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Health insurance in general is the problem; PBMs/discount cards are just a cherry on top. Insurance is fundamentally incompatible with clear and consistent pric

by Uvix 9mo ago

Health insurance in general is the problem; PBMs/discount cards are just a cherry on top. Insurance is fundamentally incompatible with clear and consistent pricing.

lotsofpulp 9mo ago
Pharmaceutical companies, hospitals, and doctors are free to charge by the medicine, by the night, and by the minute. For example, this place does it: https://surgerycenterok.com/surgery-prices/ https://surgerycenterok.com/surgery-prices/ Insurance companies do not force the sellers to use complex billing practices, they would benefit from more transparent pricing (since they are seeking to pay less). The root cause is healthcare is inherently complicated and complex, it has a problem of supply being nowhere near demand, and since prices for things are so high (including liability), there is a lot of cover your ass and fraud prevention going on.
- acdha 9mo ago
  Don’t do pro bono PR for those companies. Healthcare isn’t so complicated that every other country in the world hasn’t been able to solve it for significantly less money and far less stress for users, not to mention better health outcomes in most cases.
  - lotsofpulp 9mo ago
    Providing a chain of reasoning to support a logical conclusion is not “pro bono PR for those companies”. Claiming that someone doing that seems like an emotional kneejerk reaction to an idea that does not jive with the model of the world you would like to have. I even provided an example of a healthcare provider choosing to be more transparent. It is always Eli Lilly’s choice to sell their medicine at a flat price to everyone. But it is also in Eli Lilly’s benefit to engage in price discrimination, so that they get paid more by people who can pay more: https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination Another example of this was when I was in college, US textbooks cost multiple times more than the international version of the textbook I could buy on Abe books or whatever website. Or, coupons for grocery stores. The insurance company has no hand in this. To be clear, insurance companies also cause waste, because the government does not audit them, and the insurance companies are not staffed appropriately to resolve disputes in a timely manner.
    - lenkite 9mo ago
      > it has a problem of supply being nowhere near demand, Get rid of the patents and this will solve itself in no time. > The insurance company has no hand in this. False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors.
      - lotsofpulp 9mo ago
        Yes, no one is stopping US (or other countries’) taxpayers from paying for all the drug trials so that the resulting medicines are in the public domain. > False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors. This is a wild assertion. The sum total of all 7 publicly listed insurance companies’ market caps is less than Eli Lilly, just one pharmaceutical company. I would need some evidence before believing that health insurance company leaders have any influence on pharmaceutical companies. I would also be surprised to learn insurance companies hold specific stocks, seems like a risk insurance companies would not take, especially ones that have lots of routine cash expenses. They spend ~85% of their premiums on medical expenses, and probably at least 5% to 10% on their own staff, so they shouldn’t even have much extra cash left to invest for the long term. https://www.oliverwyman.com/our-expertise/insights/2023/mar/health-insurer-financial-insights-volume-11-p1.html https://www.oliverwyman.com/our-expertise/insights/2023/mar/... Edit: hit posting limit, so to respond to comment below about net income, that Yale link does not seem relevant as it is for all healthcare companies. All 7 publicly listed insurers’ combined annual net income is $35B or less for the previous 20 years, at a profit margin of 3% or less, which is peanuts. The pharmaceutical companies earn much more money than them, which is why the pharmaceutical companies have higher market caps. > Why are we using market cap as a metric ? Look at investment value. Because a company that owns influential portions of another company would have that reflected in their market cap. Like Berkshire Hathaway does. with the exception of UNH (due to its healthcare provider business), the other insurance companies are relatively tiny businesses compared to pharmaceutical companies and so cannot be holding any influential amount of stock.
- anthuswilliams 9mo ago
  Insurance companies absolutely benefit from the higher and opaque prices, because they negotiate rebates with providers. This allows them to maximize patient copays and ensures they hit their deductible, i.e. paying as much as possible under their respective insurance plans. Contrast this with a no-rebate world with cheaper/more transparent pricing. Fewer patients would hit their out of pocket maximum. They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people". Of course, that above only applies if there is competitive pressure. If there is no competitive pressure (e.g. in states with only one or two insurers), they can keep premiums high and book as profit the difference between what the patient paid out and what the patient would have paid out in a lower-cost no-rebate world.
  - vjvjvjvjghv 9mo ago
    Everybody in this system benefits from this insanity, except the patient.
  - lotsofpulp 9mo ago
    > Contrast this with a no-rebate world with cheaper/more transparent pricing. Fewer patients would hit their out of pocket maximum. And premiums would go up. Every insurer has to get their premium approved by every state’s insurance regulator, and every state’s insurance regulator is not going to allow them to have more than a few percent of profit. > They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people". I’ve never heard of this, and it’s legally not allowed. The ACA mandates insurers price plans so that old people only pay at most 3x what young people pay. And the ACA does not allow insurers to charge more to people likelier to need healthcare. Mathematically, that means younger and healthier people pay higher premiums so that older and sicker people can have lower premiums. NY state goes even further and says all ages pay the same premium, so young subsidizes old even more. MA has a 2x cap, I believe. And then of course, FICA taxes mean the young and working are paying for the healthcare for the old and non working, the vast majority of all healthcare spend in the US (Medicare).
- Uvix 9mo ago
  Pharmaceutical companies, hospitals, and doctors are free to charge like that. But if I'm using insurance, it's irrelevant; that's the price to the insurer. It's the insurance company who determines the price I pay, using whatever arcane rituals they've chosen.
  - quietsegfault 9mo ago
    Unless the anesthesiologist is mysteriously out of network, or you failed to get some silly pre-approval, or…
vjvjvjvjghv 9mo ago
Germany has health insurances and they don’t do that nonsense. They fulfill their task which is to spread the risk over a wide range of people. That’s what insurance is for.

by Uvix 9mo ago

Health insurance in general is the problem; PBMs/discount cards are just a cherry on top. Insurance is fundamentally incompatible with clear and consistent pricing.

lotsofpulp 9mo ago

Pharmaceutical companies, hospitals, and doctors are free to charge by the medicine, by the night, and by the minute. For example, this place does it: https://surgerycenterok.com/surgery-prices/ https://surgerycenterok.com/surgery-prices/ Insurance companies do not force the sellers to use complex billing practices, they would benefit from more transparent pricing (since they are seeking to pay less). The root cause is healthcare is inherently complicated and complex, it has a problem of supply being nowhere near demand, and since prices for things are so high (including liability), there is a lot of cover your ass and fraud prevention going on.

acdha 9mo ago
Don’t do pro bono PR for those companies. Healthcare isn’t so complicated that every other country in the world hasn’t been able to solve it for significantly less money and far less stress for users, not to mention better health outcomes in most cases.
- lotsofpulp 9mo ago
  Providing a chain of reasoning to support a logical conclusion is not “pro bono PR for those companies”. Claiming that someone doing that seems like an emotional kneejerk reaction to an idea that does not jive with the model of the world you would like to have. I even provided an example of a healthcare provider choosing to be more transparent. It is always Eli Lilly’s choice to sell their medicine at a flat price to everyone. But it is also in Eli Lilly’s benefit to engage in price discrimination, so that they get paid more by people who can pay more: https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination Another example of this was when I was in college, US textbooks cost multiple times more than the international version of the textbook I could buy on Abe books or whatever website. Or, coupons for grocery stores. The insurance company has no hand in this. To be clear, insurance companies also cause waste, because the government does not audit them, and the insurance companies are not staffed appropriately to resolve disputes in a timely manner.
  - lenkite 9mo ago
    > it has a problem of supply being nowhere near demand, Get rid of the patents and this will solve itself in no time. > The insurance company has no hand in this. False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors.
    - lotsofpulp 9mo ago
      Yes, no one is stopping US (or other countries’) taxpayers from paying for all the drug trials so that the resulting medicines are in the public domain. > False. Insurance companies in the US own stock in big pharma firms like Pfizer, Johnson & Johnson, Eli Lilly, etc. They maintain substantial investment portfolios and generate returns on premiums and reserves. They also have voting rights as institutional investors. This is a wild assertion. The sum total of all 7 publicly listed insurance companies’ market caps is less than Eli Lilly, just one pharmaceutical company. I would need some evidence before believing that health insurance company leaders have any influence on pharmaceutical companies. I would also be surprised to learn insurance companies hold specific stocks, seems like a risk insurance companies would not take, especially ones that have lots of routine cash expenses. They spend ~85% of their premiums on medical expenses, and probably at least 5% to 10% on their own staff, so they shouldn’t even have much extra cash left to invest for the long term. https://www.oliverwyman.com/our-expertise/insights/2023/mar/health-insurer-financial-insights-volume-11-p1.html https://www.oliverwyman.com/our-expertise/insights/2023/mar/... Edit: hit posting limit, so to respond to comment below about net income, that Yale link does not seem relevant as it is for all healthcare companies. All 7 publicly listed insurers’ combined annual net income is $35B or less for the previous 20 years, at a profit margin of 3% or less, which is peanuts. The pharmaceutical companies earn much more money than them, which is why the pharmaceutical companies have higher market caps. > Why are we using market cap as a metric ? Look at investment value. Because a company that owns influential portions of another company would have that reflected in their market cap. Like Berkshire Hathaway does. with the exception of UNH (due to its healthcare provider business), the other insurance companies are relatively tiny businesses compared to pharmaceutical companies and so cannot be holding any influential amount of stock.
anthuswilliams 9mo ago
Insurance companies absolutely benefit from the higher and opaque prices, because they negotiate rebates with providers. This allows them to maximize patient copays and ensures they hit their deductible, i.e. paying as much as possible under their respective insurance plans. Contrast this with a no-rebate world with cheaper/more transparent pricing. Fewer patients would hit their out of pocket maximum. They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people". Of course, that above only applies if there is competitive pressure. If there is no competitive pressure (e.g. in states with only one or two insurers), they can keep premiums high and book as profit the difference between what the patient paid out and what the patient would have paid out in a lower-cost no-rebate world.
- vjvjvjvjghv 9mo ago
  Everybody in this system benefits from this insanity, except the patient.
- lotsofpulp 9mo ago
  > Contrast this with a no-rebate world with cheaper/more transparent pricing. Fewer patients would hit their out of pocket maximum. And premiums would go up. Every insurer has to get their premium approved by every state’s insurance regulator, and every state’s insurance regulator is not going to allow them to have more than a few percent of profit. > They can use the rebates they get from the providers to subsidize the insured, allowing them to offer lower premiums and gain market share. This is what people mean when they say "In America, the sick people pay to subsidize the health care of the healthy people". I’ve never heard of this, and it’s legally not allowed. The ACA mandates insurers price plans so that old people only pay at most 3x what young people pay. And the ACA does not allow insurers to charge more to people likelier to need healthcare. Mathematically, that means younger and healthier people pay higher premiums so that older and sicker people can have lower premiums. NY state goes even further and says all ages pay the same premium, so young subsidizes old even more. MA has a 2x cap, I believe. And then of course, FICA taxes mean the young and working are paying for the healthcare for the old and non working, the vast majority of all healthcare spend in the US (Medicare).
Uvix 9mo ago
Pharmaceutical companies, hospitals, and doctors are free to charge like that. But if I'm using insurance, it's irrelevant; that's the price to the insurer. It's the insurance company who determines the price I pay, using whatever arcane rituals they've chosen.
- quietsegfault 9mo ago
  Unless the anesthesiologist is mysteriously out of network, or you failed to get some silly pre-approval, or…

vjvjvjvjghv 9mo ago

Germany has health insurances and they don’t do that nonsense. They fulfill their task which is to spread the risk over a wide range of people. That’s what insurance is for.