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Comment by CptFribble | Hacker News Reader

Every discussion on healthcare payment structures in this country is completely asinine.

Healthcare is best managed as a risk pool. The bigger the pool, the cheaper to be in it. The biggest risk pool is everyone. Therefore, we should put everyone in a single pool.

How we manage this is a separate discussion. Private, public, maybe a federally chartered non-profit like the Fed.

But as long as we keep ourselves fractured into thousands of different risk pools, all these discussions about deductibles and HSAs and whatnot are just chasing our own tails.

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> Healthcare is best managed as a risk pool.

No, health insurance is best managed as a risk pool, which, as you say, should obviously be everyone.

But much of health care is not health insurance because it doesn't deal with insurable risks. Your need to get an annual physical isn't an insurable risk. Neither is a one-time appointment with a doctor to see if your headache and runny nose is just a cold or an infection that requires antibiotics. The first isn't insurable because it's a predictable recurring cost; the second isn't because it's a routine service that shouldn't be so expensive that you can't pay it out of pocket.

Health insurance should be focused on the things that are insurable risks: emergency care, hospitalization, etc. Things that aren't insurable risks, like the above, should be handled differently. But our health care system insists on treating these very different things the same, which of course is going to lead to huge inefficiencies and high costs.

While this may make sense from the perspective of why people get insurance (to mitigate a catastrophic loss), it doesn't consider the insurer's incentives. No insurance company will want to underwrite a plan that doesn't bundle routine services, since those clearly reduce risk of complications down the road. A yearly checkup is cheap compared to missing a disease and letting it get worse.

> No insurance company will want to underwrite a plan that doesn't bundle routine services, since those clearly reduce risk of complications down the road

But current plans don't require you to get routine services like an annual physical; they just cover them if you get them. That doesn't make sense if the insurer's incentives that you describe are driving the plan.

Also, these incentives don't seem to be operating in other insurance markets. For example, auto insurance doesn't cover routine maintenance like oil changes or tire rotation.

Maybe we should have two separate kinds of health insurance?

One for true emergencies (like car accidents), and rare life threatening diseases (like cancer before 60).

Another for routine things, but as others have said, routine things shouldn't be so expensive.

I like the idea of structuring it like a term life insurance policy. If you die, you get money, and in some policies you even get some percentage before you die to have fun.

So, if you get cancer or whatever, perhaps you'd have a pool of funds available to you to deal with the disease, and you can use that money how you want, and perhaps even keep the remainder (or a portion of it) to incentivize keeping cost down.

Also, it would make sense for the pool of funds available to someone to be based on remaining years. If you get cancer when you 20 it makes sense to spend a million dollars trying to cure that. If you're 90, maybe it makes sense to treat it but not as aggressively or in as costly of ways.

From the perspective of building a society that you would be willing to be in, assuming you were randomly born into that society without knowing to what parents, I still think many people would agree they'd rather spend heavily on younger people than older.

> Another for routine things, but as others have said, routine things shouldn't be so expensive.

This is basically a subscription. But this is also how health insurance already works in part today. A certain portion of your premium is paying for routine doctor's office visits - the insurance company is basically just acting as a payment processor for this portion of your healthcare expenditure. You could separate it from health insurance, but it likely won't make a huge difference in costs or access to care.

> Maybe we should have two separate kinds of health insurance?

I agree we should have two different types of "plans". The one for emergencies and rare conditions would be insurance. The other would not. :-)

One key objective of the "other" plan (the one that's not insurance) should be to make the actual costs of services visible to the patients, who are the ones in the best position to assess the value of those services to them. One of the biggest inefficiencies in our current system is that people get all kinds of health care services without any idea of what they actually cost. That means nobody really knows whether those services are worth what they actually cost. That's a recipe for huge inefficiency and high costs, and so it's no surprise that that's what we have.

> Another for routine things, but as others have said, routine things shouldn't be so expensive.

But this is not an insurance.

Structuring it as an insurance - as we have done - only makes it a lot more expensive than paying for it out of pocket.

Exactly.

They (auto insurances) provide reduces rates for e.g. driver trainings.

The technical aspect for cars (in Germany) is handled by the TÜV (mandatory bi-annually technical review).

I’m sure they would require you to get routine services if they could.

Car insurance doesn’t cover routine maintenance because they also don’t cover problems that arise from not getting routine maintenance. I’d you neglect oil changes and blow up your engine, they don’t care, they don’t have to pay for it.

What if you neglect getting your brakes repaired and...?

/I'm not sure this means anything, just a thought...

Wouldn't you be more likely to get in a crash if your car were in terrible shape?

Governments may, however, demand standards of maintenance (e.g., Germany).

Most car insurance will cover, but not require, getting window chips fixed before the whole window goes.

They also give discounts based on security measures that reduce the chance of theft.

Sorry, but annual physical exams for asymptomatic adults do not reduce mortality or morbidity and certainly do not "clearly reduce risk of complications down the road"

https://sciencebasedmedicine.org/is-the-annual-physical-unne...

https://sciencebasedmedicine.org/re-thinking-the-annual-phys...

https://sciencebasedmedicine.org/questioning-the-annual-pelv...

http://www.clinlabnavigator.com/questioning-the-value-of-the...

https://www.ncbi.nlm.nih.gov/books/NBK82767/

The idea of the "annual physical" in general is a little odd because there's no standard on what an annual physical actually entails. I've been to doctors that order every blood test under the sun and don't touch me AT ALL to doctors who order zero blood tests but feel up all my organs in detail.

you need to go to both docs apparently, or find one who does both.

So you are saying that detecting early that you have high cholesterol and treats it, or a doctor noting gastrointestinal problems and tells you to get a colonoscopy, or that you have a blood sugar problem noting early onset diabetes - none of these thing will save money long term?

Is it? Here in Hong Kong, a health checkup once a year for 10 years will cost 5000 USD, which is also comparable with the cost of treating a moderately serious disease. Checkups are very expensive, and are not even remotely guaranteed to find some critical diseases.

So I would suggest that prevention is not necessarily cheaper than the cure for insurance companies, and largely their health programs like free checkups or fitness coupons are just marketing.

Preventative measures (e.g. annual physical) can be seen as a form of insurable risk management. It's arguably much cheaper to treat something if it is discovered early on.

If only there were a way to measure that

I might be mistaken, but here (Germany), regular checkups are paid by the insurance on purpose.

The alternative being people not doing the checkups and thereby delaying diagnosis until treatment get‘s really expensive as things get life threatening.

In the end insurance has an interest in people taking regular checkups resulting in early (cheap) action.

Are people required by the insurance companies to get regular checkups?

No. But insurances are (to different degrees) heavily promoting checkups and health/fitness improvement programs.

Some are even handing out coupons and benefits for those joining fitness studies or sports clubs etc.

they do the same thing in the US too, to varying degrees.

It would also be pretty easy to incentivize. Have an annual physical and save $X a month on your premium. We do it for other things like smoking already. Plus many examples in the car insurance world.

That's no different than health insurance companies in the US.

Preventative medicine sounds good, but turns out to have zero or negative effect at scale: https://www.reuters.com/article/us-preventive-economics/thin... Yearly checkups don't do anything.

This is a very interesting perspective that I never thought of before.

>the second isn't because it's a routine service that shouldn't be so expensive that you can't pay it out of pocket.

This is a little dicey. What if my doctor thinks it’s just not a normal cold and he needs to order blood work and ct scan? And that leads to a insurable risk.

There's no reason to try to draw the distinction you're trying to draw. You're starting with ideology and proceeding to practice, which is a bad idea. There's a tremendous benefit to society in providing clean water, and also in providing medical care, for the same reasons.

Preventive medical care generally has a negative cost to society; treating diabetes from the beginning is cheaper than amputating limbs, transplanting kidneys, etc.

Checkups and preventative care are not there for fun. They save money as a whole and in the long run, as other commenters also note.

Imagine everyone was disincentivized from doing a cancer-related checkup, get vaccinated, or check if they have a cold, the flu, or something worse. It is better to spend x now than deal with a crisis (either individual or epidemic related) spending orders of magnitude more.

Insurance works through both poolong *and8 mitigating risks.

Standards of treatment, care, process, and product are all core risk-management practices. As are establishing preventive and public health regimes.

These in fact account for the overwhelming majority of health and longevity benefits since the 19th century.

http://1.bp.blogspot.com/-uTWEATUzgxk/TXQoTibILtI/AAAAAAAAAA...

To be fair, this perspective does assume that people care about the health of society as a whole. If you're willing to let others get substandard care or even die, it may be more optimal for you to have your own smaller, lower-risk pool with better benefits.

Right. And therein lies the rub. The US is quite possibly one of the worst in the world for "Fuck you I got mine" (until you don't got yours). And then there's the cognitive dissonance of people who might have otherwise screamed about "socialized medicine" who find themselves on the unlucky end of a diagnosis and are singing a different tune (or sometimes still singing the same tune, even as they put up a GoFundMe...).

How many other countries in the world consider medical bankruptcy a thing to be accepted and tolerated?

By contrast, would the US be able to stomach denying cutting-edge treatment because it’s too expensive, like the UK? https://www.theguardian.com/science/2017/dec/20/drug-giants-...

That’s what makes me nervous about socialized medicine in the US. I’m absolutely in favor of universal coverage—a healthcare system that maximizes the health of the average productive person. But I worry that Americans lack the cold realism of Brits, and won’t be able to effectively control costs by denying cost-ineffective treatments.

Well, that article talks about blaming Big Pharma for the costs that make it expensive, not the National Health Service.

With the big pool comes big leverage. The NHS effectively said "We're not paying that much", and the pharmaceutical companies decided they'd rather be paid something. Because if someone is not getting treatment, then they're not getting those drugs.

Medicare in the US does this. "This is what we are paying for this drug".

The issue isn't so much this. It's that drug industry lobbies in the US will have far more sway over the politics of this than they would in the UK (or Canada, or Australia, or...).

I definitely don't claim to be an expert on these things. But I have lived in the UK with the NHS, in Australia with its medical system, and now in the US. In addition to that, I've worked as a healthcare provider, and for a Health Benefits Management software company, so I'd at least like to think I have something of a varied perspective.

The very first part of the article explains how the NHS denied coverage for certain breast cancer drugs because it was too expensive. My concern is that the Americans won’t be willing to do that. Here, you see all these articles talking about how terrible it is that families went bankrupt going out of pocket after they hit a $1 million cap. The UK wouldn’t have paid for that treatment in the first place.

You have an admirable faith the American insurance companies don't do exactly the same thing, with much less oversight.

https://www.nytimes.com/2019/02/27/obituaries/carrie-ann-luc...

> Her family said an antibiotic Lucas needed to treat her symptoms cost about $2,000 and her insurance company denied coverage of the medicine, leading her to take a less-effective drug. Lucas, who was allergic to multiple drugs and antibiotics, had a reaction to that medication, Lee Lucas said.

That’s not in the obituary?

My bad, meant to link here:

https://www.denverpost.com/2019/02/28/carrie-ann-lucas-obitu...

Medicare in the US does this. "This is what we are paying for this drug".

That is definitely not true. Part of the prescription drug coverage that was added during the Bush administration was that Medicare could not negotiate drug prices.

https://www.politifact.com/wisconsin/statements/2017/jan/17/...

I have a feeling that without the US market capable of paying a hundred thousand dollars a patient, many of those cost-ineffective treatments never get developed. People could still pay for them out of pocket, but without the guarantee of insurance payments the drug companies likely won’t take the risk.

And I don’t think that’s necessarily a bad thing — if a drug costs $500,000 and keeps my cancer at bay for 6 more months, it provides a high personal benefit from my selfish point of view; but at a high cost to society without much societal benefit. I think you’re right that Americans do lack the realism, but it may become easier if those treatments aren’t developed in the first place.

> but at a high cost to society without much societal benefit.

People are employed and knowledge is gained. That may be $500,000 treatment for 6 months now, but that treatment may be improved and democratized until it evolves into something that is $50,000 for 6 years.

A citizen science model — which is what we de-facto have for anything that isn’t cancer — is more efficient and cost effective.

As it is, if someone finds a new life-saving use for an 80 year old drug, there are suddenly shortages of the old drug while a new, patented analog is sent through clinical trials. See also ketamine and depression.

> People could still pay for them out of pocket, but without the guarantee of insurance payments the drug companies likely won’t take the risk.

this, in my opinion, points out a significant flaw in the rush to privatize just about everything:

there are many many “markets” that are either under-served or not served at all because the rate of profit would be (a) too low to “justify” or (b)none at all.

jmo but, there has to be a balance between for-profit and basic research that won’t necessarily be able to be monetized to the extent many in industry would want...

I’m not necessarily against a for-profit pharmaceutical industry... but I certainly am when the entire cost burden falls on us because the pharmaceutical companies band together to prevent our government from negotiating drug prices at the national level like pretty much every other wealthy nation...

> would the US be able to stomach denying cutting-edge treatment because it’s too expensive

No, we're much better off denying basic ass treatments because there isn't enough money in it.

Of course it does, by rejecting many people from the medical system.

Insurers deny expensive or cutting-edge treatments in the US all the time! You don't have to look hard to find sob story after sob story.

And it makes sense. If a treatment is super-expensive and unlikely to be effective anyway, and that money could be put to better use to help more other people ... It's like how someone who smokes isn't going to get a lung transplant; there's too many others that need transplants and not enough lungs to go around, so give the lungs to the people who will benefit the most from them (generally, people who are young and otherwise healthy). There aren't infinite resources in this world, so in the cases where scarcity comes into play, they should be doled out in the way that creates the greatest good.

Before Obamacare, insurance plans had lifetime limits. So even if you got a really expensive treatment approved, it would potentially push you over your lifetime limit and leave you with no coverage at all.

To clarify, I think you mean lifetime limit for the insurance company, not you.

What do you mean? The limit was on your coverage. Once you exceeded that limit, you had no more coverage.

Right, a limit on how much the insurance company will pay to cover your healthcare expenses

I don’t understand the distinction you’re making.

There was a somewhat common misconception that the limit was per person, not per policy.

Although, the distinction wasn't very meaningful because you could be denied for pre-existing conditions, so if you had hit a lifetime limit on one policy, good luck being able to get another one anywhere else.

Some employers put a limit on how much you pay out of pocket, even below the maximum amount of pocket required by the ACA, almost, but not quite comparable to what you get in countries with socialized medicine or health insurance systems. They essentially assure that medical treatment can't bankrupt you.

Obviously, most people in the US don't have access to such a generous plan, or the amount of medical expenses they can tolerate without going into bankruptcy is below the legal out of pocket maximum (6k/yr individual, 12k/yr family). Hence the GoFundMe pages to raise money for medical treatment.

Yes. BUT the insurance companies knew that you had hit a lifetime limit with another company and would refuse to insure you. You couldn't jump from AETNA to BCBS to CIGNA and get a fresh million dollar limit.

It's weird you think that insurance means they don't deny care, I worked on systems back in the 90s in the US that was focused around rationing. The source of the money is irrelevant since ultimately you have to cap spending somewhere as it's not limitless. The NHS generally does a great job in getting bang for the buck, in fact in terms of treatment effectiveness and longevity it's considered the best in the world.

This is solvable. Rather than just "deny" treatments, the insurer (public or private) can just pay the customary amount for treating the given disease. The rest is the patient's responsibility.

So rich people can still get the latest $500K insta-cure prostate cancer treatment (and they are paying out of pocket for most of it), and the rest of us make do with surgery/radiation.

Private insurance companies do this every single day. So you're worried that the government might do what insurance companies are guaranteed to do. At least the government wouldn't have the profit motive that drives insurance companies to these measures that literally kill people. Your argument is completely out of touch with reality.

> Healthcare is best managed as a risk pool. The bigger the pool, the cheaper to be in it. The biggest risk pool is everyone. Therefore, we should put everyone in a single pool.

No, whether or not expanding the pool raises costs depends on the cost of the added population. If 80% of the population is insured, and they consume an average of $1,000 in healthcare costs each year and the uninsured population consumes $10,000/yr then expanding the risk pool to the entire population will increase the cost of insurance. We saw this happen firsthand when we mandated that insurers take on all patients at the same cost regardless of prior conditions. The population that was added to the risk pool was more expensive than average, thus driving up the cost charged per person.

Universal healthcare isn't a magic wand that makes healthcare costs go down, these plans are affordable for the average person because they are paid for by taxes which are levied at different rates depending on income. I many of these countries if you charged the cost of healthcare per person on people's post-tax income (and adding back in the tax paid for healthcare) they would be paying a greater portion of their paycheck for healthcare than most Americans. The affordability isn't solved by dumping everyone into one risk pool, it's solved by changing the way healthcare is paid for. Furthermore, most universal healthcare implementations don't put everyone in the same risk pool they tax and give citizens funds to spend on healthcare but the risk pools themselves are managed by insurance companies.

Healthcare in the states is asinine, no doubt. But when I see articles like this I have to ask, "why aren't these people making 75-100k using HSAs and FSAs"? They would eliminate many of these scenarios that people are seeing.

There's the elephant in the room that many people are absolutely terrible with money, buying entertainment goods and completely skipping on savings, HSAs, etc that could prevent these media sob stories.

Why should we, the conscientious readers, trust your claim that you know what's best? Cuz it sounds like something that sounds good but which has no verifiable backing.

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