Why don't the insurance companies get together and blacklist the "bad" rehab facilities? I mean, insurance companies want their patients to get off drugs, so that they stop costing money, right?
They do share information via state regulators (insurance commissioner or state department of insurance) regarding actual fraud once it is proven. Proving fraud requires significant investigation. You have to have more going on than a high rate of recidivism for patients wrestling with addiction for them to accuse you of fraud.
Furthermore: Healthcare providers operating in sectors with low barriers to entry should be constantly subject to random audit/inspection regardless of their stats. Do we wait for a customer to report glass in their food before we inspect a restaurant?
So if you're United Health, you can't really improve your profit margins. And if you cut costs, you can't pass the extra value to shareholders.
If you want to give more money to your shareholders, you need more revenue and then more costs and you need to maintain your margin - the extra costs defray the extra money you return to your shareholders.
If you spend an extra $65 million on 'rehab' - you get to give more money to your shareholders.
Here's what's really bad about it, there's no real expectation that the health care improves. The insurance company doesn't care whether the expensive care is better, it cares that expensive care = more money for shareholders.
That's such a perverse incentive it's incredible. Healthcare has become a noose around the neck of America - it's 16% of our GDP and it accounts for about half of all the inflation since 1990.
Here's a blog post explaining the mechanism in the ACA: http://thehealthcareblog.com/blog/2012/02/04/does-obamacare-...
Here's Martin Shkreli saying that insurance companies make more money off expensive epipens than cheap epipens: http://www.businessinsider.com/martin-shkreli-on-epipen-and-...
Change the game, not the players.
Why would the outcome change until the players that get to change the rules change themselves?
I think this is more of a political and ethical corruption problem than a healthcare problem. There is no desire within the industry for competition or a market. See the cable industry for another example.
An (almost) insurmountable problem with the regulatory climate today is if you look at who (generally) set it up, its the same interests that would would lose the most of the playing field were changed. Counter-lobby groups aren't as well funded so they just can't compete using the same tactics.
Can monetary incentives be removed while still motivating people and businesses to work towards the public good (e.g., availability of broad mental health treatments, treating addiction as the disease it is)? In my heart of hearts I hope so, but I'm doubtful that I'll see it in my lifetime.
But I remain hopeful and will do what I can within my capacity as a citizen to forward the idea.
https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/...
you'll be darkly amused to note that the F-22 wasn't very cost-plus intensive and the F-35 is completely cost-plus.
Also note that the F-22 seems to be a more effective weapons platform and at the end of the program, many people thought that we could just kill the F-35 program, fill up our airforce with F-22s and save money.