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Comment by jimrhods23 | Hacker News Reader

We need to get rid of health insurance companies. They are the reason all of our costs are massively inflated.

The same thing is happening in education: universities know that a large percentage of students are getting financial aid, so the true costs are buried in a layer of bureaucracy.

Fees and administrative fees continue to go up and the universities will always get their money.

The students are then on the hook to pay the loan back. If the Universities actually had to worry about students defaulting, they would be forced to reduce costs or they would go under.

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> We need to get rid of health insurance companies. They are the reason all of our costs are massively inflated

This is not correct. Insurance is a very valuable service to prevent high-risk events, and applying insurance is a very hard problem. You need to do economics, operations, fight fraud, etc.

What does create price insensitivity (and thus doesnt allow for the competition that drives down prices and increases value to happen naturally) is that you use healthcare for menial transactions like annual checkups or sick visits. I find it incredible when people complain about the 150U$S annual fee on OneMedical, when a basic check-up visit is billed between 300 and 500 dollars. Or when people get surprised that a cancellation fee for a primary care visit is 100 dollars, when "their copay is only 20 bucks".

In addition, another thing is that its tied to the employer, which means that you dont get to choose the insurance you want. If people had to choose their own insurance, insurances would cater to patients not to companies. This is probably the single most important change to do on healthcare reform, and one thing both Bernie Sanders and Republicans could agree with.

You're misunderstanding the problem. Americans are not being bankrupted by annual checkups. Americans are being bankrupted by cancer and other serious health problems. And this is in spite of being insured. In practice, private insurance turns out not to be, as you put it "a very valuable service."

Given a choice between death and bankruptcy, most people will choose bankruptcy. There is no downward pressure on the cost of medical care because there is no alternative. It's a situation that capitalist market dynamics are just not equipped to address.

A state-run apparatus is the only thing that seems to work.

There are multiple reasons why healthcare is expensive in the US. Life ending or multimillion dollar diseases exist everywhere and the reasonable solution to that is insurance: that doesnt make healthcare expensive or cheap, or care good or bad. If you have a cancer that is estimated cost of care is 5 million dollars, neither private nor public insurance will make it cost less, and someone somewhere still has to decide if its covered or not. You cant have unlimited health care, because it requires human beings to deliver it. (at least today).

> Given a choice between death and bankruptcy, most people will choose bankruptcy. There is no downward pressure on the cost of medical care because there is no alternative

This is a common trope in this debate, but its not an economically sound argument. First of all, people choose this all the time: a european person does not sell their home and get indebted to pay for a trip to the us to get bleeding-edge 1% rate of success medical care for his unique condition. Second, its not medically sound. Medicine is absolutely practiced with economic considerations in mind. Care is not the same in the U.S. than say, an African country with hospital shortages. The doctors recommendation changes based on the patients sensibility to prices (for example, a doctor will not recommend highly expensive vitamins to the unemployed, or wont indulge in expensive out-of-coverage procedures for people who would find great economic suffering for the test alone).

This latter part is a key missing education link that for some reason the public seems to misunderstand. Its strange because in actual education people understand that prices give different qualities, but someone reject the idea that healthcare doesnt behave that way.

I have other counter-arguments to this notion of downward pressure, but fundamentally what makes prices low is competition. Any one would prefer bankrupcy to starvation, but thats not a problem with food isn't it.

I agree, that in a form current insurance companies exists - i.e. perpaid medical discounts plan, they should be removed.

People should be getting insurance from insurable events - i.e. accident, heart attack, etc. Not from routine vaccination, annual checkup, seasonal cold.

High-deductible plans are a hack to get people to pay for more of routine stuff and I think it moves into the right direction.

Except even on a high-deductible plan, the provider bills the insurer, they play their games with the price, and eventually you get a bill.

There is no up-front price. There is no market pressure. You still don't know what you will need to pay until weeks or months later.

That's why I called it a hack and not proper implementation. While what you described is true - patients are hit with "real costs" instead of $10 co-pays and rising premiums. ideally - yes, most minor stuff would be paid out of pocket - market forces would immediately put things in a right place. And for emergencies - leave that to insurances.

Switzerland does this right: there is an annual excess (which patients can choose, typically between $500 and $2500, and which is reflected in reduced premiums if you choose a higher excess) which is paid entirely by the patient, and after that the insurance kicks in for 90% of costs up to another threshold, after which the insurer covers everything.

In this way the insurance is actually an insurance like a car insurance, and not some bastardized medical payment plan where incentives of different parties aren't aligned.

This sounds pretty much what high deductible plans are in the USA. Are there some other differences? Perhaps patients file insurance claims themselves?

> Not from routine vaccination, annual checkup, seasonal cold.

I feel like you lump in a lot of preventative care in that statement. If your routine checkups / vaccination prevent necessary emergency care and thus save money down the line, not incentivization people to do so seems stupid to me. The insurance company would have to pay for it regardless, unless they manage to cut those cases from the body of their insured. That would feel a lot like preexisting conditions to me...

Having individuals pay for vaccinations also ignores the value of lost herd immunity, due to a prisoners dilemma like situation. But this mean vaccinations have to be provided by insurance. Directly funding it though tax money might be a better option.

Lack of vaccination/etc should be a "pre-existing condition". Otherwise, people who know they will be saved will choose to do stupid things, like https://www.nytimes.com/2019/03/09/well/oregon-child-tetanus...

"When the time came for his second round of DTaP, doctors talked with the family about the need for vaccinations. Surviving tetanus, unlike some other diseases, does not offer immunity in the future.

But despite an “extensive review” of the risks, and the benefits of vaccination, the article said, the family declined the second vaccination — or any other recommended immunization."

Maybe it's naive, but I always thought that Medicare played a big role in our inflated healthcare costs. Think about it: the number one demographic using the system has most/all their expenses covered by an entity that doesn't care how much things cost. Doctors and hospitals then price accordingly, and everyone else paying out of pocket gets screwed because the system is priced to favor its biggest users, who never see the bill.

This concept of "Cost shifting" exists, but there is some academic debate if its actually whats happening. Medicare also does something invisible to the patients: it pays the least and has the highest stringent requirements for providers.

You need to be up to code to the last detail, you will be under scrutiny for your documentation, you have no bargaining power and medicare pays 20-50% less to providers than private insurance.

It is also not the same as PPO's (which most employees in HN must have) you will have a lot fewer options for care. (remember, you can only get a doctor that collects a much smaller fee, so forget about swanky offices and convenient locations)

Medicare is very cost conscious. So much so that some care providers would rather not accept it.

Care to explain your logic? Cat repair isn't so expensive even though everyone with a car has car insurance.

Competitive pressure. If your can't be fixed or you don't want to fix it you have alternative forms of transportation or you can purchase another one (either at full price or used). Also, many of us only carry liability.

And it's well known that disreputable repair shops will ask you up front how much your insurance is paying you so they can get the full amount.

You don't need to take a gigantic loan from the government and pay the repair companies for their work.

Even if all the bureaucracy of insurance went away, major operations would still likely be tens of thousands of dollars. How do you suggest people pay for that?

We all do! Something something single payer.

Edit: not sure why the downvotes, that’s the reality of things. If you want a more fully fleshed out thought, here you go:

We would all contribute to the payment of expensive operations via taxes in a single payer system. In the current system we have insurance payments. It’s effectively the same, paying a small fee regularly, to subsidize the costs for expensive procedures for yourself and (surprise) others. What do you think happens if you pay into insurance your whole life and never need an expensive operation? You’re subsidizing others. Otherwise the insurance companies would be out of business.

But with single payer, we cut out companies in the middle pulling a heafty profit for effectively the same system as we could get via taxes.

Better?

> We would all contribute to the payment of expensive operations via taxes in a single payer system.

That's just insurance, managed by the state.

> But with single payer, we cut out companies in the middle pulling a heafty profit

Oh boy. Lets say I concede, for the sake of argument, that government can run a private business with the same efficiency, and that the profits it would make as private are given back to its consumers (healthcare.gov cost almost 2 billion dollars to make, remember that. Or Blue shield is actually a non-profit, and its not gobbling up the space by reinvesting its supposed profits).

To add to that, the profits of healthcare insurances companies are not that large: they have a 6% operating margin, lower than other insurance companies. Cumulatively, the big companies must have around 20~30 billion dollars a year in profits. It's a staggering number, but in the healthspace thats nothing: only the subsidy of tax-exemption for insurance benefits is estimated to be 260 billion a year. You could eliminate that benefit and expand medicaid: but that would help the poor, and wreck the rich and the middle class together, which is often politically unfeasible.

https://www.axios.com/profits-are-booming-at-health-insuranc...

https://www.verywellhealth.com/health-insurance-companies-un...

In Canada, 16% of the money spent on health care is spent on administration; in the U.S., 28%. Tell me again how the free market is more efficient?

The US healthcare market is not a free market. I know this well enough to commit to a challenge: name me any two actors in the space and I can name you how each one is screwing the other one thanks to a law or regulation.

Maybe the problem there is multiple actors rather than regulations.

Sorry? could you rephrase this sentence, I didn't quite get it.

I’d still prefer the state over private insurance companies (Medicare is well run and popular).

As Steve Jobs said about Dropbox, you’re a feature (insurance companies) not a product.

> I’d still prefer the state over private insurance companies (Medicare is well run and popular). And I vote accordingly.

Thats perfectly reasonable, but no need to make a single payer system for that. Just allow medicare to compete in the open market. Thats a much smaller program with a lot less risk.

Unfortunately the chances of such a plan to succeed are nil. Thats why big healthcare reform proposals want to strong-arm the position, with single-payer proposals. Its true medicare is popular, but remember it's free insurance for its patients today. If you eliminated the medicare payroll tax and made it a monthly payment, I assure you old people will not have the same opinion on the topic.

The NHS “competes in the open market”, so to speak - you pay taxes to get free healthcare for everyone, then you can get private insurance which picks and chooses what it wants to treat and dumps complex cases back on the NHS. Routine treatment is also dealt with by some combination of the NHS and private pharmacies (for flu jabs etc), generally speaking.

Unsurprisingly, private health insurance is not very popular here. It’s mostly just something people get through work.

And I’ll remind you that we spend less per capita on our healthcare than the US does. I’m sure that if there was actually demand to meet that spending, private insurance here would happily eat it up - but there just doesn’t seem to be.

If you get private health insurance, do you get your NHS contribution back? Thats what would make it "competing" in the open market. If you have to pay for it no matter what, there is no competition, there is double charging.

There isn’t double charging, because private health insurance universally doesn’t cover the same things as the NHS does, and universally depends on the NHS to work with for anything they think might be too expensive to cover.

Given that we spend less money on healthcare than countries that do have healthcare “on the open market” like you suggest, I’d say this is a system that obviously works.

If there were an imbalance between what those countries provide and what we provide, and people were willing to pay for it, you’d see private healthcare providers successfully taking more money (up to what Americans spend) to make up the gap in service - but they’re not. Do you have an explanation for why that’s not happening?

If there are general practicioners in the private market in the UK, that means their patients pay for the NHS and also for the private GP, thus double charging. Particularly with your primary care provider, continuity is important in medical care, not everything is replaceable like a cog.

> Given that we spend less money on healthcare than countries that do have healthcare “on the open market” like you suggest, I’d say this is a system that obviously works.

Sorry but this is a ludicrous claim. Argentina spends 2% less of GDP than the UK, and 70% of its care is private. And not only that, it gives free healthcare services to other countries, including organ transplants.

Then the private insurers would be incentivized to recruit healthy patients and dump chronically ill customers into Medicare.

I know this because I’ve already heard HR complain about too many pregnancies in a year caused the company contributions to go up.

This is a real economic problem: adverse selection. But universal coverage doesnt solve it, it just makes everyone pay.

That’s exactly what insurance is for, to spread the risk among the entire pool of participants. And the best way to expand the pool as large as possible is with universal healthcare (ie “everyone”).

Everyone pays because everyone should pay.

> Everyone pays because everyone should pay.

But if everyone pays the same you just conceded the entire victory to adverse selection: people that do not participate in a risk pays for the risk in someone else. The most obvious demonstration of this effect is double-paying in countries that have both private and public healthcare services: you pay twice, once for the public you don't use, and then for the private one.

Which country has a parallel public/private healthcare system?

Most countries with public healthcare have a private supplement that build on top of what the national system already provides: in home care, private hospital rooms, dental and vision, and concierge service. I've yet to see a private system attempt to replace a functional public system.

> Which country has a parallel public/private healthcare system?

Most that I know of. Unless the state has absolute monopoly on primary care providers/General practitioners, you will have both systems in place.

> Unless the state has absolute monopoly on primary care providers/General practitioners

Yes, that is what single-payer means. There is no parallel payment. You pay for basic service through taxes. You pay for better service through private. Private insurers like BUPA can only extend healthcare options. They don't replace it.

That system is not inherently cheaper: people that go private pay twice (pay for public through taxes and then pay privately).

I dont think its palatable in the US to make policies that could increase national healthcare spending.

Society has some costs you can’t opt out of.

That a common and fine approach, but that doesnt make it cheaper, it makes it a whole lot more expensive.

From my point of view, lowering the expense is the #1 priority. Expanding coverage, and adding new layers of taxation for it will increase expenditures.

There are also many alternatives to adverse selection, my favorite is high deductible plans.

You realize Medicare Part C and D are entirely run by private companies right?

I am. Part C is optional (Medicare Advantage, akin to an upgraded private insurance plan in European universal healthcare systems), and D is prescription drug coverage that a single payer system can administer as part of its system for all participants.

Part C is not an upgrade, it’s soup to nuts. The gov’t just writes the check to the insurer.

A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits.

We’re splitting hairs. It’s an upgrade in the sense it replaces primary Medicare coverage while also including supplements (vision, dental, and other such coverage).

You're original comment says you prefer government run insurance and give Medicare as an example, but neglect to note that 36% of Medicare is privately run.

Fair point.

Mutual aid, same as any other problem. Presumably if there aren’t the resources or people or they deserve not having kids they won’t. Anything else is hard to justify at all.

What is mutual aid? I haven't heard that phrase before.

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