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Comment by a_d | Hacker News Reader

Whenever someone says that AI and IoT would automate insurance underwriting, I start to fret — because it very quickly starts to imply more and more data collection. This is like pre-crime but for your health. Meaning, you start paying high premiums right away because later in life you might be at a high risk for a specific condition. (I know this already happens for smoking, but that is declared on a form — not by a company sending a drone to spy on you)

Since this is a startup forum — I believe health insurance to be so dark and morbid (with things like companies haggling with living relatives about ventilator care) — there is got to be a better way! (I realize this is more of a lament than a constructive suggestion)

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"there is(sic) got to be a better way!"

There are two better ways - each at a different end of the spectrum.

You can give up entirely on government intervention in health insurance and social "goods" being pursued - everyone is on their own and "healthcare" is a private, personal matter. You can play these agency/incentive games with insurers for better or for worse and you're on your own.

We declare "healthcare" to be a public, common good and completely socialize it. Like roads and fire departments.

What these two different strategies have in common is that both of them are intelligible, reasonable and give people a framework for planning and making long term decisions.

Anything between these two points on the spectrum is unintelligible and unsustainable. You would probably be better off with (the option above that you like the least) than any option between them.

> Anything between these two points on the spectrum is unintelligible and

... very fucking profitable. I mean, the most significant part of "health insurance reform" was to penalize people if they choose to opt out of patronizing these private companies. Some reform!

I'd actually nitpick and say there are sane ways to combine the two regimes. For instance, a base level of common care, and then a functioning market for elective care, additional care, and upgrades.

> I mean, the most significant part of "health insurance reform" was to penalize people if they choose to opt out of patronizing these private companies.

Citation needed for excess profits. As I understand it, now that that requirement has been removed, most companies have dropped out of the Obamacare-market. That seems to me like they were previously only making near the bare minimum that made it worth their while.

Leaving the "Obamacare-market" doesn't imply a health "insurance" company is then operating as some bastion of the free market. The entire sector is rotten, easily demonstrated by providers not publishing a uniform list of prices for every single customer.

In general, a lack of legibility to consumers means they are unable to choose efficiently, which implies that the other party is likely taking an outsized amount of profit. Much of that profit goes to paying the paper pushers who keep the system opaque, but from the consumer's perspective that's little consolation.

> The entire sector is rotten, easily demonstrated by providers not publishing a uniform list of prices for every single customer.

Why does that imply that the sector is rotten? Supermarkets don't publish the amount they pay for food, for example. It's a valid negotiating strategy; it means that offering a low price to one consumer doesn't mean that they have to offer it to another.

I suspect that the care-providers and care-purchasers are too close, and that collusion is a source of the extra cost that Americans experience. (They also have far reduced waiting times, which is a genuine expense).

In the UK, the NHS is funded from taxes. I don't get a choice whether I pay that or not. Mandatory insurance (or an equivalent) for all is a common factor in well-run healthcare systems worldwide. Without it, it's a bit like allowing car drivers to not purchase insurance until after they've crashed.

> I suspect that the care-providers and care-purchasers are too close, and that collusion is a source of the extra cost that Americans experience. (They also have far reduced waiting times, which is a genuine expense).

You've got it completely backwards - the providers and payers are dramatically less connected in the US compared to the NHS in the UK.

In general, the US is moving towards more captitated models, but if anything, this is bringing their incentive structure closer in line to what providers in the NHS already experience.

Sorry, I meant the somewhat cosy relationship between the drug companies, the insurers and the doctors. Care provider was probably a poor choice of words.

Maybe it's because of the newspapers' portrayal of NICE as a death panel here, but I find it hard to believe that they're cosy with anyone.

> Sorry, I meant the somewhat cosy relationship between the drug companies, the insurers and the doctors.

Yes, and this is exactly what I'm talking about.

> Maybe it's because of the newspapers' portrayal of NICE as a death panel here, but I find it hard to believe that they're cosy with anyone.

NICE is many things, but they're certainly not "nice". And where that shows the most is in treatments for complex conditions (especially cancer).

But beyond that: providers under the NHS have dramatic leeway in determining appropriate steps for care (that's inherent to the practice of medicine itself), and they are both explicitly and implicitly expected to consider costs as a factor in that decision-making.

> Why does that imply that the sector is rotten? Supermarkets don't publish the amount they pay for food

Supermarkets do publish the amount they charge people for food. In fact, they often push it to you every week whether you want it or not!

It seems like you're trying to flip around the analogy and apply it to insurance companies rather than medical providers. But my point is that in a functioning market, we would expect there to be cash customers for many services - people who have the means to accept a higher variance for a higher expected value and thus forgo some level of insurance. The lack of uniform transparent pricing discourages this, pushing such customers into buying "insurance" to avoid being ripped off in an uncompetitive consumer market.

And yes, opaque pricing is certainly a "negotiating technique" - right out of Oracle's playbook. This is not a justification though!

Sorry, I was talking about insurance companies. I forgot that you can actually pay cash in America for medical services. It's a totally alien idea to me.

Insurance in America is supposed to be buyers of medical services clubbing together to get a better deal, similarly to people unionising for better conditions.

Allowing people with no negotiating power to purchase services is a bit nuts, but I'd hope the high prices would put most people off. It's like letting people by food on trains. Of course it's overpriced, you're a captive market (sometimes literally in a hospital).

From a USian perspective I think it's worthwhile to think in terms of the "base case" of individuals paying cash - from the perspective of the median person, our "health insurance" system is primarily a way of getting upfront pricing.

I don't focus on the market dynamics to argue against a single payer system (it does seem to tackle the problem better than we've currently got), but to point out the utter hypocrisy of labeling the current regime as anything remotely market-based. As I said above, I'm personally open to a fusion of the two different philosophies when they're sensible together - not the worst of both as we tend to get in the US.

To go with the train analogy - it's like knowing snacks are $8/ea on the train, so you're encouraged to buy a $20 pass for "all you can eat". Then you get hungry and find out that the pass just means you can wait in line for an hour to get one small snack at a time. The pass wasn't actually a solution to the high prices, and making buying the pass mandatory certainly isn't going to help the overall situation. Barring an honest train operator, the only thing that will keep prices down is actual competition - in this analogy the people who plan ahead and pack their own snacks obtained from an outside vendor.

> In general, a lack of legibility to consumers means they are unable to choose efficiently, which implies that the other party is likely taking an outsized amount of profit.

This is wrong. Not only is it possible for an inefficient market to produce a state that is suboptimal for both buyers and sellers, but in fact this is literally the textbook definition of economic inefficiency.

Just because the consumers are suffering from the inefficiency, that doesn't mean that the insurers aren't as well. It's not surprising that neither insurers nor patients are happy with the situation.

It's like when the government tries to address an oversupply of luxury apartments by renting them at full price and re-renting them at subsidized rates to consumers. I forget where this happened, but it was covered on Marketplace a few months ago.

That "solution" is objectively worse than either the extreme libertarian position or the socialist position (though there are economically sensible positions between, this just doesn't happen to be one). It preserves artificially high demand for these luxury apartments, costs taxpayers a ton of money, and around the waste-cycle we go.

> We declare "healthcare" to be a public, common good and completely socialize it. Like roads and fire departments.

1. Lots of places have private roads without much trouble. France's autoroutes are perhaps the most famous example.

2. Many of the world's most successful universal healthcare systems are run at least partially privately. The first point of contact one has with the NHS, for example, is through a general practitioner via medical practice, all of whom are private businesses (free at the point of use).

I don't see why you think a hodgepodge of private and public, as exists in many places already, would be such a problem; I totally fail to see how making everything completely private would be a better solution than that. You'd end up with horrendous lemon-dropping.

> You can give up entirely on government intervention in health insurance and social "goods" being pursued - everyone is on their own and "healthcare" is a private, personal matter.

Except Kenneth Arrow showed market based health care doesn't work. That was in 1963. Since then the US has pursued market based heath insurance for ideological reasons and... that doesn't work without vast government subsidies. The government pays enough subsidies to cover a socialized system.

http://www.who.int/bulletin/volumes/82/2/PHCBP.pdf

> Since then the US has pursued market based heath insurance

I wouldnt consider hundreds of millions of dollars of bribery 'market based'

https://www.opensecrets.org/lobby/top.php?indexType=s

Physicians are one of the biggest reason healthcare is so expensive. Ive seen studies saying physicians account for 10-20% of all US healthcare spending.

Physicians play that off like- Oh only 10%?

But the reality is that the hospital parking lot, the IT, the nursing staff, the electricity, the software, landscaping etc.... all go into that. So 10% of spending being on Physicians is quite high.

Its a cartel that they continue to regulate to make more difficult to be part of.

I genuinely hope medical tourism becomes established because US physicians are corrupt.

The point that I didn't really make is.

Companies that are successful working inside an open market don't bribe the government to provide them subsidies and protection. The system we have is the result of 50 years of market failure and government intervention.

> Except Kenneth Arrow showed market based health care doesn't work.

That is a really disingenuous reading of Arrow's work. Even if you ignore the myriad of ways in which the global heathcare market has changed in the last 55 years and how those affect the US (which is the largest player in the global system), that's still an unjustifiably broad interpretation of his research.

> That is a really disingenuous reading of Arrow's work

You say so, but provide no examples. So your argument is an unsupported conclusory one.

There is a better way, it's called single payer universal healthcare!

Please no, I don't trust the government at all to handle healthcare efficiently. And I enjoy my insurance company through work, its the equivalent to a significant raise each year

DO you trust it with defence, etc.?

To play devil’s advocate, a government’s primary duty has been defense since the dawn of organized government. The U.S. government began in an armed rebellion. Moreover, there’s no reasonable alternative to the government having a monopoly on defense.

I trust it with defense and that's about it. I don;t even trust local governments to efficiently maintain roads

There's nothing stopping companies providing extra private healthcare on top of government provided universal healthcare. It's very common in the UK.

This sounds like another way the rich get access while the poor are stuck with crappy government care.

"Crappy government care" is better than none. And it's only "Crappy" because of the following:

1. Cut funding to govt services

2. Complain about bad govt services

3. Repeat

idk, the US spends more than any country on their education, but we dont produce the smartest students.

Money is minor compared to the culture found in a government agency

> the US spends more than any country on their education

From a general review, it appears we're in the top of spending. There's a good reason why: government services have been privatized and contracted out. So when the govt could have did it for X$, the for-profit private entity charges 2*X$. And this happens across the government at all scales.

I work in a regulated industry and have called three letter agencies over computing issues. 95% of the time, I end up getting another contractor.

> but we dont produce the smartest students.

But we create rich companies who suck on the public teet.

You really found a way to do mental gymnastics around this.

None of this is avoidable. Give money to the government, they are going to give it to their friends.

The problems with governments (notice the plural) is that their activities and expenditures are not public and transparent. Having how the money is flowing, and for what and to whom would clear this up tremendously.

And frankly, when companies get their hands into it, they are going to extract profit from it. Government isnt bound by shareholders or profit-seeking behavior. Doing things at cost is not only acceptable, but expected.

There's times and places where governments providing the service makes a great deal of sense. It's times for libertarian types to actually realize that game theory does indeed show good reasons for govt services.

Or they could work where there is better healthcare. Even as a lot boy at Home Depot the healthcare was pretty reasonable and much better than the governments

> Please no, I don't trust the government at all to handle healthcare efficiently.

If only we had literally the entire rest of the developed world to demonstrate that it's doable, with dramatically lower costs (and yes, that includes the tax portion) and similar health outcomes.

In the entire rest of the world it is much easier to mandate things to the people. It is much harder in America as many voter will see it as a slippery slope against individual liberties. "First its my health care, next its my guns, and finally its my freedom of speech" will be the argument preventing it from occuring

You're moving the goalposts. First "government can't do it efficiently," which is wrong, so now it's "it's not politically palatable."

The first step to making something politically palatable is actually making the case for it and building momentum. If you frame it with political palatability as the metric for whether you actively pursue the policy, the whole discussion devolves into a chicken-and-egg problem.

Found that guy that's never ever had a serious health issue.

I had a few surgeries but nothing major. I enjoy my insurance but don't want to cover people who are overweight and/or lazy

How would you feel if insurers prodded overweight people to exercise and eat better, or else their rates go up or coverage cut altogether?

How would you feel if insurers prodded lazy people to engage in healthier lifestyles?

Empowering insurers could be useful in this regard.

I would feel very good about both of those things. Insurers should be free to incentivize healthy behavior

So, you are fine covering people's stupidity when being active? Or you are only interested in not covering people you perceive as being a moral blight?

> Found that guy that's never ever had a serious health issue.

No, people who have serious health issues are the ones who tend to prefer the more complex treatment options, shorter wait times, and customizable interventions that multi-payer systems have to offer.

People who don't have complex health needs are the ones best served by single-payer systems like the NHS - and the data around treatments for complex conditions (like cancer) backs that up very plainly.

> No, people who have serious health issues are the ones who tend to prefer the more complex treatment options, shorter wait times, and customizable interventions that multi-payer systems have to offer.

This statement shows an utter lack of experience navigating the insurance/medical complex with a serious health problem.

> This statement shows an utter lack of experience navigating the insurance/medical complex with a serious health problem.

It's pretty arrogant to assume that anyone who doesn't support government-managed healthcare has no experience with dealing with serious health problems, which you've done twice in this thread alone.

I'd encourage you not to do that. It doesn't lend itself to productive conversation, and shallow, pithy dismissals are against HN comment guidelines.

Plenty of folks that have complex health needs are best served by single-payer systems. Especially if your complex health needs winds up getting you fired from that employer that pays for part of your premiums, works someplace with crappy health insurance, or pays too much out of pocket to afford proper care.

Besides, you can get those things with single-payer health care by purchasing private insurance on top of the single-payer plan or simply visiting private places instead of the state-funded ones. Here, the state still pays the private places their normal fees and the extra payment from the patient provides bells and whistles, generally including things like shorter wait times in some cases.

Just because you have a serious health issue doesn't mean you need a complex treatment option. A gall bladder can be a serious health issue. All interventions are customized to the patient based on medical standards lest you risk injuring the patient. You also aren't as likely to get the slew of run-arounds when changing health insurance or doctors (migraine sufferers often have to repeat treatments that didn't work or find their medication that works is no longer covered, even if their medical history reflects this). You aren't getting repeat tests because the others were out of a hospitals' network either (happened to my aunt).

The US government already pays more per capita (that is, more for every single living person in the USA) for healthcare than any other nation on earth.

This is entirely WITHOUT universal public insurance, the US could easily save money by making public insurance avalible for everyone.

With public insurance you would have no customer base besides those who are high risk. As a healthy individual there is absolutely no way I would sign up for universal healthcare. Thankfully the government won't be able to mandate it anytime soon as we have a first and second amendment protecting citizens

> As a healthy individual there is absolutely no way I would sign up for universal healthcare.

That's fine, because you don't have to. It's just there if you need it.

> Thankfully the government won't be able to mandate it anytime soon as we have a first and second amendment protecting citizens

The First and Second Amendments didn't prevent Social Security or Medicare. Why would it be any different for Medicare-for-all?

> The US government already pays more per capita (that is, more for every single living person in the USA) for healthcare than any other nation on earth.

The US also implicitly subsidizes all of the research and operations of the rest of the world. Over half the medical research in the entire world is directly funded by the US, and a significant portion of the rest is indirectly funded by sales in the US market. Biomedical and pharmaceutical companies in Europe make the lion's share of their revenues from the US, despite the US being half the population.

You can't compare the US and European healthcare markets without accounting for the fact that they're deeply interconnected, and the biggest beneficiaries of that interconnectedness are, in fact, European patients.

except that every major industrialized nation out there has figured out how to do it well except us. if it works for them it can work for us.

BTW what happens if you lose your job? do you know what the helthcare options for next job are going to be? Heck, your own company can have a few bad quarters and goto a sh*t insurer and you are back to averages.. never ignore the base rates and base rates suck in us healthcare.

> except that every major industrialized nation out there has figured out how to do it well except us. if it works for them it can work for us.

"every other major industrialized nation" has a healthcare system that's deeply interconnected with the global healthcare market, which is itself heavily dependent on the revenue that is generated from the US market.

You can't compare the US to Europe without also factoring the massive benefits European patients get from the high costs in the US.

> You can't compare the US to Europe without also factoring the massive benefits European patients get from the high costs in the US

Luckily for us all the major pharmaceutical companies are public and we can can see exactly where they generate their revenue. Maybe you can show us exactly by how much the US subsidises Europe then. I suspect not by much.

> Luckily for us all the major pharmaceutical companies are public and we can can see exactly where they generate their revenue. Maybe you can show us exactly by how much the US subsidises Europe then. I suspect not by much.

All pharmaceutical companies - including those based in Europe - derive the lion's share of their revenue from the US market, despite the US having half the population.

That's pretty obvious from the relative prices of drugs in the US versus Europe and the quantities sold, but take a look yourself if you want.

> All pharmaceutical companies - including those based in Europe - derive the lion's share of their revenue from the US market, despite the US having half the population.

Again, not true. And easily verifiable. Take Norvatis for example, one of the biggest pharmaceutical companies in the world. Europe 36%, America 34%. [0]

> That's pretty obvious from the relative prices of drugs in the US versus Europe and the quantities sold, but take a look yourself if you want.

It's not obvious at all. Drug spending is a fraction of health expenditure in the US. Just because a drug is expensive it doesn't mean that money goes to the manufacturer. There's a lot of factors involved that increase the price (for profit insurance companies taking a cut as an example) and it's true in all industries.

[0] https://www.novartis.com/investors/novartis-annual-report/no...

> Please no, I don't trust the government at all to handle healthcare efficiently.

Universal healthcare doesn't mean the government handles healthcare.

> And I enjoy my insurance company through work, its the equivalent to a significant raise each year

You can still get your healthcare from your employer with universal healthcare. You'll just be covered in the event of losing your job. Probably paying less for it too.

> And I enjoy my insurance company through work [...]

This is something that always bothered me about the American healthcare system. Isn't it profoundly un-American to depend on your employer for such a personal matter? I know that work is highly valued in the US, but this is almost a slave-like relationship... If you are going to be so dependent on some orgnanization, wouldn't it be preferable to depend on a democratically elected one?

I know that European-style healthcare smells too much of socialism to you guys, but doesn't your current system smell of feudalism?

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