

Want to kill health insurers? This start-up is teaching hospitals how. - sc68cal
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/05/want-to-kill-health-insurers-this-start-up-is-teaching-hospitals-how/

======
joshuaellinger
"We wanted a Steve Jobs feel so we decided not to bath for months."

But more seriously -- I see two real weaknesses in this idea. First, hospitals
typically don't have the doctors directly on staff so they have visibility but
relatively little leverage. They provide an army of nurses but the doctors are
independent contractors. Second, you need scale to make it work. It's not
clear that a single hospital has the right scale to be an insurer.

I think the right way to kill health insurers is just by fiat. Medicare for
All.

Health Insurance is not, and has never been, a real market with normal
economic behavior. Imagine if car insurance that let you drive like an maniac
but only based your premium of age of the car, then if you had an accident, it
would spend unlimited amounts of money to fix your existing car. And after
your car is ten years old, the government takes over. That's our health care
system.

A rational system would accept that everyone dies, share the risk of rare
accidents across a large pool of people, and spend a lot of money earlier in
peoples lives rather than waiting until they get to the emergency room.

I'm a capitalist to the core but it just doesn't work with you don't have a
free market with a normal price-elasticity curve.

~~~
ggchappell
> I think the right way to kill health insurers is just by fiat. Medicare for
> All.

However desirable that may be, the reason it is unlikely to happen is that the
incentives are aligned the wrong way for the relevant decision makers.
Insurance companies are funding congressional campaigns; as long as this goes
on, Congress is unlikely to try to put insurance companies out of business.[1]

The approach discussed in the article, for all its weaknesses (which you have
nailed, IMHO), at least has the incentives in the right direction. Congress
may love insurance companies, but hospitals and doctors do not.

[1] Indeed, one of the primary points of "Obamacare" is that Americans are now
required by law to purchase insurance companies' offerings.

