On: Mark Cuban: Why US hospitals "don't know their costs"

[MattCruikshank]

My insurance premiums go up on their own. They go up more when I file claims. I'm betting the same is true of hospitals.

[infecto → MattCruikshank]

Of course, that’s how insurance works. My point was there is no calculating needed. You know the risk for each doctor by their malpractice premium.

[grebc → infecto]

I’m not sure that’s how it’s supposed to work.

Every insurer will tell you they calculate all the probabilities and charge you the appropriate premium.

But we all know they just recoup losses next year. There’s no actuarial math going into it.

[MattCruikshank → infecto]

Every prospectus I've ever read, "Past performance is no guarantee of future results."

[infecto → MattCruikshank]

Not sure what you are trying to say? Yes past performance of investments is no guarantee of future results. It’s a pretty good gauge among other factors for measuring risk in insurance though. Imperfect yes but pretty darn good.

Going back to the original comment, your not wrong that hospitals are thinking about malpractice in cost (or should be) my point was that it should be fairly measurable in the base case and tail cases should be few and covered by other riders or self insurance.