Re:Report: 90% of nurses considering leaving the profession ...
by darkerside on Wednesday April 27, 2022 @01:26PM
(#31182999)
I don't hear it talked about enough, but I think the biggest problem with insurance is that their profits are pinned to how much they spend on medical costs.
In theory, this sounds like a great way to make sure insurance companies aren't just taking unreasonable profits, and that they are spending money on medical care, not administration, keeping the business lean.
In _practice_, what it means is that profits are constrained by medical costs, so the insurance companies are literally incentivized to pay _more_ for medical services. Originally, insurance companies were supposed to be an intelligent negotiator on behalf of their customers. After all, their experts should know much more than a layperson every will.
But with the poisoned incentive to raise costs, customers are basically held hostage by a bag faith negotiator. Not bad faith as in malicious, but in terms of having an enormous conflict of interest.
https://www.verywellhealth.com/health-insurance-companies-un....
In theory, this sounds like a great way to make sure insurance companies aren't just taking unreasonable profits, and that they are spending money on medical care, not administration, keeping the business lean.
In _practice_, what it means is that profits are constrained by medical costs, so the insurance companies are literally incentivized to pay _more_ for medical services. Originally, insurance companies were supposed to be an intelligent negotiator on behalf of their customers. After all, their experts should know much more than a layperson every will.
But with the poisoned incentive to raise costs, customers are basically held hostage by a bag faith negotiator. Not bad faith as in malicious, but in terms of having an enormous conflict of interest.