.
dirtikiti 11mo ago
No, government subsidies to for-profit healthcare is the problem. As with every other subsidized sector, they balloon the price when there is an unlimited supply of funding to pay for it. As opposed to a consumer focused sector where the prices are dictated by what the consumer can afford.
- MangoToupe 11mo ago
  Why not both? Combining profit and health care creates a literal death cult.
- voxl 11mo ago
  This is ridiculous. A consumer doesn't want to die. Life saving "medical products" can be too expensive even with completely honest and well intentioned pricing. The whole point of the system is good people want to pool resources to enable purchasing these "medical products" to save lives. Pooling resources is subsidizing others, government or otherwise. Removing that is an impossibility.
lisbbb 11mo ago
Having worked at UNH and also having them and later UMR (owned by UNH) and now being insured by a non-public company, I can tell you the difference is huge. UNH is for profit through and through, quarterly reports are all that matter, and squeezing subscribers and providers is the result. It's disgusting and I'm pretty embarrassed to have worked for them at all because I was with a different company that was privately held and while their ethics were compromised, too, it was nothing at all like what I saw at UNH. There's no reason to have for profit, publicly traded health insurers, it doesn't need to be a thing.
nradov 11mo ago
This type of article allows people to indulge in righteous indignation and feel morally superior to the dirty capitalists — but it largely misses the point. The excessive spending in our healthcare system is mostly for treating chronic conditions caused by lifestyle issues: substance abuse, over eating, lack of exercise, junk food, lack of sleep, etc. Taking profits out of the system won't solve that fundamental problem. Other countries with socialized healthcare systems are perhaps more efficient and cost effective but they're facing similar systemic problems as their populations age, just on a longer time horizon.
- maxerickson 11mo ago
  We can probably take costs out too. Crazy that it costs $1500 to go to a sleepy ER and get 20 minutes of attention from a PA. And then the hospital bills you.

39 points by Refreeze5224 11mo ago

bko 11mo ago

[flagged]

getnormality 11mo ago
I have slowly been coming around to an understanding that healthcare really is different due to the uniquely massive information asymmetries of doctors versus patients (and payors and everyone else), plus irremediable difficulties with market search or "comparison shopping". I appreciate that it may be bad to mix profit incentive into an industry that simply cannot operate as a real market. (That said, problems don't all evaporate the moment you take out profit incentive, and you probably introduce new problems as a side effect.) These radical critiques that basically say "putting a monetary value on things that matter is fundamentally wrong" have made my progress much slower. I'm not here to hate on markets! They work great (and much better than collectivist alternatives) for a lot of things that we value greatly, like being able to feed ourselves. Selective sentimentality about the value of human life and human needs doesn't bring anything to this conversation. We all care about human life and children and agree that they can't be bought and sold. But when you're asking someone to do something for someone else, you have to compensate them, and you have to compensate them enough for it to be worth their while given their alternatives. So you have to put an economically-driven monetary value on it in some way or other. There are no perfect benevolent angels we can call down from the heavens to be our doctors.
- bko 11mo ago
  I think comparison shopping works great, even with health related things. When you pay out of pocket, like for Lasik or cosmetic surgery, it works. And most medical expenses are non-emergency. There exists asymmetry in all markets. I don't know anything about cars, but I take it to a mechanic. I get a quote, and ask around and eventually some mutually beneficial trade happens. The market aspects of healthcare work well but so much of it is not a market and the third party payer system. Try asking a doctor what somethings costs, they will look at you like you have two heads. They have no clue. The fact is healthcare today is not a market, not even close. Things that are a market generally work well (supermarkets, mechanics, cosmetic surgery). We should have healthcare become more of a market. As just one example a healthcare provider cannot open up in many states without a "certificate of need" > Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities. In a state with a CON program, a health planning agency or other entity must approve the creation of new health care facilities or the expansion of an existing facility’s services in a specified area. CON programs primarily aim to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. Imagine to open a restaurant you would need to go to some board and argue how your restaurant is needed in this neighborhood, or the idea that opening a restaurant would INCREASE restaurant prices by offering duplicative services. Madness! https://www.ncsl.org/health/certificate-of-need-state-laws https://www.ncsl.org/health/certificate-of-need-state-laws
  - ebiester 11mo ago
    It's much harder on many surgeries. They come in with "it depends" and completely avoid discussing it. The doctors often do not even know, and those who know will refuse to discuss. On top of that, consultations are not free and often expensive. And something like cancer treatment is nigh impossible to get a quote on. They obfuscate the costs even when required to post them - see https://www.healthcaredive.com/news/hospital-price-transparency-continues-drop-patient-rights-advocate/733703/ https://www.healthcaredive.com/news/hospital-price-transpare... as but one example. There is an entire industry built around reading hospital bills and watching for double charges. https://www.tomshardware.com/tech-industry/artificial-intelligence/grieving-family-uses-ai-chatbot-to-cut-hospital-bill-from-usd195-000-to-usd33-000-family-says-claude-highlighted-duplicative-charges-improper-coding-and-other-violations https://www.tomshardware.com/tech-industry/artificial-intell... was discussed earlier on HN.
  - FireBeyond 11mo ago
    > Imagine to open a restaurant you would need to go to some board and argue how your restaurant is needed in this neighborhood, or the idea that opening a restaurant would INCREASE restaurant prices by offering duplicative services. Madness! And the board goes to the other restaurants and asks them, "hey, if this new restaurant opened, would you reduce your business?" > Certificate of need (CON) laws are state regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities ... and any time someone likes to defend them, I like to point out that CoNs were an invention of hospital owner lobby groups, and that those hospital owners pushed for them.
  - nradov 11mo ago
    Cost transparency and comparison shopping have gotten a bit better in recent years. Health plans are now required to give members access to cost estimation tools. If you need an expensive procedure like an MRI then it's worth shopping around. https://www.cms.gov/priorities/healthplan-price-transparency/overview/consumers https://www.cms.gov/priorities/healthplan-price-transparency... For patients without health insurance they have the legal right to insist on a good faith estimate. https://www.cms.gov/medical-bill-rights/help/guides/good-faith-estimate https://www.cms.gov/medical-bill-rights/help/guides/good-fai... There are still some technical obstacles to giving patients with insurance accurate estimates for out-of-pocket costs. The current HIPAA adopted standards for most electronic claims don't allow for prospective claims to see exactly how much a health plan would pay for a treatment. CMS is working on a proposal to adopt a newer version of those standards which will support prospective claims. https://www.cms.gov/priorities/key-initiatives/burden-reduction/administrative-simplification/hipaa/adopted-standards-operating-rules https://www.cms.gov/priorities/key-initiatives/burden-reduct...
Refreeze5224 11mo ago
Feel free to argue against what he's saying instead of his tone. If you think he's wrong, which he isn't, feel free to ague that point instead of pretend that healthcare being for profit isn't incredibly harmful, and that the US is not laps behind every other developed nation.
- bko 11mo ago
  Sure, it's pretty easy to argue. The profit margin on health care providers is not that high. The median hospital operating margin in the US is 7%, despite 37% of hospitals operating in the red. Even if you assume profit is completely useless in organizing activity and investment, removing profit would save at most ~7% expenses and that wouldn't be that transformational. So it's not profit motive that leads to high healthcare costs in the US https://www.advisory.com/topics/margin-management/health-system-margin-performance-benchmarks https://www.advisory.com/topics/margin-management/health-sys...
  - Refreeze5224 11mo ago
    The entire point of the article is that patients become customers, with an attendant reduction in care. When you treat people attempting to save their own lives as simply sources of profit, you subject them to all the other gross and manipulative sales/profit maximization strategies that capitalists use. It's not just that the costs are higher, it's about a loss of human dignity. Fundamentally it's a moral question, not an economic one. Should people's health and actual lives be treated as simply a way to generate profit? Answering anything other than no is a relatively new development in societies, and is flat out wrong.
    - bko 11mo ago
      So we shouldn't allow people to "profit" off saving our lives? Maybe we should ban for profit surgeons. Seems unfair, morally, that someone is profiting and living in a nice house and has a nice car from saving my life.
      - 11mo ago
sharts 11mo ago
Isn’t capitalism and free-market thinking also vibes? Most economics is irrational, but assumes rational. Therefore even most economic analysis is silly.

mindslight 11mo ago

The problem I have with this line of thinking is that food is also pretty necessary for human survival, yet we've got a vibrant for-profit market that provides it, plus government subsidies to provide for those who cannot afford it (constantly creeping anticompetitive schemes, and autocratic fascists' attempts to withhold said subsidies, notwithstanding) Boiling down the problems with healthcare being "for-profit" is like blaming an infection on the bacteria and calling it a day. In reality the bacteria have only been allowed to fester due to deeper problems. I'd say the real problem is this industry has used regulations, both government and shared corporate "policy", to except themselves from most standard forms of accountability and market (aka patient) responsiveness. What other industry cannot tell you how much something costs ahead of time, and operates by sending you an arbitrary bill after the fact that is still fraudulent with amounts of 3-4x the actual prices? What other industry prevents new competitors from opening without a "certificate of need" ? What other industry is allowed to negotiate amongst itself to blatantly fix prices ? What other industry has had a lauded attempt at reform that included making patronizing that industry mandatory ?! This certainly isn't a call to blindly "eliminate regulations", as history has shown that kind of thing mostly eliminates remaining checks while not going anywhere near the regulations that actually need reform (which are a lot of entrenched industry wide "business practices" at this point). But rather these are the terms we need to be thinking in rather than knee jerk blaming "profit".

germinalphrase 11mo ago
The first strong move toward any system better than the status quo is universal price transparency.
saulpw 11mo ago
You can grow your own food. You can't perform your own cataract surgery and you can't make your own vaccines. As to your analogy, yes, the root cause of the infection is bacteria. Yes, there are supporting factors, like the open wound that allowed the bacteria in, or a weakened immune system that allowed it to flourish. But when you're treating an infection that's already out of control, you focus on eradicating the bacteria. You also clean the wound and boost the immune system if possible, but those are secondary measures. In the case of healthcare, "for-profit" is the root cause. There will still be corruption and capture and psycho nurses, but those are wounds that can be fixed or suffered one at a time. Whereas the for-profit aspect of healthcare is a metastasized cancer that no amount of surgery can cure. We might need all kinds of treatments but we have to address the root cause as well.

derelicta 11mo ago

Commodity production is. All of it.

dirtikiti 11mo ago

No, government subsidies to for-profit healthcare is the problem. As with every other subsidized sector, they balloon the price when there is an unlimited supply of funding to pay for it. As opposed to a consumer focused sector where the prices are dictated by what the consumer can afford.

MangoToupe 11mo ago
Why not both? Combining profit and health care creates a literal death cult.
voxl 11mo ago
This is ridiculous. A consumer doesn't want to die. Life saving "medical products" can be too expensive even with completely honest and well intentioned pricing. The whole point of the system is good people want to pool resources to enable purchasing these "medical products" to save lives. Pooling resources is subsidizing others, government or otherwise. Removing that is an impossibility.

lisbbb 11mo ago

Having worked at UNH and also having them and later UMR (owned by UNH) and now being insured by a non-public company, I can tell you the difference is huge. UNH is for profit through and through, quarterly reports are all that matter, and squeezing subscribers and providers is the result. It's disgusting and I'm pretty embarrassed to have worked for them at all because I was with a different company that was privately held and while their ethics were compromised, too, it was nothing at all like what I saw at UNH. There's no reason to have for profit, publicly traded health insurers, it doesn't need to be a thing.

nradov 11mo ago

This type of article allows people to indulge in righteous indignation and feel morally superior to the dirty capitalists — but it largely misses the point. The excessive spending in our healthcare system is mostly for treating chronic conditions caused by lifestyle issues: substance abuse, over eating, lack of exercise, junk food, lack of sleep, etc. Taking profits out of the system won't solve that fundamental problem. Other countries with socialized healthcare systems are perhaps more efficient and cost effective but they're facing similar systemic problems as their populations age, just on a longer time horizon.

maxerickson 11mo ago
We can probably take costs out too. Crazy that it costs $1500 to go to a sleepy ER and get 20 minutes of attention from a PA. And then the hospital bills you.