That seems to be the state of US healthcare unfortunately. What used to be an ethical doctor-pactient relationship has turned into a doctor-insurance-patient monstrosity. Doctors actually have limited autonomy. They can't always do what's best for the patient, only what the insurance company agrees with.
The patient and doctor are free to negotiate a deal that avoids third parties such as the insurance company.
The patient chooses to hire an insurance company (better labeled a "managed care organization") to manage their care, because they do not know what they are buying, or how much it should cost.
>They can't always do what's best for the patient, only what the insurance company agrees with.
Because that is what the patient can afford.
Note that when the previous commenter states this:
> everything to do with maximizing insurance based revenue.
They are referring to requirements frequently set forth by the government or their employer. Some of them are called "star ratings", and the government goes to managed care organizations (who also sell health insurance), and task them with implementing standards of care and star ratings and a very complex system that determines who gets paid how much and who is incentivized to do what.
It is very naive and counterproductive to label insurers as the bad guy because "insurers maximizing revenue", because it lets go of the real issue, which is that
A) healthcare is hard, and measuring results even harder
B) supply of healthcare is low relative to demand
C) the limited supply of healthcare has to be allocated in some manner
It is a very complicated subject, that involves many players, incentives, opportunities for corruption, people with good intentions, and no easy answers.
The whole point of these things is to get them to pay for the costs of whatever the patient needs. These needs are determined by their doctor. If they're not paying, they have no reason to exist.
Not being able to help people because of lack of resources is one thing. These companies hire experts and pay them bonuses every time they find some loophole they can use to get out of their obligation.
>The whole point of these things is to get them to pay for the costs of whatever the patient needs. These needs are determined by their doctor. If they're not paying, they have no reason to exist.
Per the payer's terms, whether it be government or employer or insurance company, their needs are not necessarily solely determined by a single doctor. There are teams of doctors and pharmacists at CMS, state Medicaid organizations, and insurance companies that create protocol for various courses of treatment in order to prevent mistakes, waste, and fraud.
>These companies hire experts and pay them bonuses every time they find some loophole they can use to get out of their obligation.
Source? It seems odd that a company that earns more money if it spends more on healthcare would have an incentive to look for loopholes. Of course, they have an incentive to not spend frivolously to maintain competitive prices.
But they are all using the same protocols that the government uses anyway (via CMS), since the government contracts with the same MCOs to administer taxpayer funded healthcare for 40%+ of Americans via Medicare/Medicaid/Tricare.
>> They can't always do what's best for the patient, only what the insurance company agrees with.
> Because that is what the patient can afford.
What is the point of paying for insurance, then? Nothing legitimizes for-profit insurance companies having any role or prerogative in health care, other than the status quo.
The point of insurance is to protect against unaffordable losses.
An insurance business only works if the losses are, by and large, randomly distributed and unexpected.
The more predictable the losses, the more an insurance offering resembles a payment plan where you are simply setting aside money with a third party to save for the eventual loss. This is because as losses become more probable, the insurance company has to increase premiums eventually to the point where the sum of the premiums is equal to the losses if the probability of loss is 100%.
This is the current state of health insurance in the US. It is not what would normally be called an insurance product. In fact, quite a few of the stipulations of ACA make health insurance premiums explicitly a tax from the young/healthy to the old/sick. Therefore, the industry term is to refer to health insurance companies as "managed care organizations" (MCOs), some of whom sell health "insurance".
In the US, when you pay health insurance premiums, if you are young/healthy, you are mostly paying for the treatment of the old/sick, and only minority paying to protect against the risk of you breaking your arm.
The profit that MCOs earn is actually more like an administration fee. The US could have implement an NHS style taxpayer funded healthcare system, but the politically viable option in 2010 was to outsource the administration of healthcare (pricing negotiations, healthcare rationing, auditing, etc) duties to MCOs, hence we have a system where the government (or employer) sets the rules, that abide by ACA rules, and then the MCOs execute them.
For example, nearly half of Americans' healthcare is paid by the government, but it is administered by MCOs. The MCOs are not setting the rules, just carrying out the stipulations of their contracts with the government:
If you have future earning potential, or a little bit of wealth saved up, then health insurance in the US is valuable because your out of pocket maximum is capped.
Apologies, I really didn't mean to make you rehearse for me how things work today. But I am curious about what your point of view is on whether the role for-profit health insurance providers play today is legitimate and salutory.
We have our current system largely as a result of regulatory capture, so no amount of pointing to the status quo and shrugging at its complexity legitimizes it. Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket.
>Again, I fail to see the legitimacy of a regime in which I must either pay a for-profit corporation for the privilege of preventing my doctor from doing what is in my own best interest or be wealthy enough to pay everything out of pocket.
The "legitimacy" lies in the fact that that is what was politically possible to accomplish. I put legitimacy in quotes because I assume you mean legitimate in the context of some type of moral or ideological sense, which I do not find terribly interesting in this case, where there are many real world constraints at play.
At the very root of it all is the fact that demand for healthcare greatly dwarfs supply of healthcare, starting from the simple fact that changing bedpans is a highly undesirable task and going all the way to the fact that medicinal knowledge is very difficult and costly to acquire. And so politics will be involved in how healthcare is distributed.
You can even go back to your statement of
>from doing what is in my own best interest
99% of people have no idea how to evaluate what is in their own best interest when it comes to medicine. Even doctors outside of their specialty probably do not know, and the tiny minority that do would acknowledge that at some point they are also guessing at the machinations of something complex like the body.
The for profit (and not for profit) labeling is mostly a distraction. Doctors do not treat people without a profit, programmers do not program without a profit, and a managed care organization does not sell its services without a profit.
These 2 big constraints shape how much and what kind of healthcare system we can afford:
-low supply of healthcare relative to demand - requiring a system of allocation of resources
-medicine being extremely difficult and possibility of doctor making mistake or being corrupted requiring second opinion - i.e. doctors and pharmacists employed by managed care organizations
Obviously, everyone would love if everyone could get all the healthcare they could ever want at anytime they want. But our parameters do not allow for that. Back to the original question of why a for profit managed care organization needs to be involved at all? It does not, except politically, that was the solution the leaders agreed upon. I suspect politicians also like MCOs in the middle because it keeps the heat on the MCOs and deflects from them.
We could have gone the NHS way with taxpayer funded healthcare, and the NHS handling all the administrative functions that managed care organizations do. But there was significant political opposition to that, probably because a lot of politically influential classes stood to lose in that proposition. So we have what we have.
Note that to counteract excessive profit incentives, the ACA implemented minimum medical loss ratios and a healthcare exchange so that companies could compete for customers and hence have an incentive to keep premiums lower (presuming the existence of sufficient competing MCOs). Why not just cut all that out and let government deal with it? Because that is what was possible.
> The "legitimacy" lies in the fact that that is what was politically possible to accomplish.
Regulatory capture[0] narrowed the possible to only solutions involving for-profit health insurance corporations. If you don't find a form of corruption to be of interest here, I'd be especially interested to know why.
I can see it being possible to have had some effect, but I do not see having been a major force. As far as I remember, Republicans did not want to expand access to healthcare at all if you did not already have it due to being very poor or old. Many Democrats wanted to expand taxpayer funded healthcare, but they did not have the numbers to get it passed.
Hence a compromise had to be reached. Getting taxpayer funded healthcare administered by the federal government simply was not an option, and I have not seen evidence that it was because the health insurance business was lobbying every Republican.
What I find more likely is that the more complex you make a system, the more you can engage in price discrimination via price obfuscation. A straight taxpayer funded healthcare option would have immediately impacted the bottom line, since government expenditures visibly go up, and would not allow a way to discriminate to those who receive the healthcare.
The compromise, however, allows for all sorts of games to be played. Such as allocating more and better healthcare to older people in comparison to poorer people. This is accomplished simply by having different reimbursement polices in Medicare (old people, strong voting power) and Medicaid (poor people, weak voting power). Medicaid is also further broken down into being administer 50 different ways by 50 different states.
Then you have employer self insured plans doing things the way they like, and employer subsidize plans doing things the way they like, and church plans that do not even provide healthcare. Basically, a way to expand healthcare in a way that still disproportionally allocates healthcare to richer and/or more politically influential people, but helping the others a little bit.
At least we got the metal levels and healthcare.gov out of ACA so there is some ability to compare insurance products.
And at the end of the day, even if you took away the cut that MCOs take for administering all this healthcare, it would mostly save around 5% to 10% (the profit margin plus savings from redundancies). MCOs currently pay out 75% to 80% of all premiums, and profit 5% or less, which leaves 15% to 20%, but the government would have to duplicate many of the functions of the MCO.
Even in a taxpayer funded scenario, I would bet the doctor is going to have to get approval from the system to provide a treatment above a certain cost.
> Even in a taxpayer funded scenario, I would bet the doctor is going to have to get approval from the system to provide a treatment above a certain cost.
That happens due to scarce resources. Most often in developing countries. Where I live, there are places doctors work at that barely have water for them to wash their hands. Ordering an MRI is a big deal.
I refuse to believe this would ever be a problem for the US.
I do not know what to tell you other than "the US" expects many of its school teachers to procure classroom supplies themselves and it is a debate on whether or not to provide nutritious meals to kids in school without payment.
We have a special visa for doctors willing to live in undesirable areas of the US for many years. There is even a website for it:
And now to meet demand for doctors without having to pay for more doctors, most states have allowed a Nurse Practitioner or Physician Assistant to basically practice as a doctor where a doctor just oversees their clerical work. So if you have lesser insurance coverage or live in an area with insufficient doctors, then you may see an NP or PA who is far less qualified than a doctor.
> In fact, quite a few of the stipulations of ACA make health insurance premiums explicitly a tax from the young/healthy to the old/sick.
Why not make it official then? Why not end this "insurance" thing and start funding hospitals with taxpayer money? The US is absolutely rich enough to do it.
>>>>>The patient and doctor are free to negotiate a deal that avoids third parties such as the insurance company.
Just like im free to negotiate a deal for some stock of TLSA directly from Musk, and not buy it via 401k.
On top of the transaction cost of getting elon musk in the same room with me, there's a huge difference: 401k purchases are pretax. Buying from Musk is not pretax.
Same is true for a "negotiated" transaction with a doctor, vs buying insurance from employer.
>>>>>Patient chooses insurance to manage their care, because they do not know what they are buying, or how much it should cost.
Wow. Those are some claims. Lets test them. I dont even know how to change the oil from my car. I barely know how it operates, and i couldn't repair one without years of training. Yet anyone with cash can and does buy these $30,000+ machines.
How can something worth $50 - $300 be hard to understand? Also, I have an extremely powerful heuristic to know if its worth it, or not. ( feeling better = return to doctor. Feeling worse = change doctor ). No one needs insurance to buy medicine. Medical insurance is just simply a membership racket, legalized by the govt.
History is not on your side. Medical insurance was an irrelevant, minuscule market until well after ww2. Why its sudden emergence? Government mandates (Medicare + federal insurance mandates to employers, for returning vets)
>>>>>It is very naive and counterproductive to label insurers as the bad guy because "insurers maximizing revenue"
Insurers are not the only bad guy. I'll give you that. But to say they are not a bad guy, is fraudulent or really naive on your part.
So, Who are all the bad guys? Follow the money. Which players are going in acquisition sprees? Hospitals, Insurers, large Pharma, and PBMs.
1) Hospital "nonprofits", such as childrens hopsitals that have the gall to do community fundraising from bake sales while paying CEOs 5M+, while the CEO of the red cross is in hot water for making 500k. [1].
2) Insurers that buy a medical practice in NJ, and then suddently cut off the competing practice from the insurance network, thus grating the newly acquired practice a local monopoly.[2]
Or for a more recent example, take the lobbying to scare Biden's admin & CMS to permanently suspend the Trump administration mandate to force hospitals and insurers to disclose real medical pricing in 2021. [3]
It begs the question on why Covid19 bigcos were giving Biden real time updates on covid19 drug development, while trump -the actual president- was kept in the dark.
I know the bad guys were sweating bullets on that one!
3) PBMs? Creating formularies to favor sweetheart rebates to them, obscuring real cost from patients and regulators, while making patients and employers foot the bill? or
4) Pharma, racking in cash from drug $20 copays without disclosing to customers that they offer the same pills for pennies if you "cash pay" (not use insurance).
Bad guys galore in healthcare. Insurers are most certainly in the podium.
That seems to be the state of US healthcare unfortunately. What used to be an ethical doctor-pactient relationship has turned into a doctor-insurance-patient monstrosity. Doctors actually have limited autonomy. They can't always do what's best for the patient, only what the insurance company agrees with.