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Comment by vrperson | Hacker News Reader

But if you are insured, does it matter how expensive it is?

Here in Germany we have public insurance and private insurance. If you have private insurance, you pay for health care yourself and then get the money back from the insurer later on. So you see what is actually being charged, and it is expensive.

If you are on public insurance, you never even see the bills. Often the private insurance actually has to pay for the public insurance, as health care businesses would be unable to survive without the extra money from the private insurance people.

Maybe if you see the bills because you are privately insured, they seem expensive. But perhaps they just reflect the actual real costs.

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> But if you are insured, does it matter how expensive it is?

yes...

I have what's called a "high deductible" plan, which means I pay 100% out of pocket until I rack up $1350 of medical bills in a calendar year. after that I only pay 10% until I hit a total of $2700. $2700 would not be catastrophic to my financial life, but it creates a moderate incentive to shop around on price.

But will health care providers adjust to your insurance?

Here in Germany, you get treated differently in some places if you have private insurance. I have actually avoided private insurance because I worried about too many unnecessary treatments (not sure if that was a good trade off - maybe if one day I'll get seriously ill, I'll regret that choice).

A bit annoying is that often the doctors won't even tell you that they are not suggesting a certain treatment because it wouldn't be covered by public insurance.

But what I mean is, possibly your treatment will somehow get cheaper once you are in the second stage of your insurance plan?

> But will health care providers adjust to your insurance?

most health insurance plans make a distinction between "in network" and "out of network" providers. "in network" basically means your insurance has already negotiated favorable prices with that doctor. so the simple answer to your question is yes. if the doctor is "in network" they will probably charge you less than they would charge an "out of network" patient. if I go to an "in network" doctor but haven't used up my deductible yet, I still pay the "in network" price. if you get a very large bill, I suspect there is further negotiation that takes place behind the scenes.

> A bit annoying is that often the doctors won't even tell you that they are not suggesting a certain treatment because it wouldn't be covered by public insurance.

in my experience, US doctors usually treat the details of insurance coverage as the patient's responsibility. the doctor probably doesn't know exactly what is/isn't covered by your specific plan, so I doubt that they would change their recommendations based on your insurance. a good doctor will certainly be sensitive to the fact that costs matter, so they might let you know that a cheaper generic drug exists or suggest that you try a certain treatment first because it is cheaper.

aside from the cost, I don't think there's any downside to having private insurance in the US.

Even when the costs don't matter to an individual with insurance (though they usually do because most insurance is not all you can eat) they affect the overall quality of the whole system. For example, the U.S. delivers less care for more money overall than other nations because insurance companies, corporate hospitals, pharmaceuticals and care givers are largely not controlled in rent seeking behavior.

This means a greater share of GDP goes to pay for worse health outcomes. The cost of that lost GDP is measure in opportunity costs. That is GDP that could go to education, infrastructure, social programs or simply more savings for the median citizen.

Are you sure the US health care system delivers less care? I've read data about the health of the nation which seems bad compared to other countries (in relation to wealth). But I don't think that is automatically the fault of bad care. For example, if cheap access to food and cars make people fat, leading to bad health outcomes, it would not be the fault of the health care system.

It could be even worse, and a better health care system could make people be more careless about their health, because they would rely on being treated well enough to survive anyway.

Not saying any of that is the actual case, just that there are many aspects to consider.

As for controlling rent seeking behavior, wouldn't the insurance companies be interested in paying less? I don't see how private insurance facilitates uncontrolled rent seeking behavior?

It is very much a problem with public insurance, when patients never even see the bills.

In general, health insurance is a hard problem.

We have measures that show Americans get less care per dollar. Not necessarily less care overall.

Regarding prices, yes insurance companies do negotiate prices to some extent but that has not controlled prices. See $20 asprin tablets given at many hospitals. There's a ton of reasons our private system has not done better controlling prices. It's hard to shop care. Insurers pass service costs onto employers who pay premiums who aren't consuming the care (the employee is). Medical companies find weird workarounds see medication couponing. I could go on. What it amounts to in the end is exactly rent seeking behavior, whatever the free market should be doing it is not. And there is no clear data that it is functioning more efficiently than a public system or at least a regulated market like Switzerland has.

In the end there's a reason that every developed country in the world other than America controls healthcare prices the same way. The government or a body backed by the government negotiates prices effectively fixing them.

Of course health insurance is a hard problem. No one ever said it wasn't.

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