> "There is no such thing as a legitimate price for anything in health care,” says George Halvorson, former chairman of Kaiser Permanente, the giant health maintenance organization based in California. “Prices are made up depending on who the payer is."

When you can game the pricing you can always just slice 80% from an ever increasing pie.

That's not really how it works. The "ever increasing" pie would have to come directly from increasing subscriber premiums, not from cutting costs and pocketing the difference the OP indicated.

It doesn't matter how much they play with pricing on the back end, the company can't make more than 20% profit from subscriber premiums.

There is a whole lot of backscratching with the profiteers taking their cut of the 80%. That is why we get $30 Tylenol pills under the guise of "care".

Hospitals aren't charging insurance companies $30 for Tylenol and then paying insurance companies under the table if that's what you're alleging.

That's completely illegal and it's just too noticeable for them to do it large scale.

The OP was making a baseless claim because they didn't know what they were talking about, and you're now grasping at straws supporting their claim for some reason.

None of the stakeholders in American for-profit healthcare have any incentive to reduce costs so everything just keeps ratcheting up. Growth can't be achieved by increasing the population of sick people so the only other option is to raise prices. The insurance companies do benefit from this. They agree to cover the inflated pricing so that their 20% cut can be bigger. If ACA permitted rational price controls this whole problem would have been reigned in.

How does this have anything to do with

>I think they're just pocketing the difference between the market rate and what their costs are.

The OP had made a very specific claim about Kaiser. That Kaiser is reducing their costs but pocketing the savings and not passing them on to consumers.

I pointed out that there is no legal way for them to do that. You've made 3 posts and so far nothing you've said in anyway refutes that.

An allowance 15-20% overhead for health insurance seems like pretty low bar for the industry...

And yet, it was groundbreaking when it was signed into law. People received refund checks after it went into effect.

And immediately after, administration costs shot up to ooh, 15-20%...

Yes, I suspect it ends up as something of a perverse disincentive to control costs

They were already above that. Especially the not-for-profits (e.g. Blues) had to scramble to get under the cap.

There was a huge amount of waste in the system. 15-20% is a marked improvement.