Insurance companies are the cost driver of healthcare

Discussion in 'Economics' started by tango29, Apr 19, 2019.

  1. tango29

    tango29

    Maybe this should be pushed to Chit Chat as it is part rant, but also truth.
    I believe the health insurance model we have drives up the costs of healthcare in at least 2 different ways. First of all it is similar to the model of the government getting into the student loan business. As a result of a guarantee to get money from the someone, be it insurance company or consumer, prices can continue to rise unchecked by a free market system. If the insurance company feels a pinch to profit from these rising prices they simply pass it on to the end consumer who pays more in premiums and deductibles. The consumer has no choice or option other than forgoing care, so continues to pay more for services that rise well above the cost of normal inflation, let alone the low inflation rates we have been in for years now. Similar to how Universities continue to raise tuition well above the rate of inflation as a result of guaranteed payments as a result of our government backed loan system that doesn't allow defaults.
    My second thought is how insurance companies rely on the rebate model companies use to lure people into a purchase. Companies know that a large percentage of people fail to follow through on the mail in rebates, and /or use them to pretend a deal is being offered when in reality the price is all ready greater as a result of the rebate and there is no real deal being had. I would love to see a study on how many people actually look at their medical bills and insurance settlement statements and then take the time to get after the insurance company for incorrect settlements, and medical providers for incorrect billings. My guess is as with the rebate model, very few actually follow through and both the medical provider and insurance company pocket the money as profit, and know full well that is what they are doing. As an example of this strategy, we have one child who has been away at school. As a result we file paperwork each year to insure if he needs medical care he can be in network where he lives. Unfortunately every year he has had a reason to go in for medical care, and every year I've had to go through statements and call the insurance company to advise them they processed the claims incorrectly. The reps I have worked with, in every case, every year, have been able to see the paperwork we filed and admit that yes, the claim needs to reprocessed. They can't explain why it wasn't done correctly in the first place. I am on year 5 of this crap with the same insurance company. This year without due diligence the tab would have been tremendous as a result of an issue he is having. Not only is it an apparent scam, it also cuts into my workday, which with trading can be f---ing significant at times.
    Another aspect of the costs being driven up by healthcare insurance is the additional staff medical providers have as a result of dealing with the claims system. The processing, reprocessing and questions from patients about incorrect billings somewhat due to the complexity of the coding system used by the insurance companies in dealing with claims is completely ridiculous. Any number of times I have called in to check on a bill only to find out it needed to recoded for the service provided. I wish I could find the article, but I know I have read at least once, I believe in the Wall Street Journal about the fairly high cost of the system to doctor offices and hospital systems.
    Anyway, that's my hopefully coherent rant for the day. Maybe my wife won't have to listen to me say F--- insurance for the rest of the today.
    Peace
     
    piezoe likes this.
  2. smallfil

    smallfil

    You want costs to go down? The simple solution is encourage competition by allowing insurance companies to provide health insurance across state lines! Car insurance is cheap nowadays because there are so many companies now offering car insurance. That is the way to cut down costs! Obamacare is a huge disaster except, for the few that get subsidies! Everyone else's insurance premiums and deductibles have gone thru the roof. Someone else has to pay for it! There are no free lunches! The same way big screen TVs are dirt cheap now when they are being mass produced. More supply cuts down the cost. Less supply drives costs higher!
     
    murray t turtle likes this.
  3. volpri

    volpri

    Incompetence is rampant in almost every area now-days. In healthcare, especially. And scam and corruption feeds off this. They should simply outlaw ALL insurance. Doctors...medical bills would all come down..car accidents would be settled as they used to be. Insurance is one of the biggest scams and it is a scourge on modern day society forcing a person to have it, or suffer extremely. Only a great depression would damage it in any significance. It is a TOTAL scam that only partially works when you really need it (because it has now become a necessity).

    They should tar and feather the people who dreamed up the idea of fleecing the public via insurance. IMO.
     
  4. Cuddles

    Cuddles

    and water is wet
     
  5. volpri

    volpri

    Or slippery
     
  6. ET180

    ET180

    Doctors are not cheap. It's hard to become a doctor. Lots of school. Lots of expenses. You start practicing often in your mid 30s. Lots of risk -- getting into medical school is not guaranteed. Lots of tests. Lots of competition. Doctors have to be compensated well to justify all those costs and risks. If you go in for an operation, what do you see...not just one (hopefully) highly-specialized doctor, but lots of them. They are all taking risk on you. One mistake and that could be the end of their career. Look around and what else do you see, lots of equipment. That equipment is not cheap. ISRG makes good money on that equipment. On top of that malpractice insurance. Unless it's possible to remove a lot of those factors (or better prevent the need to healthcare), I don't see how healthcare will be cheap anytime soon.
     
  7. monkeyc

    monkeyc

    No, the cost driver of healthcare is the US government. Inflation is caused by too much money chasing too few services. When the government pumps several hundred billion dollars a year into the healthcare industry via Medicare & state subsidies, but does little to increase the supply of services, you get runaway inflation. Add to that the mandate that everyone else must have private insurance, which creates even more demand for services.

    I mean, can you imagine how expensive college tuition would be if the government pumped billions into the education industry? Oh wait, never mind.
     
  8. smallfil

    smallfil

    Medicare is paid for by the men and women who put monies in! Obamacare is a huge sham with a few select healthcare companies getting preferential treatment and huge subsidies from the US taxpayers. So, healthcare premiums and deductibles rise, healthcare insurance companies guaranteed over their losses on non-paying patients and patients with serious illnesses. It does not come free but, comes on the backs of US taxpayers paying those subsidies thru their higher premiums and deductibles! Next will be rationed care because expenses will continue to rise and not go lower! You have sicker patients getting huge subsidies paid for my majority of those with insurance! All the government needed to do is open competition across all state lines to make insurance premiums and deductibles lower but, they have to scrap Obamacare and everyone starts fresh! No more subsidies from anyone. We all have families to support!
     
  9. vanzandt

    vanzandt

    I'm not exactly sure how... but I'd be willing to bet that with the continued evolution of artificial intelligence, in 10 to 15 years we could (in theory at least) make general practitioners obsolete. Could probably be done now in all reality. In fact I know it could. They don't do much when you think about it. They're just gatekeepers really.
     
  10. destriero

    destriero

    The issue is the insurance and pharma lobbying cabals.
     
    #10     Apr 20, 2019
    Cuddles and sle like this.