Comment by atomicnumber3 | Hacker News Reader

Comment by atomicnumber3 | Hacker News Reader

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>So if you think you do require some care, just ask the medical practice whether they accept self-pay and then you can decide if it's worth paying or not. If you think it's not, it's unlikely someone else will if they have to pay on your behalf.

Ok, hear me out for a minute.

What if I wanted to pool with several people, so that if any of us had unexpected medical needs, it wouldn't bankrupt any of us. Knowing that most of us would not need it.

And then, since we're all on the hook for each other's general health, we also agreed to share the cost of preventative care, because it was literally cheaper for us to all pay for preventative care than to try to just solo it and then hit the group with the cost of terminal cancer care instead of catching it early and doing a small excision. (and other such examples.)

And then what if we made the pool HUGE, to even further spread out the costs?

Sure wish there was a system that just did that, without trying to also generate insane profits off it.

> Sure wish there was a system that just did that, without trying to also generate insane profits off it.

Health insurance companies in the US must pay 80% of premiums to providers. All their overhead (e.g. their accountants and actuaries and so on) comes out of the remaining 20%. What's left is their profit. People have this fantasy that all the money we spend on healthcare is secretly going to greedy insurance companies while doctors struggle to get by. But insurance company profits are a drop in the bucket.

The real villains are the doctors who recommend expensive MRIs and act like it's a complete surprise that the bill they give you is so high. And then go lobby the government to limit their competition. I would love to have a doctor in france look over my radiology and tell me if I have cancer. But that's illegal, I need to hire an American. Coincidentally, the average radiologist in San Francisco makes $660,000/year (about $400/hour).

Their overhead (e.g. their accountants and actuaries and so on) spend a lot of time inserting paperwork and delays in between hospitals and patients, fighting hospital invoices and fighting patient claims, doing marketing, and any profit the insurance company makes is money customers "spent on healthcare" which didn't end up being spent on anyone's healthcare.

> "Health insurance companies in the US must pay 80% of premiums to providers."

How was that figure decided upon, and why isn't it higher? Why isn't it "pay overheads and salaries, and return the rest to the customers"?

The benefits of allowing people to make money by starting businesses are a separate discussion. I only meant to say that insurance companies are already legally prohibited from making "insane profits".

But to answer your question, there are many people looking to invest their time and money into profitable enterprises. Because insurance is a good that is very beneficial for society, we want people to invest in making it a thing. Therefore, we set up a system where the people who invested in its creation get a tiny fraction of the benefit it generates. There are many areas of life where this works great, like providing food and shelter, and I guess it wasn't obvious that insurance would be an exception for some reason.

The actual minimum medical loss ratio is 85% for most large health plans. In practice most of the large payers are at a higher ratio due to competitive pressures. As to how that figure was decided upon, when Congress passed the Affordable Care Act (Obamacare) they just picked a number that seemed reasonable — it wasn't based on a quantitative economic analysis or anything like that.

https://www.cms.gov/marketplace/private-health-insurance/med...

It's almost as if, then, providers know they can push their rates up, and reimbursement rates go up, since all that means is that premiums go up. And by a stunning coincidence, how much that 20% is goes up.

And then they buy/create PBMs which aren't covered by those limitations, and then force their customers into using them. "Oh, you want a convenient 90 day refill? Sure. If you go through our wholly-owned mail order pharmacy. From your pharmacy? No. You can keep going there every 30 days for your meds."

Yes, you can do that. HealthPartners[0] is such a consumer-governed non-profit. It is entirely opt-in. It is not illegal in America to do that and, as you can see, others have done that.

In HealthPartners' case, they do deny claims despite having the structure you mentioned. I think if you wanted to run such a pooled insurance company that advertised that it would pay any and all claims made to it and would deny precisely zero claims, you could and you would find it very easy to onboard both patients and providers to it, at least so long as its fund was solvent.

0: https://en.wikipedia.org/wiki/HealthPartners

There's nothing stopping you from starting your own non-profit health insurance company. If greedy health insurance companies are really the root of the problem, you should be able to out-compete them fairly easily.

You are correct that health insurance companies aren't the problem here. But there are a lot of things stopping you from starting your own non-profit health insurance company. Medical insurance is heavily regulated at the state and federal levels. Launching a new one takes years of work just to get through the paperwork and legal compliance issues.

That assumes the humans will do their best to take care of themselves but given the ability they will be bailed out, they let their health go knowing they don't need to actively take care of themselves.

The outliers drain the coffers

Aren't these basically mutual healthcare providers? We have them in Europe.

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