Re:Health care is turning into a consumer product
by nicoburns on Tuesday January 11, 2022 @05:59AM
(#29889928)
> ~20% which doesn’t seem ridiculous for an insurance business.
I think the issue with healthcare insurance companies in the US is that they collude with the hospitals to artificially inflate the cost of things so that their 20% is 20% of 10x the actual value of the treatment.
> Market is a fine fit for every healthcare need that doesn't start with a trip to the ER which is the overwhelming majority of healthcare dispensed in the US.
I think most people are interpreting this as “market is a fine fit for every healthcare need [except for those that start in the ER] which is the overwhelming majority...”
I.e. that you’re advocating the market for the majority of healthcare rather than the majority.
I think your actual recommendation is the opposite. Maybe this would be clearer if you just laid it out like, “Most healthcare is non emergency, cost is a primary concern which insurance makes worse, markets are good at solving cost issues.”
Responding to your actual argument, however, I see many people claim that insurance companies are taking a “fat cut”, but I see very little evidence of higher than expected ROI/ROE in Aetna / United / etc. (ref: United’s net margin is ~5%, ~15B in net income on 300B of revenue). ROE is ~20% which doesn’t seem ridiculous for an insurance business.
The bigger problem seems to be personnel spending in healthcare (admin, support staff, billing), and generally a systemic culture that’s not even knowledgeable about what prices they charge, let alone price conscious in the services they deliver.