> But they are still paying it, it's just obfuscated.
They're not still paying it. Collectively, yes, the insurers are passing the cost on to the insured population. But the number of people taking that drug is tiny[0], so it amortizes very quickly. For the patients taking the drug, the effect on their own premiums from that price increase is less than a penny.
This is what I'm talking about when I say that medical billing is the real problem: the effects are non-obvious and highly-interconnected. You're right about the perverse incentive created by the MLR; and that's just the tip of the iceberg.
The issue is systemic. Yeah, this drug only has a few people, another drug only has a few other people, etc. But looking at it from a per drug perspective is not seeing the forest through the trees.
Seriously, average premiums increased in my state 26.7% last year. It's because of systemic issues that this a perfect example of a facet of.
> The issue is systemic. Yeah, this drug only has a few people, another drug only has a few other people, etc. But looking at it from a per drug perspective is not seeing the forest through the trees.
I don't understand, because it sounds like you're trying to argue with what I'm saying, but we're literally making the same point.
Shkreli makes for an easy target because he's the absolute caricature of a villain. But at the same time, focusing on this drug misses the point. Even if Shkreli cut the price of the drug to $0, there would be no measurable effect on patients. And while not everyone is as overtly malevolent as Shkreli is, the incentives that cause this sort of behavior aren't caused by the pharmaceutical companies (nor can they really be fixed by the pharmaceutical companies - at least not systemically - because they're just responding to the incentives that have already been created).
The problem is that the media coverage of the issue is like 99,5% Shrkeli, his smug face and lacking social skills. Look at the title of this post alone - and we're on the rational, reflecting side of the internet here
They're not still paying it. Collectively, yes, the insurers are passing the cost on to the insured population. But the number of people taking that drug is tiny[0], so it amortizes very quickly. For the patients taking the drug, the effect on their own premiums from that price increase is less than a penny.
This is what I'm talking about when I say that medical billing is the real problem: the effects are non-obvious and highly-interconnected. You're right about the perverse incentive created by the MLR; and that's just the tip of the iceberg.
[0] There were 500 pills sold in Dec 2015.