
How to combat healthcare benefit costs as a startup - turoczy
http://siliconflorist.com/2010/11/18/calling-oregon-entrepreneurs-action-doityourself-health-healthcare-reform/
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tptacek
The concern I have with this article is that it dances around the core problem
with US health care, which is that the underlying market for health services
is --- in most cases --- coupled directly and inextricably with the health
insurance establishment.

It's all well and good to tell people to fund HSAs or buy health discount
cards or get savvier about spending and buy generic meds. But a trip to the
emergency room or a serious illness is simply going to max out your
deductable, no matter how cost-conscious you are.

The core problem is that medical services are priced by colluding hospital
chains and insurance companies, and those prices are both (a) deliberately
decoupled from the actual economics of providing health care and (b) a fig
leaf covering the way hospitals and insurers actually resolve invoices.

Unless/until you can extract the insurers from medical pricing, no amount of
free market cheerleading is going to fix the problem. _We don't have a free
market_ to fall back on.

~~~
yummyfajitas
I don't understand - what's the problem with insurers colluding to reduce
costs? If they successfully create a downward price pressure, isn't that a
good thing?

~~~
tptacek
The side effect of their collusion coupled with their commanding share of the
market is the destruction of the private market for health care, presumably
because the administrative overhead of servicing that market and ensuring that
it is transparent and inefficient dominates the returns they'd expect from it.

This isn't complicated: the price list for medical procedures bears no
relationship either to the cost of those services or the money changing hands
between providers and insurers.

~~~
yummyfajitas
Why do you believe the private market was destroyed by collusion between
insurance companies, rather than the massive government subsidies (20-30%, I
think) provided to the employer-supplied insurance market?

~~~
tptacek
You're trying to pin down a value judgement I'm not making. Stipulate that the
government played a major role in creating this problem. Now what? I'm pretty
sure my point still stands: there's no free market for private health care to
fall back on, no matter how efficiently you consume health services.

~~~
yummyfajitas
I'm not disputing your main point that the market in medical services is very
far from free, or attempting to pin down a value judgement.

I'm only questioning your claim that collusion among insurance companies does
much of anything besides push us closer to monopsony pricing.

~~~
tptacek
Collusion between providers and insurers has, as an _externality_ to the
actual transaction taking place, severely distorted the market for medical
services in the US. I'm not questioning whether insurers should be able to
negotiate prices with providers.

If employer-sponsored health insurance wasn't the primary vehicle for medical
expenses in the US, maybe you could get an actual price list for hospital
services even in the face of aggressive negotiation. But it is, and so you
can't, and any conversation about health expenses that tries to dodge that
point is disingenuous. That's my point.

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irons
The crux of his prescription is to reserve insurance for the catastrophic,
low-probability events like getting cancer or hit by a bus, but high-
deductible catastrophic plans seem carefully calibrated to make you go
bankrupt anyway. Given any other choices at all, I wouldn't trust my heath to
one.

I reviewed plans with a health insurance broker in Washington state in
September, who openly mocked some Regence (Blue Shield) coverage with a
fifteen hundred dollar annual limit on "complex imaging", which means MRIs,
CAT scans, PET scans, mammography, etc. He said, "Do you have any idea how
many scans you'd get if you had cancer?", and that $1500 might cover most of
the first one. If you missed that detail and got sick, you might as well not
have insurance.

~~~
orangecat
_I reviewed plans with a health insurance broker in Washington state in
September, who openly mocked some Regence (Blue Shield) coverage with a
fifteen hundred dollar annual limit_

That's not high-deductible, it's low-benefit. A high deductible plan would
have you pay out of pocket up to $5k or $10k, and then cover everything above
that. I agree that a plan that caps benefits (at something less than $1
million or so) is practically worthless, because the sort of events you
actually want to insure against get expensive really fast.

~~~
irons
_That's not high-deductible, it's low-benefit._

I have less experience shopping for group plans, but in the individual market
you will die of natural causes before you find a high-deductible, high-benefit
plan, let alone one without fatal loopholes.

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brudgers
> _"The second dimension is becoming savvier healthcare consumers."_

Once you conflate patients with consumers, you have fundamentally moved away
from a public health model towards a model where costs are based on what the
market will bear rather than the costs associated with providing the service.

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Jun8
Question to people who have small (e.g. <5 people) startups: what system do
you use for employee heath care?

~~~
whatrocks
This is a question I would love more clarity on. Especially pre-employee -
what do bootstrapped founders typically do for their own healthcare? Do most
roll the dice and go without? If so, do you stop going to regular dentist
check-ups, etc.?

~~~
MichaelSalib
If you live in MA, you can purchase health insurance using the state exchange
over the web. Minimal prices for a family of two are about $550/month (or were
last I checked). Prices/availability can only vary based on
age/gender/location so you don't have to worry about being denied coverage for
a preexisting condition. You can cancel with one-month's notice.

<https://www.mahealthconnector.org/portal/site/connector/>

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cabalamat
Relocate to the UK.

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earl
I can't believe people aren't tearing this asshole to threads. Between all the
bullshit in his article, what he's really saying is this: let's pay less for
health insurance by transferring more costs to the individual. I suppose you
might support this if you're so deluded as to think lots of people are going
to the doctors office because they're bored and have nothing better to do than
have time consuming, often humiliating, uncomfortable to painful procedures
and tests performed on them on a schedule that's extremely inconvenient. OTOH,
those of us whose heads aren't firmly buried up our assholes think that people
mostly try hard not to go to the doctor or hospital because the experience
sucks, and so the way this Dave asshole is trying to save money is by
discouraging _you_ from getting health care you need by making it cost more.

ps -- people who don't straightforwardly acknowledge that health insurance
isn't insurance, it's group cost pooling, are idiots who should be ignored in
the health care debate. It's not insurance and shouldn't be because we can
tell that in certain cases people will cost a lot of money to treat. Insurance
would leave them out in the cold. Societies with integrity or conscience treat
people anyway. Compare to insurance -- if you build a house in a flood zone on
the florida cost, you should probably be told hell no -- no company will sell
you insurance. If all the women in your family get breast cancer, we should
still give you health insurance for when you get breast cancer.

~~~
yummyfajitas
_I can't believe people aren't tearing this asshole to threads. Between all
the bullshit in his article, what he's really saying is this: let's pay less
for health insurance by transferring more costs to the individual. I suppose
you might support this if you're so deluded as to think lots of people are
going to the doctors office because they're bored and have nothing better to
do than have time consuming, often humiliating, uncomfortable to painful
procedures and tests performed on them on a schedule that's extremely
inconvenient._

This has been proven experimentally (by a randomized trial) to be true. When
people pay more out of pocket for medicine (95% copay vs 5%), they consume 30%
less medicine, but have statistically identical health outcomes.

<http://www.rand.org/health/projects/hie/>

The reason people consume unnecessary medicine is unknown, but the fact that
they do so is not in doubt.

(I'm not even going to address your claim that "anyone who disagrees with me
on the purpose of insurance are idiots".)

~~~
earl
The glibertarians' favorite experiment -- which is (btw) 30 years old and
unreplicated despite attempts, and has methodological flaws. To name just one:
a number of people dropped out of the study. The authors have dismissed this
as a concern, but you don't have to think to hard to figure out why it is a
real problem. Second, as the author admits: "For most people enrolled in the
RAND experiment, who were typical of Americans covered by employment-based
insurance, the variation in use across the plans appeared to have minimal to
no effects on health status. By contrast, for those who were both poor and
sick -- people who might be found among those covered by Medicaid or lacking
insurance -- the reduction in use was harmful, on average"

Good system.

~~~
tptacek
This unproductive argument is exactly what's wrong with your Pickett's Charge
case against the ethics of insurance as oppposed to "cost pooling". People who
disagree with your slippery slope argument will just put you on their own
slippery slope; pretty soon you'll be arguing that yes, it's only fair for us
to be buying everyone's kids X360's.

There are plenty of pragmatic problems in the current system to address
arguments to. The solutions to those problems will improve people's lives
without requiring anyone to adopt new political ideologies.

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klbarry
If you're in NYC and an early start-up freelancers union can be useful.

