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Comment by jawns | Hacker News Reader

> The three companies said they plan to set up a new independent company "that is free from profit-making incentives and constraints."

I wonder if they will be setting it up as a health insurance cooperative, an organizational structure in which the primary goal is to serve its members, rather than to generate value for external shareholders: https://en.wikipedia.org/wiki/Health_insurance_cooperative

It's not at all unprecedented for publicly traded companies to create cooperatives for their employees. Employee credit unions are one example.

Co-ops were part of an early proposal while the ACA was still shaping out, but unfortunately, due to pressure from for-profit health insurers, they were later shot down: http://www.nytimes.com/2009/08/17/health/policy/17talkshows....

As a fan of distributism https://en.wikipedia.org/wiki/Distributism, I would love to see an increase in health insurance cooperatives, and cooperatives in general. Under a cooperative structure, the members/policyholders fully own the company, so it's not beholden to outside shareholders seeking to profit at the expense of its members. Any profits that a cooperative generates are returned back to the members/policyholders in the form of lower premiums, or improvements to services.

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> distributism

Thank you for giving a name to something I have been pondering a lot. I have come to this conclusion by thinking about automation and technological unemployment. If people own land, or productive tools, they can be self reliant and exist without jobs from corporations, or help from the state. Naturally people would organise as a cooperative or a market of services, exchanging services for services, because they have little money and no corporate jobs. Yet they can work, so they can create a kindergarten for children of the neighbourhood, or a medical clinic, or a mechanic repair-shop, or a construction company, and so on.

By combining these skills a neighbourhood, or a city could be self reliant. In the future, with the advent of solar energy, agro-bots, 3d-printing and other empowering technologies it will be even easier to be self reliant. I see this as a better solution to UBI which depends on the state, which is corruptible and the corporations, which are greedy. People would retain their agency, unlike in the UBI scenario, where they would be wards of the state.

There is no purpose to automation that does not exist in the service of humanity at large, but only for a few. Automation must be owned by the people directly. We need to have the means of production in our hands in order to survive. There is one single job the advancement of automation can't take from us - the job of taking care of ourselves! And that's hard work.

Why is this form of self-reliance a virtue? To me, it looks pathological; certainly not something we should collectively be working towards.

Reducing interdependence in human society mitigates systemic risk. It absolutely is a virtue to be collectively working towards.

Systemic risk reduction is one effect of reducing interdependence. What are the others? On balance, are they net-negative or net-positive?

I can't say if it's better or not, but we do know that human organizations function poorly at scale. The larger the group, the more difficult it is to communicate, the easier it is to feel powerless, the more the problems of a large chunk of the group are remote and abstract (and thus ignored/missed/downplayed/deprioritized)

I suspect that you also have more corruption and/or abuse of power because (a) the previous entries all empower sociopathic individuals, (b) you have a larger pool from which to find such sociopaths, and (c) you have more positions of power for said sociopaths to fill.

You have all of these problems in small groups, but many of our policing/accountability systems don't function well in very large groups.

I'm not sure any of your claims are backed up by data. Is our larger society more corrupt? Is it more difficult to communicate?

I could just as easily argue that smaller, more insular groups promote distrust of outsiders and lack of empathy, which might lead to more wars. I have no idea if that's true, but it sounds plausible to me.

In the end, actually examining data is what's needed. Until there are facts to assess, we're just spouting wild conjecture.

> I'm not sure any of your claims are backed up by data.

https://en.wikipedia.org/wiki/Dunbar%27s_number has a decent collection of the research I know of. There is a little hand-waving involved when it comes to "why", but it's notable that multiple researchers over decades disagree about the number, not the base concept. Likewise, studies related to the base concept of the non-technical Brooks Law support the non-linear impact on communication as a group grows (off hand I can't find a study on that, but I know I've read of multiple).

Edit: Also https://www.psychologytoday.com/blog/how-risky-is-it-really/... points out some research about the distance/abstractness I mentioned.

Anecdotally, plenty of governing and/or economic systems (e.g. communism) have historical success in small groups and no examples of success in large groups, but that's a completely different kind of evidence.

The corruption/abuse item is not part of the research, which is why I separated that as "I suspect" Given the above, and what we know about leaders (executives, politicians) and how sociopathic tendencies are an asset to personal success I find it very plausible but I have no actual evidence, thus "I suspect".

> I could just as easily argue that smaller, more insular groups promote distrust of outsiders and lack of empathy

You could, and I'd actually be interested to see any research on the topic because I've not thought about that one but it does match our general experiences about exposure and tolerance to social differences. That's orthogonal to my point though, as I was only addressing internal workings, not interactions between groups.

> The corruption/abuse item is not part of the research, which is why I separated that as "I suspect"

My main point was that the theory was labeled as something you suspect, but the evidence you listed to back up that theory sounded like it was being presented as fact. You've provided resources to back up the claim, at least to some degree (as you note), which is what I was looking for, so thanks. :)

> You could, and I'd actually be interested to see any research on the topic because I've not thought about that one but it does match our general experiences about exposure and tolerance to social differences.

I don't have any, but I also would be interested to see it. I was using it as an example of something that sounded true and that I suspected was true that I had no real evidence of, and thus should be hesitant to assert as true. Unfortunately, by its nature that makes it interesting to a certain type of person, so it ends up teasing us. :/

I'm upvoting you just for engaging in this conversation, even though I thoroughly disagree with you. :-)

The "distributism" described above is the dream of virtually every rural community. People choose to live in rural communities because it's a little piece of heaven for them: they are surrounded by people they know, they have clean air, the earth is right beneath their feet, the stars are bright, the pace is slow, and so on. They want to serve their neighbors and receive services from their neighbors. How is that mindset pathological?

I am always encouraged by innovations that help rural folks be more self-reliant so they can work toward their dream of self-sustaining, independent communities.

The problem is that a small community can’t develop or even maintain advanced technology, including that required for sanitation and healthcare.

So, you either choose total independence and low technology or interdependence with other groups and advanced tech.

Certainly. There will always be interdependence and rural communities understand that; that's why they drive modern pickup trucks rather than horse-drawn carriages. Still, they are always looking for ways to reduce their dependence on cities.

Well, at least until we reach the science fiction utopian dream of nanoassemblers that can make nanoassemblers. Then rural communities could truly be independent.

Although that independence would be like a group of proto humans that knew about fire and how to use it, but not how to make it, and thus carefully guarded it and kept it fed, lest it go out.

Do you think that we'll be able to escape making this tradeoff in the future? I don't think it's unreasonable to think that sanitation and healthcare technology will advance to the point that they can be implemented in smaller communities at similar levels of quality that could be seen in big cities.

I hope we will have healthcare services that don’t require advanced knowledge or infrastructure to operate, but we’ll still need advanced tech to produce them.

I don’t see a way around this, since you always have to start from the same raw materials.

Distributism includes the principle of subsidiarity, it doesn't exclude the fact that you need large organisations to produce some technology, just that you should tend towards the smallest organisation that can achieve what you need. Capitalism seems to be tending towards the opposite where the winner takes all.

Wouldn't it also be possible to see that as rural residents putting on a brave face? The general trend has been towards urbanization globally for the past century or more, and relatively few young people growing up in rural communities seem to be interested in staying in them in the US[1].

1: https://www.bloomberg.com/view/articles/2017-06-20/rural-ame...

Too many bad actors involved to have a clear sight. Better to start from a clean slate.

That's not true. Almost every person I know in my generation is working hard to buy a piece of land in a rural community.

While your experience might tell you that the reality is that is simply not true. You're countering a statistically sourced statement with an anecdote.

There are two actually statistics underlying the discussion here, and from my reading both points are right (though disagreeing that we're urbanizing is incorrect)...

1) Our general trend is towards urbanization, humanity is now more urban than rural, and every quality of life index shows cities give more good to more people better.

2) Millennials, hipsters in particular, in American markets with crushing real estate prices have recently begun reverse-migrating away from the cities and to more rural areas with romanticized lifestyles creating some new demographic, and real estate, trends.

In terms of pure statistics we're looking at a sub-group with a different trend than the overall group. Most potatos aren't from my backyard, but those potatoes are only getting prettier while the many thousands at the market are getting uglier ;)

I'm totally in the camp who wants to move back to the Midwest and buy some acreage- my point was mainly that the person I responded to flat out stated that the parent commenter was wrong which is not the case.

Statistical significance aside, blanket statements such as what I responded to are simple, not true when compared to reality. I do not believe that humans can be unbiased when interrupting data to form a conclusive hypothesis. This is why the scientific community has a peer-review process to filter out biases.

However, I will agree that my initial response was lacking and would have been better if not stated at all.

:thumbsup:

And every person I know in my generation is working hard to buy a flat in a major urban center. The plural of anecdote is not data.

Isn't that just a reflection of where jobs are, which is in turn a reflection of our increasing specialisation. I know there are almost no jobs for computer science graduates within ten miles of the village I live in. The choice is to move to the city or work in the local supermarket.

This already exists, and is in many ways a form of communism. Take a look at kibutz's in israel.

I think GP is referencing a type of Commune, where potentially services, possessions, and responsibilities are shared amongst those who live there. America has had communes as well

Communism is where all property is publicly owned and each is given what they need.

A commune is a self-reliant community, likely to be small - individuals need each other. A communist state is still a state, it is not decentralized like a commune, but very centralized. Instead of relying on each other everyone relies entirely on the state.

From a certain perspective I agree, and though I am a free market capitalist to my core, the free market doesn't preclude an organization behaving in a communist fashion; the free market simply doesn't require it. I very much encourage things like this.

You see it in my locality, none of the local farmers own their harvesting machines, as a group they own the machinery collectively. This is still a long way from communism though.

> There is no purpose to automation that does not exist in the service of humanity at large, but only for a few.

There certainly is, to the few that are served. Increased productivity that doesn't require manpower/hours has been captured for centuries.

A capitalist economy provides many incentives to privately hold productivity gains from automation, while providing virtually none to relinquish them to the public.

> [people] can be self reliant and exist without jobs from corporations, or help from the state. Naturally people would organise as a cooperative or a market of services, exchanging services for services, because they have little money and no corporate jobs. Yet they can work, so they can create a kindergarten for children of the neighbourhood, or a medical clinic, or a mechanic repair-shop, or a construction company, and so on.

How is that self-reliant? It’s different from most of the current developed economies, but it’s still division of labour and relying on others for some things.

> Distributism (also known as distributionism or distributivism) is an economic ideology that developed in Europe in the late 19th and early 20th century based upon the principles of Catholic social teaching, especially the teachings of Pope Leo XIII in his encyclical Rerum novarum and Pope Pius XI in Quadragesimo anno.

> According to distributists, property ownership is a fundamental right, and the means of production should be spread as widely as possible, rather than being centralized under the control of the state (state capitalism), a few individuals (plutocracy), or corporations (corporatocracy). Distributism, therefore, advocates a society marked by widespread property ownership.

> Distributism has often been described in opposition to both socialism and capitalism, which distributists see as equally flawed and exploitative. Thomas Storck argues: "both socialism and capitalism are products of the European Enlightenment and are thus modernizing and anti-traditional forces.

https://en.wikipedia.org/wiki/Distributism

So not to be snarky, but how is this anything more than simple "Marxism, minus the parts that don't work with Catholic religion, plus Catholic religion"?

Shared ownership vs individual ownership, I think?

Properly understood, Distributism is capitalism limited by an understanding of the purpose of capital. Just as there is no mathematical system that can prove all of its first principles, so there is no system of capital that can within itself articulate a just distribution of that capital.

The assertions of Distributism are that:

* Everyone has a right to private property (ad contra of Marxism) * That right to private property is not absolute (ad contra of laissez faire capitalism) * Laws should aim for the maximum distribution of the means of production, rather than the optimal throughput of productivity possible with those means (ad contra of if-it-is-not-100%-it-is-not-a-monopoly capitalism)

This is inspired by Catholic principles and promoted by Catholic thinkers, but it is certainly something one can come to without being Catholic.

>Laws should aim for the maximum distribution of the means of production, rather than the optimal throughput of productivity possible with those means

Won't you just get run out by others who are focused on productivity and can beat you in trade and undercut your prices while delivering higher quality?

By a lot of accounts nomadic life was much better than early farm life. Didn't help the nomads in the end though.

Well, achieving the Marxist utopia involves forcing the genuine owners of capital goods ("the means of production") to surrender those to the state, in practice usually requiring imprisonment, execution, and initially a certain amount of genocide to avoid revolt.

Clumsily named, the aspects of "distributism" being lauded here only seem to involve convincing people to partly own instutitions rather than simply transacting with them as a third party. Seems to me that this reading of "distributism" is just capitalism plus a social norm of a bias toward involvement and ownership, rather than just employment and consumption.

> Well, achieving the Marxist utopia involves forcing the genuine owners of capital goods ("the means of production") to surrender those to the state, in practice usually requiring imprisonment, execution, and initially a certain amount of genocide to avoid revolt.

That is Communism, not Marxism.

No, it's the Marxist part that makes it not work, doesn't matter which inspired party adds their flavour. If you want Marx's society (not saying his analysis, especially of his surroundings, was wholely incorrect), it can only be had by force.

I challenge you to convince me to willingly join in your Marxian ideal, until then I will fight it when it comes to my door, like so many in the USSR understandably didn't, comfortably boiled frogs as the record shows them.

> I challenge you to convince me to willingly join in your Marxian ideal, until then I will fight it when it comes to my door, like so many in the USSR understandably didn't, comfortably boiled frogs as the record shows them.

a) I don't have a Marxist ideal, don't put yourself in a defensive position against an antagonist that is not there. I just don't mix up Marxist economic theory with Communism and Leninism.

b) Your view of history is perverse, and insulting to the many people that resisted and were killed off by Lenin & Co when they took power.

> the many people that resisted and were killed off by Lenin & Co when they took power.

Show me the scores of people taking a stand while being placed under arbitrary arrest. Yeah, sure some people resisted, a whole lot more memorable than the millions who walked with their captors straight to the grave. It's not like they didn't resist because they were bad people or something, they just had no tools to deal with any of this, who on earth did?

For the most part, you're taken by night or in transit, and they show up to dig up your trash to find your cherished letters or the wrong souvenir, you're still wondering if all the other people who were arrested did what they were accused of. What does resisting that even look like?

This was all to prove some fantasy of a man with a weak spirit and infinite capacity to look outside himself for fault; and for Lenin and Stalin it was just their ticket into town.

> a) I don't have a Marxist ideal, don't put yourself in a defensive position against an antagonist that is not there. I just don't mix up Marxist economic theory with Communism and Leninism.

I didn't say you had one, really, I said that if one were to be instituted, it seems it could only happen by force. Marx's conclusions are the fundamental source of the most inhumane behaviours of the USSR, the specifics are just gory decoration. It doesn't matter if the dissidents happen to be suppressed by genocide, imprisonment, or exile; only by suppressing the dissidents can you institute the envisioned solution. There is a considerable proportion of society which will simply not agree to have their life's work taken from them. Tell me what the important difference is between a solution which passively requires genocide, and a realized implementation of that solution.

Granted I'm underslept right now, so say whatever, I'll see it when I'm back on earth.

This is a type of utopia that many of us yearn for, but never appears to have worked at the level of large nation-states. I mean, here are some things that are not taken into account:

- People who can not work because they simply can't hold down a job, period.

- Externalities such as neighboring (or even distant) communes dumping wastewater into rivers etc., or polluting the ground, or air... you get the idea. What about natural calamities, such as earthquakes, tsunamis, volcanic eruptions, and such?

- Conflicts over scarce resources. Water, for example. Communes that rely on a common source of water will likely have conflicts. How are they resolved?

- Any commune is exceedingly unlikely to be good at producing all the things it needs. Trade will need to develop. Does 'self-reliance' exclude the possibility of trade?

- How large should a commune be, to enable innovation? Without innovation, there will be stagnation that will harm the commune in the long run.

- How would a commune handle people that are 'different'? How about criminals within and without?

This is not at the expense of the large nation state, it just limits the power of the nation, preferring to push down the responsibilities to the lowest level possible, rather than aggregating up the moment that any benefits can be found from that aggregation.

We live in a world where (to quote GKC [1]):

> Lancashire merchants whenever they like > Can water the beer of a man in Klondike > Or poison the meat of a man in Bombay; > And that is the meaning of Empire Day.

The advantage of centralization is that we can stop the poisoning all at once (because there is only one place doing the poisoning). However, when the meat is poisoned many more people suffer food poisoning than would if the food packaging were distributed.

  [1]: http://www.gkc.org.uk/gkc/books/Songs_of_Education125.html

Probably best to distinguish between "self-reliant economically, but connected to the world economy" vs "closed system". Trying to be self-reliant in terms of physical inputs doesn't work in the oil age. Whereas the various small and micro-states manage to be economically self-reliant while importing staples.

I don't think distributism requires a closed system.

How familiar are you with distributism? It certainly does not advocate for communes! Distributism is merely an (admittedly aspirational) economic system where the ownership of productive property is widespread.

A few of its guiding principles may answer your concerns:

* Subsidiarity teaches that things should be handled at the lowest or least centralized level that is competent to handle them. That doesn't mean that small organizations should be expected to bite off more than they could handle. It may very well be that a giant, multinational corporation is the lowest-sized organization that can handle operating something like an airline, and that is not inconsistent with distributist principles.

* Distributism, as an economic system, is not at all incompatible with things like a strong social safety net. However, it is worth pointing out that if the ownership of productive property were to become more widespread, the need for such a safety net would be decreased.

The problem is around 98% of farmers have to lease their land. Most farmland in the US is owned by a handful of people.

Really want to see a source on this one.

Not sure this fully backs the statistic above, but a detailed USDA report:

https://www.ers.usda.gov/webdocs/publications/74672/60298_ei...

It doesn't clearly state how many farmers lease land, but 39% of acreage is rented.

The 98% statistic appears in the follwing item, but concerns white vs black land ownership, not rental vs. ownership:

https://inequality.org/research/owns-land/

This system already exists in Israel.

There are Kibbutzim, full blown cooperative communities spread across the country (which were the initial backbone of the country but have decline over time). They share income depending on the Kibbutz, but some of these communities are very productive and very well off.

There are also Moshavs that aren’t quite as collective but still cooperative. Everyone in the Moshav shares a fixed piece of land in the community but production and income is controlled by the individual laborer. However, the community will still share costs together, like machinery, supplies, marketing of output.

Both are 70 year+ running models and proven to be successful no reason they can’t everywhere else.

The earth can't physically support the existing human population without great cooperative ventures such as the production of electricity and nitrogen fertilizer. It can't support life at anywhere close to the present day level of prosperity without additional great ventures such as transportation, medicine, telecommunications, money systems, and electronics manufacturing. All known means of operating those ventures depend on the state, including the entitlements granted to corporations.

Giving up these ventures would require such a massive reduction to the quantity and quality of human life, that it would be unacceptable to the vast majority of people.

The Haber process ended humanity's hopes of creating a society based on self reliance.

By every possible quality of life metric, things have been getting better and better for humans.

People have predicted the population bomb many times for hundreds of years, and every time they have been wrong.

Scientists predict human population to peak in 2040 anyway. I think that we can make it till then.

The world supports the current population quite well, right now.

I hope I wasn't predicting a population bomb. What I was suggesting was that the existing population level is sustained by organized human activity at a scale that can't be managed by independent individuals or small groups. Thus a proposed restructuring of society requires a credible plan for maintaining or replacing some specific activities such as the Haber process.

It's interesting to see your thoughts on UBI, how you connect it necessarily to the state. I think this doesn't have to be the case: https://joincircles.net

I am also very much in favor of distributed, self reliant communities. Yet I want to preserve the advantages of a global linked economy.

I hope that Blockchain technology will help us to achieve this.

I tried to capture some of the thought vectors here: https://gist.github.com/AndreasS2501/2dc6c5813f5fd8abc79aad4...

This is something I've been thinking about for a while - what would insurance companies (and even other companies in every vertical) look like with some incentive other than profit? Paying good salaries is one thing, but doing it for the sake of external shareholders is a different case.

Newman's Own is one interesting (and successful) example I can think of that's an otherwise for-profit company acting effectively as a charity. Are there papers/books about how effective this would be in practice?

I'm at a cooperative nonprofit insurance company - https://en.wikipedia.org/wiki/Univ%C3%A9 - basically, it's cheaper and nicer.

Perhaps Vanguard is an example of a mass mutual company that owes part of its success through its formation due to its ability to pass cost savings back to its customers in the form of lower fund fees?

Vanguard took decades to gain any traction and it was managed well enough to ensure it didn't prematurely burn out, and not only that but Jack Bogle spent his entire life evangelizing low-cost in an environment where "cost is no object" was a common mantra.

Not only that but the healthcare industry has extraordinarily high financial and legal barriers to entry.

> Managed well enough

Unlike Amazon and Berkshire, two of the best managed companies humanity has ever created?

> Extraordinarily high financial and legal barriers to entry

Unlike financial companies?

There are extraordinarily high expectations in the finance industry but the only barriers are regulatory compliance (with regards to fiduciary duty) and convincing people to throw money at you.

>extraordinarily high financial and legal barriers to entry.

If there is a company with enough muscle to force themselves into the business, it's Berkshire.

Considering their already extensive ground in insurance and JP Morgan's financial acuity, Amazon is in good hands. I know I'm hoping they encounter some success.

My personal (unproven) theory is that the non-profit model works well for ventures that require very little entrepreneurial judgment, but poorly otherwise. Vanguard basically follows that: they mainly sell index funds, which a well-trained monkey can run.

Similarly, it makes more sense to have a non-profit coffee-buying employee group to buy coffee (at places that don't provide it for free) rather than pay a vendor to bring it in. But that's not because profit-making is an inherent drain on efficiency, but because the "judgment" that those profits are "buying" ... doesn't add much value.

I think you may be thinking about Effective Altruism conceptually but from a corporate rather than individual angle.

USAA would be a classic example

Absolutely. So based on what I know their financial products and customer service is awesome but I doubt if it comes at a price which is lower than the market (even after considering what they give back to its members).

Their insurance risk pool is far more favorable - those in the military are generally more healthy than the general population, and they have pretty much guaranteed income.

From ehealthinsurance.com: Kaiser Permanente is composed of Kaiser Foundation Health Plans (nonprofit, public-benefit corporations), Kaiser Foundation Hospitals (a nonprofit, public-benefit corporation), and the Permanente Medical Groups (for-profit professional organizations).

Our family have been members for over 20 years. I'd rate their health care as "good", but the real benefit is that we have NEVER had a billing dispute, because almost NOTHING is "out of network". On the rare occasions we've needed non-Kaiser health care (such as ER visits while traveling), we just give the bill to Kaiser, and they take it from there.

When the insurer owns the hospitals and contracts all the doctors, customer billing is almost friction-free.

I would think the actual care would be the highest priority for most people. These companies are so closely watched that billing disputes are extremely rare.

Not only that, but Kaiser Permanente was formed for similar reasons. It was to provide healthcare for the employees of the Kaiser shipyards, a major industrial employer.

See also five interesting UK examples:

Healthcare: https://en.wikipedia.org/wiki/Bupa

Media: https://en.wikipedia.org/wiki/Scott_Trust_Limited

Retail: https://en.wikipedia.org/wiki/John_Lewis_Partnership

Finance: https://en.wikipedia.org/wiki/Nationwide_Building_Society

Lots of stuff: https://en.wikipedia.org/wiki/The_Co-operative_Group

This feels like a setup for a broader push into healthcare by these companies. The sector is still growing, Amazon is already working out the pharmacy space. "[F]ree from profit-making incentives and constraints" sounds like the strategy they've used so far to dominate sections of online retail.

They can tackle profit from other angles - sell medical supplies, etc.

I think it would be irresponsible at best for Amazon to tackle the medical supply/device market before they can get their counterfeiting problem under control.

Presumably they wouldn't allow literally-anybody comingled inventory for that. It's trivial for them to regulate requiring first party or trusted party sales for that.

They already sell it: https://www.amazon.com/Professional-Medical-Supplies/b?ie=UT...

It would be irresponsible at best for Amazon to tackle the medical supply/device market before they can learn to ship 20 items from the same fulfillment center on the same day in the same box instead of in 20 oversized but mostly empty boxes.

Fulfillment centers are large enough that shipping them in individual boxes may actually be the cost-effective method at times.

I've also heard they play a bit of a game of tetris to fill truck trailers in a way that completely stuffs them full enough that packages don't move around.

> Fulfillment centers are large enough that shipping them in individual boxes may actually be the cost-effective method at times.

You missed half of what I wrote, "instead of in 20 oversized but mostly empty boxes." The context was in a single order from a single supplier, whose product was already at the warehouse, shipping on the same date, to the same address, for the same delivery date, using the same delivery carrier, of almost identical items that almost assuredly are on the warehouse shelves right next to each other.

> I've also heard they play a bit of a game of tetris to fill truck trailers in a way that completely stuffs them full enough that packages don't move around.

That may be the case, but I am referring to the incorrect packing of boxes not trucks.

It may not be incorrect. It seems that if it was significantly affecting their bottom line it’d be a low-hanging optimization that they’d have tackled by now. FWIW this issue infuriates me also - to a degree

Hard to say without knowing the supplier's volume, the nature of the products, etc., but it's entirely possible given the nature of Amazon's warehouses that those "almost identical items" could be scattered all over.

They could have arrived from the supplier in small batches (or even one-by-one) over time if it's a low-volume sort of thing. Amazon might intentionally spread them throughout the fulfillment center in some situations to expedite packing and reduce the distances their robots have to travel.

They might have just needed twenty boxes to finish the tetris puzzle to send a truck out the door.

> incorrectly packing boxes, not trucks.

From Amazon's point of view, they're doing both correctly.

Their algorithm apparently optimises for packing completely filled tucks leaving the warehouse first, then optimises for minimal packaging second.

If they need a few more boxes of a particular size, to completely fill an outgoing truck, they will split some orders appropriately so that those boxes appear on the conveyor at the right moment.

This means that sometimes you receive an SD card in an A4 size box, because that was the only item that was available when they needed an A4 box to fill a truck - and the algorithm decided that the trade-off was worth it.

I have some medical supplies that Amazon will sell me without a prescription. I used them last time because I neglected to order far enough ahead of time, and the game of tag between my doctor and my pharmacy would have taken too long - Amazon Prime to the rescue! Today I pick up a new prescription at my pharmacy, and I'm curious to know if my insurance copay is less than what Amazon charged. I'm guessing it could go 50-50 either way.

The verdict is in. Amazon with free Prime shipping: $18.90. CVS insurance co-pay: $22.50.

One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates. Tech-focused insurers like Oscar also invest heavily to help guide members toward better care paths, which if done well lead to better care at less expense (for both the member and insurer).

Unrelated: one of the worst parts of insurance is the customer service quality. How does an internal, non-profit insurer staff itself to do this well? If they commit to this even at the risk of it being unprofitable, that would be most awesome —- but I’m skeptical.

You're correct that a profit motive leads for-profit health insurance companies to push back on improper billing and negotiate prices, because whatever profit they are able to eek out goes to its shareholders.

But the same motive applies to co-ops. The member-owners of a co-op don't want their costs to be inflated by improper billing or inflated prices, because if they are able to reduce their expenses, then the member-owners benefit in the form of lower premiums.

In both cases, the shareholders want to get their money's worth, it's just that in the case of a for-profit company, those shareholders are often external investors, but in the case of a cooperative, all shareholders are also members.

For companies like Amazon, JP Morgan, Berkshire, it's blatantly clear they have a massive financial incentive to beat down the run-away cost of healthcare. They've got a million employees all up and down the economic tiers. It's a very big boon to their business, to have a smaller share of cost going into healthcare, where they can instead redirect that money into eg competing for labor with higher wages (especially relevant with the U3 at 4.1%).

Healthcare costs are so bad they're now a large, direct competitor to the Amazons and Berkshires and JP Morgans in a business well-being sense, as resources are finite. I like having these giants stepping up to the plate and targeting the healthcare system on cost. They tend to get their way; if a political rock (eg insurance companies) gets in the way, it'll get moved out of the way.

It reminds me of the 450 hospitals getting together to set up a not-for-profit generic drug company recently -

https://www.cnbc.com/2018/01/18/hospitals-plan-to-create-the...

A non-profit ensurer staffs itself to have high quality customer service by pushing back on improper billing by providers and instead of returning that savings to its members investing it into higher quality employees, more training, and better systems to ensure that hospitality is a paramount concern.

> One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers (doctors/hospitals) and negotiating lowest possible care and drug rates.

The ACA requires insurers to spend 80% of the premiums they take in on direct healthcare costs for their members. Inflated billing and high drug costs are actually helpful if they want to make a nice big profit. To a point, at least - they've gotta find the right balance between profit and people being unable to pay their premiums.

That only applies to the individual market, not employer insurance (small and large group.

Higher medical expenses don’t help. It only creates higher premiums, which members then blame on greed.

There are plenty of legitimate problems with providers, drug laws, and insurers. But insurers definitely don’t benefit from higher expenses.

Actually systemic higher costs do help. An older industry analysis found insurance to be competitive so they only way to grow profits for the industry was to grow costs. The trick is for insurance companies to find ways to get other insurance companies to pay more even if they have to also carry those costs.

AKA, 10% of 2 trillion is more than 10% of 1 trillion.

> One of the benefits a profit motive brings to insurance companies is pushing back on improper billing by providers

And one of the reasons for the most complicated billing system in the world is for-profit Insurance companies.

> And one of the reasons for the most complicated billing system in the world is for-profit Insurance companies.

Not really. In fact, Medicare is responsible for most of the current billing system, not private insurers.

Medicare is relatively simple compared to most insurance companies and their rules.

Insurance providers write custom lines of business for employers per state and allow those employers to customize the coverage however they like. This happens annually with revisions done to exclude or include coverage as the employer dictates.

Insurance companies, and employers, come up with byzantine rules for what's covered, when it's covered, where it's covered, who is allowed to provide care, prerequisites before approving coverage, what brand of products are permitted in treatment, and on and on.

The net effect is that the rules are multi-variant to the point that they cannot realistically be validated or tested by humans. There are entire industries dedicated to maintaining rules management engines specifically for validating policies, coverage, and claims.

> Medicare is relatively simple compared to most insurance companies and their rules.

As someone who's actually had to deal with this complexity and implement software to facilitate it, I can assure you that Medicare is not at all simple, by any stretch of the imagination. It's not even standard or consistent within Medicare within a geographical region, even if you limit the scope to Part A and Part B, excluding coverage provided under Part C and Part D.

> Insurance companies, and employers, come up with byzantine rules for what's covered, when it's covered, where it's covered, who is allowed to provide care, prerequisites before approving coverage, what brand of products are permitted in treatment, and on and on.

This is exactly what Medicare itself does. The private insurers generally structure their terms in ways that are similar to what Medicare does. They're not identical, but it's not like Medicare is some haven of simplicity by itself that the private insurers complicate. Medicare itself is unbelievably complicated and abstruse by itself.

> There are entire industries dedicated to maintaining rules management engines specifically for validating policies, coverage, and claims.

Yes, that's true. And that would be true even if you only looked at Medicare patients.

It's not that Medicare is simple, it's not. It's that there are thousands of private insurance companies each holding thousands of lines of insurance each with their own set of rules comparably complex to Medicare.

Medicare is by volume the larges provider but size is actually a benefit because it means that it's dealt with more frequently and is more familiar to care providers.

A care provider isn't multi-regional, thus when they deal with Medicare it's mostly consistent. The interface is at least similar. However they can have 100 patients with United Healthcare and each patient will have a unique and different line of insurance.

Medicare isn't simple, it's just a small piece of a very big shit sandwich.

> A care provider isn't multi-regional, thus when they deal with Medicare it's mostly consistent. The interface is at least similar.

This is dead wrong. It's easier to deal with a small ha regional insurers than it is to deal with Medicare on the whole. And as I said in the original post, even within a region, Medicare is very heterogeneous.

> Medicare is by volume the largest provider.... Medicare isn't simple, it's just a small piece of a very big shit sandwich.

As you said yourself, it's the largest single piece of the sandwich. It also happens to be the core of it as well. Most of the complexity in the billing process stems from how Medicare structures and organizes its own billing, not the other way around.

This thread reads like you two are talking past each other, are you saying that cptskippy's point about individual lines on the provider side is either nonexistent or irrelevant?

> are you saying that cptskippy's point about individual lines on the provider side is either nonexistent or irrelevant?

I'm saying that the marginal complexity introduced by private plans is actually quite small compared to the complexity that Medicare already creates. Furthermore, the complexity that private insurers introduce is both directly and indirectly linked to the way Medicare structures its billing and reimbursement policies.

Thanks.

> It's not that Medicare is simple, it's not. It's that there are thousands of private insurance companies each holding thousands of lines of insurance each with their own set of rules comparably complex to Medicare.

They are actually overlapping problems, since some of those private lines are Medicare Part C or D plans (and some are Medicaid managed care plans, and some are both Medicare Part C and Medicaid managed care plans.)

> Not really. In fact, Medicare is responsible for most of the current billing system, not private insurers.

Medicare, Medicaid, Private Insurers, and the need for all of them to coordinate between each other all contribute significantly.

The need for all of them to sometimes coordinate with non-healthcare payers (e.g., property and casualty insurers) for some claims also adds some complications.

I think the causality flows the other way: the system being so complicated to navigate creates huge barriers to entry, which result in huge profits for whoever can navigate the whole system.

Whenever I want to feel sad, I think about how the most brilliant minds of our times are probably making a fortune at such zero sum transactions as gaming the health system and tax code.

Not always - the other way to mitigate billing inflation is to increase premiums (which would explain the last 20 years).

It's both. But there are also laws that limit an insurer's ability to push back. For example, ALL out-of-network emergency services must be covered, including all follow-up work that occurs as part of being admitted due to an emergency.

Out of network means the insurer and provider have not previously negotiated a rate. And emergency services are among the most expensive bills out there.

This is diametrically opposed to the facts. People need to stop making arguments like this about profit driven insurance when our system has the US spend the most per capita amongst modern nations with mediocre results.

Medicare is also more expensive per capita than most modern nations and its publicly funded.

That’s in large part because the costs of healthcare are crazy high, not the cost of insurance.

They are interrelated, yes. But fundamentally we are at a place where providers, especially hospitals, are billing insanely high rates for services compared to other countries.

It's nutty to me that yours is the first comment that I'm reading in this thread that has mentioned that. The provider part of this shit sandwich (to steal a phrase used elsewhere in this thread) is by far the more problematic piece.

When you use a service without paying for it (e.g., television, radio, Yoogle, Facepage, and so on), you are not the customer but the vector to get to the real customer who is paying. No, buying a TV or paying your ISP is not paying for the services you are accessing.

What Americans think of as “health” “insurance” fits this model. Providers are in the business of soaking their customers the various tax-favored third-party payers for all they can. Of course prices rise continually. People are stirred into a frenzy about rising costs and demand that politicians just do something! The insurers get more tax-favored money that providers happily mop up.

My guess is that they’ll build a super HMO.

The way to change the game in healthcare is to eject the legacy bullshit. Own the experience as a vertical, don’t accept Medicare/Medicaid and the price controls that come with it and you slice out a lot of the overheads.

A large problem with this system I can see is it doesn't help those who either 1) don't work there or 2) want to switch jobs. This merely pushes back on health insurance companies which is great but it doesn't fix the general issues that occur when access to healthcare is tied to employment.

It's quite possible they are simply setting up a captive third party administrator company. All of the companies will fund health insurance which will then have benefits designed for employees and care overseen by this third entity which would be a not for profit. This entity would then have to go out and negotiate contracts with providers, drug companies, lab testing facilities etc. Given the size of these entities, they would have significant negotiating power with providers and hospital systems which could keep costs down for members.

Would having an Amazon Prime "Membership" likely count enough to expect to see Amazon offer this to consumers (possibly at enough of a discount to make it competitive with employer insurance)? I would think that having access to medical records to determine that someone needs a few more OTC allergy med suggestions might make this a long term goal of the project. In that same vein, fully expect to see an Amazon Credit Union someday as well and possibly part of a complete "Amazon Member Benefits" bundle.

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