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Comment by pilotneko | Hacker News Reader

I acknowledge there are issues on the provider side, but it is disingenuous to say that providers set the prices alone. Payers introduce a ton of inefficiencies in billing and also remove money from the system, which negatively impacts care. They implicitly affect care patterns and pricing through denials.

HMOs, for all their problems, have many advantages as well, such as the aligned incentives you allude to.

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So, I don't disagree that there are inefficiencies with private payers, but I do disagree that they're significant, or the reason US costs are so high, or that insurers deny so many services. You can see this for yourself with Medicare's admin overhead. Admin overhead is, roughly, the ratio of money spent by insurers to money insurers pay to providers. Medicare has "low" admin overhead --- but that's in large part because they serve the most demanding segment of the market. If Medicare covered 30 year olds, their admin overhead would mathematically be significantly higher: same money in, much less money out.

I agree with you about the efficiency of HMOs, but customers hate HMOs.

A useful Google search: "National Health Expenditures by Type of Expenditure and Program: Calendar Year 2022". It's a single spreadsheet, and it's really something. It covers insurers (public and private), providers (hospitals and outpatient), facilities, state health care programs, even dental, all on one sheet. The numbers are hard to get around.

  inefficiencies with private payers

Inefficiencies like billions of dollars in overbilling annually?

Providers overbill. Insurers inappropriately deny coverage. This is pretty basic stuff. What would insurer overbilling even mean? You pay a fixed premium.

  What would insurer overbilling even mean?

It would mean something like this:

https://www.nytimes.com/2017/05/19/business/dealbook/unitedh...

Or this:

https://www.sacbee.com/news/local/health-and-medicine/articl...

Your second link is literally Anthem passing provider fees (in violation of their contract, sure!) through to customers. The bills were from providers.

Fuck if I know what's going on between Medicare and UHC. It's a mess. Medicare Advantage is a hybrid Medicare/private system; once again, whatever fees were being passed to Medicare, they were coming from providers. Insurers can certainly inappropriately deny coverage, but they don't generally make de novo charges up. Charges come from providers.

Upcoding scandals, which literally appear to be what the UnitedHealth link you provided was about, were exactly what Anthem was trying to control for with its new announcement.

Medicare Advantage is a capitated program. The provider fees aren't being passed through to Medicare.

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