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Comment by runawaybottle | Hacker News Reader

Right, and how exactly is it advantageous to the insurance company’s to pay a $3500 bill if it really was $1500 (or possibly lower). The racket on the insurance side is if the bill is truly 1500, which they payout to the hospital, but then still go ahead make back $3500 on the premium off the patients.

I don’t know who taught who to be dirty, but it seems like the hospitals and insurers are becoming one in the same (possibly the hospitals learnings from the insurance industry).

My hot take:

Insurers might be on the patients side simply because Americans are living longer, and maintaining the general level of sickness (diabetes, heart conditions, etc). Prices going up does not favor them when medical care is going up, so they are oddly on the average person’s side.

But for the hospitals and doctors, this is all a dream come true. Endless supply of patients, so charge whatever you want.

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The insurance company’s profits are capped at a percentage of what they pay out, so (generally speaking) they are incentivized to maximize the amount they pay out so that they can maximize their capped percentage profit.

Aren’t they worried about costs? They just pass the cost on to the consumer via increased premiums.

That’s the racket.

Insurance companies are definitely not on the average person’s side when it comes to containing costs.

If the bill was $3500, the negotiated price for the insurance company was surely less than $1500. I had my appendix out, the bill was $20k, negotiated price picked up by insurance was $2000.

Price transparency doesn't go far enough. Regular purchasers need to be able to get the real prices, but here we are and we can't even find out what the real prices are, much less purchase at that price.

Healthcare insurance companies and for-profit hospitals divert money from patient care. How is that supposed to improve patient outcomes?

Also, why would you side with insurance company and just assume their lower pricing is correct? You know they add overhead, and they are raking in premiums. The relationship between the payer and provider is adversarial, with the payer holding the stick.

>Prices going up does not favor them when medical care is going up, so they are oddly on the average person’s side.

But it does favor them.

If overall margins after operating cost are a small percentage of the money that changes hands then you want the most money to change hands.

The insured have to buy from someone. Price and quality discovery takes so long that reputations don't really matter.

I read somewhere that insurers and umbrella entities are buying care entities.

That way they can circumvent the care % cap

>but then still go ahead make back $3500 on the premium off the patients.

Insurance pricing is very competitive, and health insurers have single digit profit margins. Most less than 5%.

> I don’t know who taught who to be dirty, but it seems like the hospitals and insurers are becoming one in the same (possibly the hospitals learnings from the insurance industry).

The west coast has had a combination insurer/healthcare provider for a long time, Kaiser Permanente. It’s a very popular organization.

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