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Comment by milliondollar | Hacker News Reader

Their solution in the TFA is to focus on straight-through billing through standardization of payment mechanisms, arguing that each physician is paying $100K / year. Of course, this also puts the lie to the insurance companies, who are the other side of the transaction and essentially add another 20% in cost just to pay the bill! (Their loss ratios due to medical costs are about 80%.)

Insurance companies are basically just bill paying services, as almost all employer sponsored healthcare is self-insured by the employer as the risk pool is large enough to take care of the true "insurance" nature of the mutual pooling of risks.

So how do you think insurance companies will react to making it "easier to pay the bill through standardization?"

Chance of movement = zero.

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One of the big lies is that Insurance Companies have an incentive (aligned with the customer) to lower costs.

In fact Insurance Companies have an incentive to pay no more than competition, but for costs to rise. Due to regulated %overhead this is one of the few ways they increase profits every year.

To maintain current inflation adjusted stock valuations (based on earnings and growth) Insurance companies need prices to rise and they are incentivized to produce this outcome. Surprise!

Agreed, the insurance companies are effectively capped on the profits they can declare, otherwise they'll expose themselves to regulation and stricter price controls.

So that's how places like UnitedHealthCare have such exhorbitant salaries and a bloated executive structure. It's the same as colleges, which also have constantly expanding revenues but are "nonprofit". So a vampiric parasitic management class attach themselves to the organization and suck all the money away, while costs soar.

My reaction exactly. This article basically says we can achieve much of the savings of Medicare for all if insurance companies and providers put aside self-interest to voluntarily and in a coordinated manner adopt the aspects of Medicare for all that reduce costs! And if apes had tails they'd be monkeys!

I just started at a health insurance startup that is doing exactly what the article recommends: simplifying billing. Patients pay for procedures "in cash", using a card debiting the insurance company's account. Because doctors charge less for people paying in cash, the insurance is cheaper than traditional insurance.

We're already operating in a few markets. It'll be interesting to see how the traditional insurance companies react once we start significantly encroaching on their market share.

Cut out the insurance company and drop 20% out of the system.

Hope it fixes medical inflation (it won’t) or you’ll be back to the same place in 3-4 years.

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