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Comment by spondylosaurus | Hacker News Reader

One thing that's bit me in the ass repeatedly with insurance claims is that the people approving/denying claims aren't doctors, and the people you have to fight to appeal a denied claim are definitely not doctors. So even if you know the grounds for denial, sometimes the reason is bullshit and flies in the face of the insurer's own policies.

I spent months fighting a claim for mesalamine DR tablets (and getting nowhere) only to discover that the insurance personnel were treating it as a different claim for mesalamine EC capsules—a totally distinct formulation. Any doctor or pharmacist could tell you that they're not equivalent. But they had different approval criteria in the insurance system, and even though I met the criteria for the former (the drug I wanted) they kept denying me for not meeting the criteria of the latter (the drug I did not want).

But those are both oral forms. I think if they'd tried to run the claim as the suppository version, the error would've been more obvious.

View on HN

Even when they are a doctor, it doesn't matter. https://www.propublica.org/article/cigna-pxdx-medical-health...

> Over a period of two months last year, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of 1.2 seconds on each case, the documents show.

1.2 seconds! Well they're sure putting that med school knowledge to use, huh.

Yep. Don't worry, though; if they slip up and do fund your expensive treatments, all of a sudden they have lots of time to focus on you.

https://www.propublica.org/article/unitedhealth-healthcare-i...

> At one point, court records show, United inaccurately reported to Penn State and the family that McNaughton’s doctor had agreed to lower the doses of his medication. Another time, a doctor paid by United concluded that denying payments for McNaughton’s treatment could put his health at risk, but the company buried his report and did not consider its findings. The insurer did, however, consider a report submitted by a company doctor who rubber-stamped the recommendation of a United nurse to reject paying for the treatment.

> But the records reviewed by ProPublica show that United had another, equally urgent goal in dealing with McNaughton. In emails, officials calculated what McNaughton was costing them to keep his crippling disease at bay and how much they would save if they forced him to undergo a cheaper treatment that had already failed him. As the family pressed the company to back down, first through Penn State and then through a lawsuit, the United officials handling the case bristled.

Horrifying. Those "insurers" are absolute scumbags. Poor guy, I feel awful for him.

> Those "insurers" are absolute scumbags

It’s complicated. On the other hand are fraudsters and private-equity owned hospitals maxing the bill button. If the insurer is lax with payouts, it depletes its capital and could be left insolvent. It’s a scummy system more than a system of scumbags. (To be clear, there are scumbag insurers. But it’s reductive to cite that generally, or designate it as the source of the system’s troubles.)

Taking 1.2 seconds to review claims means they are without any question "doing something wrong".

"Remaining solvent" doesn't seem to be the goal, rather "maximising quarterly bonuses regardless of lives destroyed" seems a more fit description.

> Taking 1.2 seconds to review claims means they are without any question "doing something wrong"

Nobody said they aren’t. The point is, given the volume of claims, to do a proper analysis, we’d need a material fraction of doctors doing insurance reviews (instead of seeing patients). So we get a reliance on heuristics.

If you’re lenient, you get targeted by fraudsters. So we get a bias towards denial. (Nobody is getting a material quarterly bonus for denying a few more claims. That nonsense occurs at the level of PBMs and other scale operations.)

> If you’re lenient, you get targeted by fraudsters.

So in this scenario, it sounds like the fraudsters are the medical insurance companies, and the group being lenient are the regulators.

A place taking (on average) 1.2 seconds to review each claim shouldn't be in business.

We have a system where doctors and nurses review medications and treatment options for patients. It's called _the medical system_. You know, the one where I can go see my doctor, talk to them about what's going on, and work with them to create a treatment plan that suits my problems and my goals.

Why do we need to bolt on a secondary system that sucks up an untold wealth of time and money?

https://www.beckersspine.com/orthopedic/54193-fake-orthopedi...

https://www.pbs.org/newshour/health/feds-break-up-1-2b-medic...

https://www.fbi.gov/contact-us/field-offices/dallas/news/pre...

https://www.cnn.com/2023/06/28/politics/doj-health-care-frau...

Small potatoes.

https://www.axios.com/2023/06/14/medicare-advantage-overpaym...

> Overpayments to insurers administering Medicare Advantage plans now exceed $75 billion a year due to aggressive coding of patients' health conditions and easily-achieved bonus payments tied to quality, researchers with the USC Schaeffer Center for Health Policy & Economics found.

Insurers are not the ones coding, it is the healthcare providers. And the government is the one deciding to pay.

If anything, that would mean more claims should be denied.

Looking at the study, it seems like the government made some erroneous assumptions about who would be taking advantage of the policies the government created, resulting in the extra costs. (Third paragraph of “policy context” section).

https://healthpolicy.usc.edu/research/ma-enrolls-lower-spend...

Nope. https://www.nytimes.com/2022/10/08/upshot/medicare-advantage...

> Anthem, a large insurer now called Elevance Health, paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.

> Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.

> Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits. And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud.

That is just clear fraud, and I don’t understand how that is a lawsuit instead of felony charges for everyone involved.

If a business can't handle its own scale without negatively affecting its customers, it should probably stop growing. It's the same issue we see with Google accounts being seemingly randomly terminated.

Since that probably won't happen, heuristic usage should at least come with penalties attached, otherwise the incentives are lopsided. If an airline's overbooking heuristics fail and get you bumped, you either get put on another flight and/or receive financial compensation. If an insurance company's "heuristics" fail and deny a legitimate claim, there should be a penalty. If Google terminates your account because of a mistake, they should pay a fine. They shouldn't be allowed to have their cake and eat it too.

> If a business can't handle its own scale without negatively affecting its customers

The scale probably helps. The point is if every billable decision is medically reviewed for more than a few seconds, a material fraction of the healthcare workforce needs to be diverted from patients to review.

There is simply no solution, given the current industrial structure, to avoid some combination of non-expert, high-speed review without making even stupider trade-offs.

Sounds like we need to replace the structure, given that it's not fit for purpose.

> Sounds like we need to replace the structure, given that it's not fit for purpose

We soundly agree. Health insurance, where risk is pooled, makes sense. Health "insurance," where payments are pooled with a bunch of needless intermediation, is unnecessary.

*(catastrophic) risk pooling

That is not necessarily true.

As another commenter pointed out, average review time is likely a misleading figure, since the overwhelming majority of decisions are made automatically, using predetermined rules engines.

So nearly all decisions take zero seconds, and a small minority take much longer, leading to an average of 1.2 seconds, when in reality, those claims that are reviewed manually take far more than 1.2 seconds to review.

As the other commenter put it: “(most cases take 0 time) + (a low number of cases take non-zero time) = 1.2 seconds on average.”

I think you could make fundamentally the same argument for a great number of the issues in the world today. It's a huge web of banal evils. That doesn't mean that it excuses the behavior of any given cog in that machine though. If we allow blame to be passed on indefinitely because everything is broken then nothing will ever be fixed.

> If we allow blame to be passed on indefinitely because everything is broken then nothing will ever be fixed

Or we can skip scapegoating and fix the system. This is a fundamental lesson from aviation crash analysis: the goal should be a better system, not assigning blame.

I suspect the Germanwings Flight 9525 crash investigation assigns some blame to someone. There's a difference between accidents and deliberate action by motivated actors.

> suspect the Germanwings Flight 9525 crash investigation assigns some blame to someone

Read the synopsis [1].

Blaming the co-pilot would be fruitless. He's dead. There's no chance for retributive justice. And if he's the problem, the problem's solved: he's dead. Nothing more to do. Except, of course, there is. Blaming him is simply an unproductive emotional comfort.

Instead, the report examines the crash's root causes. The "co-pilot’s probable fear of losing his right to fly as a professional pilot if he had reported his decrease in medical fitness to an AME." The "financial consequences generated by the lack of specific insurance covering the risks of loss of income in case of unfitness to fly." The "lack of clear guidelines" on when conditions need to be reported.

Addressing these factors helps prevent the next problem. Blaming the co-pilot actually does the opposite.

[1] https://bea.aero/uploads/tx_elydbrapports/BEA2015-0125.en-LR...

3.2 Causes blames the copilot in its first sentence. They absolutely tackle other failings of the systems and processes for it to get to this point, but there’s blame here, for a deliberate malicious act.

On page 96 of a 110-page report.

Of course the co-pilot is to blame. But that isn’t where the report starts nor ends. It’s incidental to fixing the problem. Those who choose to focus on blame are indeed propagating the root problems that led to the crash. Same in most other circumstances.

Remember, the insurance companies are HAPPY to pay higher prices (in fact they have forced many small ObGyn into more expensive hospital practice) as long as their competitors do too!

Health Insurance companies grow their bottom line by growing the topline cost of healthcare since they're margins are limited.

United healthcare in 2022 had $324 billion revenue (up from $75 billion in 2007) and profits of $20 billion (both up >15% year on year). There is absolutely no risk that they become insolvent.

https://www.statista.com/statistics/214504/total-revenue-of-...

https://www.healthcaredive.com/news/unitedhealth-2022-earnin...

The thing is the insurers aren't writing nasty letters to/suing dishonest providers and CCing the patient, they're dumping the problem on the patient.

I'm assuming that the drs who end up as insruance claim evaluation drs are the Dr. Murphy's of the world who everyone decided it would be better if they weren't actually practicing medicine.

Yes. Which makes it darkly ironic that the end result is them practicing medicine on tens of thousands of people a month each.

In many cases these doctors aren't practicing physicians, iirc the reviewer in the article hadn't practiced for 25 years. They just need someone with an MD to sign off on the denials.

My view is that these people and companies are practicing medicine and should start being held to the standard of care.

Since you have some experience in the field, How do you see your views becoming reality?

Sadly the practicing side and the regulatory side are different enough that I basically don't have much insight into why my views are wrong. (I mean, presumably if my views were right, some enterprising lawyer would have applied the theory already.) E.g., if there is legislation that is acting as a barrier, we could get our representatives to change it. If these folks remain boarded and are practicing outside of the norms and scope, then we could get our medical licensing boards to take action as well.

Afaik, medical review professionals are acting more as expert witnesses (with a crushing case load).

They get privileged access to your medical information and directly impact the treatment plan you get. They are practicing medicine.

They get access to whatever records transmit to the insurance company and they provide a medical opinion on the necessity and adherence to accepted standards of care of given treatments.

That's not the same as what doctors and nurses do.

Seems pretty similar to what a doctor might do.

They get a bunch of test results and a first opinion (from doctor) then they issue a new (second) opinion of no treatment. Doctors give out second opinions all the time; it's a thing patients do when they want to make sure the first one is correct.

Doctors and medical reviewers are looking at the world through two different perspectives.

Doctors have direct contact with the patient and are pursuing leads via testing and originating a treatment plan.

Ergo, "what might work"

A medical reviewer is limited to generated documentation only (though can request more) and is then comparing that to relevant regulations, standards of care, and reasonable/necessary tests.

Additionally, they are a technical expert in recognizing fraud that may be hidden in individually-reasonable, unreasonable-in-aggregate cases.

Ergo, "what can be justified"

Here's the CMS-version explainer, for context: https://www.cms.gov/data-research/monitoring-programs/medica...

Generally, criminalizing malpractice is a counter-inventive to actual system improvement. See doctors. They just add malpractice insurance, and the cost is added to everyone.

If the real concern is that medical reviewers aren't fairly reviewing claims (which afaik, they generally are, contingent on documentation being available), then the supply side should be addressed -- mandate a specific, minimum review time per claim, a standard appeals chain that all insurers are subject to, and staff a centralized, independent (probably under CMS) final appeal arbiter.

The concern for me is that they have a perverse incentive. They aren't interested in maximizing the effectiveness of the care I receive, they are interested in minimizing their own costs. They should be held legally accountable for any negative effects their input has on me.

Based on what legal or judicial reasoning?

If you lack that insight, how do you know your views are well formed enough to not be gibberish?

Or is there a possibility that they could lead nowhere?

Ya there is a Grisham novel about this exact thing. I hope the people involved in Cigna all have their spouses leave them, their children disown them, and then get their car towed.

What's the name of the novel?

https://en.wikipedia.org/wiki/The_Rainmaker_(novel)

Thanks!

What if their spouses and children like having food and health insurance of their own?

How are these guys allowed to stay in business? Hospitals and insurances make many "mistakes" in their favor and leave it up to the patient to navigate this kafkaeske bureaucracy. I understand making some honest mistakes but this stuff is just plain fraud.

The combination of paying of pocket or face horrific medical consequences along with ERISA limiting legal claims makes it unlikely the insurance companies face any consequences to their actions.

Unless you're a wealthy litigation attorney who has friends that will rack up enormous bills as insurance takes it to federal appeals court.

https://www.propublica.org/article/blue-cross-proton-therapy...

One thing that's especially egregious about the situation in RadOnc is that there are plenty of situations where the doctors and physicists have already planned a treatment, billing $xxx per hour, and only then it is denied by insurance, so the hospital counts this as a loss and plans another inferior treatment, increasing the cost, in order to offer a "cheaper" procedure as demanded by the insurance company. The losses are of course amortized to drive up the cost of all treatments while the patients are given inferior care.

It's absolutely infuriating. A friend who is a therapy physicist left the country and went back to work in Canada taking a 40% pay cut because he couldn't stand it anymore.

Fraud is an American norm, that's why lobbyists make big bucks. One of the US Senators for Florida was CEO of a company that was convicted of 14 counts of defrauding Medicare and had to pay $1.7 billion in fines, but he just said he knew nothing about it and went on to become Governor and later Senator for his state.

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

Meanwhile a Democratic Senator from New Jersey is credibly accused of taking bribes from Egypt (evidence included literal bars of gold discovered in his home pursuant to a search warrant), but he refuses to resign.

Corruption is endemic in the US, it just has good lawyers and PR people.

Setting US standards by the citizens of Florida and New Jersey is a bit outside the bell curve...

I'm quite sure I could find examples from every state, I just picked the two most egregious examples that sprang to mind.

I'm sure you could find singular examples in any state. That's how exceptions work.

In Florida, though, my experience has been that corruption is far more endemic and culturally accepted.

There's a reason no president has ever come from Florida politics -- despite being the 3rd most populous state (more people than NY!) -- the skills and acceptable approaches down here don't fly in the rest of the county.

F.ex. the publicly-regulated utility covering most of the state (FPL) financed a third party candidate (up to $3m) in a state senate race. That candidate didn't campaign, but did happen to have the same last name as the incumbent, who had been critical of FPL and pushed reform efforts. The incumbent lost by 32 votes. [0]

Or the (again regulated-FPL-adjacent) takeover attempt of the sole remaining city-run utility company in Florida (JEA) that collapsed in a flurry of federal charges over kickbacks and undeclared secret bonus clauses. [1]

And this is just "business as usual" in Florida.

Shady stuff happens in other states, sure, but at least people elsewhere have the decency to be ashamed about what they're doing.

[0] https://www.orlandosentinel.com/2022/07/22/operatives-workin...

[1] https://stories.usatodaynetwork.com/moneyandpower/home/

Awesome, do Chicago next.

Apparently by a somewhat more objective measurement, the following emerge as most corrupt (ordered alphabetical, no relative sorting):

   - Alabama
   - Illinois
   - Kentucky
   - Louisiana
   - Mississippi
   - New York

https://fivethirtyeight.com/features/ranking-the-states-from...

Although problematically, most are measured as having strong anti-corruption laws, which would likely increase the number of convictions and journalist coverage of corruption (thus, stronger laws = more visible corruption).

Here's probably a more objective number: https://pols.uic.edu/wp-content/uploads/sites/273/2023/11/Co... from https://pols.uic.edu/chicago-politics/anti-corruption-report...

Which produces this ordering per capita: (federal convictions only, in decreasing order, ignoring DC)

   1. Louisiana
   2. Illinois
   3. Tennessee
   4. New York
   5. Pennsylvania
   6. Virginia
   7. Ohio
   8. New Jersey
   9. Georgia

https://www.forbes.com/sites/niallmccarthy/2020/02/19/the-mo...

Thank you, I always thought Hudson County, NJ and Cook County, IL were the most corrupt areas in the US.

I wouldn't be so sure to think that strong laws ~ more visible corruption, but I could be wrong.

>> ...spending an average of 1.2 seconds on each case...

> How are these guys allowed to stay in business?

Afaik, that's exactly how the ACA was written -- there's a ceiling to non-care expenses that insurance companies can include in premiums.

One consequence of this is pushing insurers to be hyper-efficient. One consequence of that is the average case needing to take 1.2 seconds.

Granted, that likely includes a huge amount of happy path cases that flow through automated rules engines, which effectively take no time.

So really, it's more like (most cases take 0 time) + (a low number of cases take non-zero time) = 1.2 seconds on average.

I always felt that every insurance company should report anonymized aggregate percentages for denied claims in some fashion. Not sure how much that would help but it could shine more light on the issue.

An interesting number would be the number of successful appeals after denial. If that number is high it would indicate that they are denying too often.

I think the best analogy I can come up with is your kid touching a hot stove. You tell them not to, but they do anyway, and then when they learn that it really hurts, they stop doing it. Regulations are like that. Regulations are a SUPER hot stove. The employees at the insurance company want to touch the stove as often as possible. They get paid extra the closer they come to touching it. But, as more companies get burned by the stove for failing to meet the regulation's requirements, they learn that being in pain is bad. Then, they stop trying to touch the stove.

So this ProPublica article is great; they say to someone relatively important at the insurance company, "hey, the individuals you wronged are actually well-connected enough to get journalists involved" and the companies get REALLY SCARED, because step 2 after the newspaper article is published is every junior US Attorney in the country tripping over each other to cart them off to prison as quickly as possible. (OK, it's probably a fine. But shareholders do not like your stock when you are routinely fined, and CEOs are paid in stock. See why competent people might get involved when that's at risk?)

You can read this article as "evil companies are evil", but I read it as "evil companies are learning". There will be eventually a day when your entire claims packet is on the same website as your EOBs, and you can click a link to report a mistake. The companies will have to act on your reported mistakes, because a paper trail that says they did something illegal is super bad for the shareholders. It takes time, but journalism like this is what gets it started. If you feel depressed, don't. The system is slow, but the system is working. This is what we have democracy and a free press for!

"There will be eventually a day when your entire claims packet is on the same website as your EOBs, and you can click a link to report a mistake. The companies will have to act on your reported mistakes, because a paper trail that says they did something illegal is super bad for the shareholders. It takes time, but journalism like this is what gets it started. If you feel depressed, don't. The system is slow, but the system is working. This is what we have democracy and a free press for!"

When will that be? In 100 years?

I've had doctors who automatically refile the claim multiple times in a row because of this. I'd get a letter from insurance saying it's denied then 2 weeks later another saying it's approved.

I had an instance where the hospital had coded my spouse's eye issue as "routine" -- so it was not covered by medical insurance, because your vision insurance is supposed to cover that. Our vision insurance wouldn't cover it, because they only permit one visit per calendar year.

The doctor that treated my spouse literally published a paper about the case, so uh... not routine. I got super lucky with the insurance person, though -- she actually called the hospital for me and got them to re-code it.

Had literally the exact same issue with my spouse, but without the luck of finding an insurance person who cared. At the end of the day, it wasn't worth the $200 to continue fighting it (had already invested ~5 hours into phone calls back and forth between the clinic and insurance company).

Infuriating to say the least.

I think the solution to most problems is make the c-suite criminally responsible for errors. Things will resolve themselves

Enthusiastically agree, but considering how much political lobbying comes from health insurance giants I have no hope of it happening in my lifetime.

I think an even better solution is for our society to just admit that health insurance companies can't exist as for-profit entities that have to answer to Wall Street first and foremost.

Think about it. A health care company collects money under the premise that "these premiums you're paying will cover you if something bad happens". If that something bad does happen (and for most people, it never will), that money should be available to pay for whatever happened. The insurer, now concerned about their margins and profits more than providing you the service that you've already paid them to do, just gets to trot out some poorly paid rep with no medical knowledge to override the medical advice of a trained medical professional. Now, you're not only injured, you're paying out of pocket for a service that won't actually do what you've paid it to do. The only winner here is the insurer's C-Suite and stockholders who get to brag on quarterly earnings calls that they've denied tens of thousands of claims (and they even get fiscally rewarded for it!).

In a more modern and honest society we would call for-profit insurers what they actually are: a racketeering organization operating under the guise of fraud.

I agree if you stop at “health insurance companies can’t exist.” Being a nonprofit doesn’t stop you from being parasitic or malevolent.

That does not solve the root problem.

The root problem is healthcare is an extremely complex field, requiring extremely specialized knowledge that takes extreme investment to get. And everyone wants it, the demand is infinite and the demand has no elasticity.

So a buyer of healthcare has a problem. They have no idea what they are buying, and have no idea if the seller is scamming them or incompetent. So you need a second opinion. But as stated above, people who can provide this opinion are few and far between.

It is not like paying $100 to get a second opinion on your car. It is more like paying $500 to $10,000 or who knows how much to get a second opinion.

So the root problem is people simply cannot afford the level of healthcare they desire. Everything else is just papering over that intractable problem.

> They have no idea what they are buying, and have no idea if the seller is scamming them or incompetent.

It's worse than that, important healthcare decisions are often made while you are unconscious, and you just have to pay for whatever choice was made. Not only do you not know what you're buying, you don't even know a purchase is being made.

I am convinced that it doesn't make sense to discuss healthcare as if it is a market. Patients are not "buyers". You pass out, some random person calls 911 and they send a private ambulance, you wake up at the hospital, and now you owe money to the ambulance company. In what sense have you "bought" anything? There has to be more to the definition than just "money is involved". We don't talk about the parking ticket market or the taxation market (just move to a different country if you aren't satisfied with your taxation provider!), and we shouldn't talk about the healthcare market.

That is a good point, but unless people work for free, someone is selling and someone is buying. While you might not have explicitly bought anything, your agent (whether it be family or the government) did buy something.

More broadly, anytime you are dealing with limited resources (including time), you have to be buying and selling (i.e. there are opportunity costs to making a decision).

> We don't talk about the parking ticket market

You cannot buy a parking ticket, so this is not comparable. However, people do often calculate the cost of legally parking versus the probability * cost of potential fines.

>or the taxation market (just move to a different country if you aren't satisfied with your taxation provider!)

This happens all the time, but everyone may not have the means to do it. It was one of the factors for my relocation within the US.

Even businesses use it to determine where to expand or close operations. Warren Buffett mentioned it in his annual letter some years ago.

I agree that someone is buying and selling, what I mean is that it doesn't make sense to talk about healthcare recipients as participants in a market. Obviously firefighters purchase equipment and sell their labor to the government, but we don't refer to homeowners as buyers in a firefighting market. If we forced them to pay a fee after being saved from a fire, that wouldn't somehow constitute a market. The same is true for any other essential government service: we created socialized systems because they can't function as markets.

> You cannot buy a parking ticket

Exactly, just like you can't buy an unexpected medical bill. You still have to pay it though.

The fact that rich people sometimes choose to accept a parking ticket or choose to purchase citizenship in a more favorable tax environment is not evidence of a market, in fact it's the opposite. If 99% of "buyers" are forced to participate but have 0 decision-making power, and a handful of rich people are able to (sometimes) shop around, you are not describing a market.

I think this conversation is going off track. For the purposes of determining prices for healthcare, there exists a market, even if the person receiving the healthcare is not paying.

important healthcare decisions are often made while you are unconscious, and you just have to pay for whatever choice was made

This is a problem, but it's not a major driver of health care expenses. Emergency care is around 5% of total spending: https://www.healthaffairs.org/doi/10.1377/hlthaff.2022.01287

It looks like that figure doesn't include ambulance charges, which is the example I had in mind when I wrote that sentence. It also doesn't include decisions made during non-emergency surgery, which still might be necessary to stay alive even though you aren't in the emergency department. It of course doesn't include medication and followup care resulting from whatever unconscious decisions were made.

Regardless, I don't believe determining an exact percentage is relevant to this discussion. I'm not an economist, but every definition of "market" I can find says something like "a system where two parties can engage in a transaction". If there's a significant chance that one of the parties is unconscious and/or about to die, they are not engaging in a transaction any more than a mugging victim is. 5% is the chance of rolling a 1 on a d20, that is certainly significant.

Can you link one such definition?

> In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange.

- https://en.m.wikipedia.org/wiki/Market_(economics)

> A market is a place where parties can gather to facilitate the exchange of goods and services.

- https://www.investopedia.com/terms/m/market.asp

These don't imply that 'parties' have to be conscious or actively making any decisions?

Yes they do. The words "engage in exchange" and "gather" are active verbs that obviously imply consciousness and consent.

I'll give you another example. The definition of "purchase" is "to obtain by paying money or its equivalent". If I steal money from you while you're asleep and leave a baseball card, is it fair to say you purchased the card? Why not? The definition doesn't say anything about consciousness or decision-making.

Generally dictionary definitions of human activities do not explicitly specify consciousness when it is obviously necessary.

It sounds you might have misunderstood what these terms mean.

People even in a coma 'engage' in multiple activities, such as consuming oxygen, producing carbon dioxide, etc...

And if they are in a hospital, they are taking up a bed and floor space that cannot be used for another patient, that needs to be actively heated/cooled/ventilated and so on.

Their body would literally be engaging with the hospital HVAC systems, especially with 'smart' sensors nowadays that react to room occupants.

Even in a purely financial sense, just because someone is physically incapable of opening their wallet or consenting to a transaction, doesn't mean they can't incur debts, or that other entities aren't acting on their behalf.

> The root problem is healthcare is an extremely complex field, requiring extremely specialized knowledge that takes extreme investment to get. And everyone wants it, the demand is infinite and the demand has no elasticity.

I'm sorry but this statement flies rather in the face of 22 other industrialized modern nations that have managed some type of publicly funded healthcare. The United States being the one that hasn't, along with also being the richest nation in that group, along with already spending the most among that group per patient by a wide, wide margin and getting by far and away the shittiest service in return.

We're also unique in that we're the only nation which hosts slap fights between hospitals and insurers that last months and leave patients wondering as they recover from whatever went wrong for them if they're going to owe $20 or $20,000.

Now, do those other 22 nations have completely perfect healthcare systems? No, of course not. But to say "well it's just too complicated" and throw up your hands is just shit. You know what else those other nations don't have? They don't have people going bankrupt from being in a car accident that wasn't even their fault.

And you know what is also unique among the United States? We're the only ones in that group who have several corporations with fully seated C-suites raking in billions of dollars off a service people literally cannot live without. So it seems to me, removing that part first is a solid first step.

The grandparent comments are discussing the approval or denial of claims, which also happens in countries with other systems of publicly funded healthcare. It might not be called a claim and done by an insurance company, but the government will have some type of system to evaluate appropriate/affordable expenses.

The problem of insufficient resources exists in other countries too, but of course they may be managing it better.

That's not actually how the industry works in the general case. Health "insurance" companies no longer provide much insurance. Instead they mainly just create provider networks and administer claims on behalf of self-insured group buyers (mainly employers and unions). The remaining fully insured market is relatively small.

Health insurers have low profit margins. You can read their audited financial statements for the publicly traded ones. Some are even non-profit. The Affordable Care Act (Obamacare) set a minimum 85% medical loss ratio. The insurers have to cover their operating costs and profit margins out of the remaining 15%. Even if we were to replace commercial insurers with some sort of "Medicare for all" system that would have only a marginal impact on costs to patients and availability of care.

The real drivers here are the big employers. They are the ones ultimately paying most of the bills, and they insist that insurers ration care to control costs.

> The Affordable Care Act (Obamacare) set a minimum 85% medical loss ratio. The insurers have to cover their operating costs and profit margins out of the remaining 15%.

That's also a perverse incentive though. With capped "profit" windows, how is a company to make more money? Well if healthcare costs increase, then premiums need to. 15% of 1.3X is bigger than 15% of X, after all. And healthcare providers are unlikely to object to higher prices.

And what if your insurer gets involved in vertical integration - perhaps Kaiser style, perhaps less formal? Now you get to reduce the actual cost to you (the insurer) by removing the middleman, and you get increased profit by keeping the price the same. It might show up on a different ledger on your books, but nonetheless...

> And what if your insurer gets involved in vertical integration - perhaps Kaiser style, perhaps less formal? Now you get to reduce the actual cost to you (the insurer) by removing the middleman, and you get increased profit by keeping the price the same. It might show up on a different ledger on your books, but nonetheless...

Regulators are not this dumb or corrupt.

This is not a big money making business, as evidenced by Buffett/Bezos/Dimon’s foray failing:

https://www.latimes.com/business/story/2021-01-04/buffett-be...

UNH stock has doubled since 2020. Someones making big money.

Because the risk of removing ACA legislation is gone. It’s a company with very reliable revenue that will keep up with inflation with relatively low liability.

And despite that Unitedhealthcare has grown from ~$70 billion revenue in 2007 to $320 billion in 2022 and is making a $20 billion in profit (which I'd argue is a pretty healthy profit). So I guess the health insurers are just working around the system.

You're mixing up UnitedHealthcare with it's parent publicly traded company UnitedHealth Group. They sell other services and technology products unrelated to medical insurance, and those contribute a lot of the net profit. Medical insurance is a high volume, low profit margin business.

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000731766/0...

It is reasonable to criticize insurer profits but overall those are only a small part of much larger systemic problems in the US healthcare system. Even if profit margins were somehow cut to zero that would have only a marginal impact.

The real drivers here are the big employers. They are the ones ultimately paying most of the bills, and they insist that insurers ration care to control costs.

Are US costs reasonably described as well controlled?

Certainly not. But without that pressure from large group buyers, costs would be even more out of control.

> A health care company collects money under the premise that "these premiums you're paying will cover you if something bad happens"

That's not the premise of insurance, though. The premise of insurance is that a large group of people pools their money (through paying premiums), out of which the people in need of assistance get paid. It's not that you'll be "repaid" your premiums in services. It's pooled risk, not a kind of savings or investment.

In order for it to work financially, most people have to never have claims in excess of what they paid in. The whole point is to be able to cover exceptional and rare disasters.

I think one of the ways that health insurance (at least in the US) has gone horribly wrong is that it became a means to pay for routine medical things rather than just exceptional ones.

> I think one of the ways that health insurance (at least in the US) has gone horribly wrong is that it became a means to pay for routine medical things rather than just exceptional ones.

This is solved by high deductible health plans.

> In order for it to work financially, most people have to never have claims in excess of what they paid in. The whole point is to be able to cover exceptional and rare disasters.

This is where the problem is. Humans will have health problems and will have claims, especially after age 50. Which means (assuming a stable population), the present value of premiums has to equal the present value of all the healthcare you will need (until you get to Medicare, age 65). Which is a large number, especially considering the obesity/hypertension/diabetes/heart disease rates.

Which means premiums are effectively just another tax (except they are no longer mandated). A big wrinkle here is declining proportion of younger populations to pay for older populations, so the premiums young people pay for healthcare older people receive now, but when the young people are older, there will be fewer younger people to pay for them, so it is also a marginal “age” tax, where the younger people pay for more than what they will receive. Exactly the same as Medicare taxes.

This isn't solved by high deductible health plans, because they just kick the can down the road by letting customers self-segregate into different risk profiles.

- Young with no health issues? HDHP.

- Suddenly get sick or are older with medical needs? Wait until next year's open enrollment and switch to a higher tier plan.

Guess which risk pool has to pay out more in claims (against a neutral population average). And therefore has to increase premiums.

The issue is that we should categorically ban non-catastrophic health insurance.

Everyone gets an order-of-magnitude yearly disposable income * 2 deductible plan.

Everything else is out of pocket.

Surprise! Suddenly discount options appear. Suddenly hospitals are competing on price. Etc.

ACA does not permit segregation of risk pooling based on plan choice. The subsidy from young to old will remain no matter what due to the statutory age rating factors, and the subsidy from healthy to sick remains due to the restriction barring use of health history to price premium.

> The issue is that we should categorically ban non-catastrophic health insurance.

This is basically banned as all ACA compliant health plans have to have out of pocket maximums, which are limited by law (currently ~$10k/$18k for single/family).

However, there was a political compromise to allow non ACA plans due to some extremist “religious” factions, which I doubt had anything to do with religion.

The root problem will remain however, because the supply of doctors and non patented medicines relative to demand is very low, and hence prices will not come down.

I expect we might be tripping over my misuse of terms of art re: risk (sorry!) and your proper use?

If we look at two plans: (Plan HB) an HDCP bronze plan and (Plan P) a traditional platinum plan.

Each can set premiums on the basis of their expected payouts, no?

So if, for the last 5 years, plan HB had an average participant age of 35, few health complications, and low payouts and Plan P had an average participant age of 55, more health complications, and high payouts... Plan HB could set lower premiums and Plan P could set higher premiums (against all-of-population neutral rates), no?

Or am I misunderstanding limits on actuarial use under ACA?

(Disclaimer: I haven't done much work on the actuarial side)

> In order for it to work financially, most people have to never have claims in excess of what they paid in.

I don't this needs to be true. If you say pay 10,000 and they invest that and it returns at 10,500 at the end of the year then if your claim is 10,300 they've technically made $200 still.

Given that they're raking in billions in premiums I think they have access to better rate of returns than each of those individuals could've done on their own.

> I think one of the ways that health insurance (at least in the US) has gone horribly wrong is that it became a means to pay for routine medical things rather than just exceptional ones.

I really am surprised that most insurance networks don't become more vertically integrated. Like manufacture their own drugs, hire their own doctors, etc since a lot of their expenses are extremely predictable.

>Given that they're raking in billions in premiums I think they have access to better rate of returns than each of those individuals could've done on their own.

Not really, as far as I know claims reserves have to be kept highly liquid (Treasuries or High Grade Corporate Bonds maybe?, especially for a health insurer which pay out almost all the premiums it collects every year.

They are not going to be invested in VC/PE/REIT/etc.

>I think one of the ways that health insurance (at least in the US) has gone horribly wrong is that it became a means to pay for routine medical things rather than just exceptional ones.

Then why isn't this a problem in any country with socialized medicine or other required health "insurance" things? They have increasing costs but not nearly to the extent the US experiences.

The cost of childbirth in the US is insane. It is literally cheaper to fly to another country, pay out of pocket the purposely inflated "tourist medicine" price, hang out in a nice hotel for a few days, and then fly back!

There's a number of reasons.

    - malpractice insurance
    - cost of living difference
    - government rationing of care in public systems
    - lower capital expenses for nice looking buildings and top-of-the-line equipment
    - unpaid bills turn into higher prices

Medicare/Medicaid have their own distorting effects. One doctor told me that, for certain billing codes, he was effectively making less than minimum wage because the government rate was so low. To make up for it, other billing codes had to be overpriced, or he had to stop accepting any non-private payments.

Countries with socialized medicine have their own problems. It can be great for average people with average problems, but outside those lines you run into things that would be trivial in a US healthcare setting.

Obviously, it varies by country, and there are plenty of things I hate about how healthcare works in the US.

> It is literally cheaper to fly to another country, pay out of pocket the purposely inflated "tourist medicine" price, hang out in a nice hotel for a few days, and then fly back!

I can top that...

In my part of the US west coast, if you need to have two dental crowns done, it's cheaper to fly to Taiwan and have it done there than to have it done locally.

As a bonus, the quality of care and materials will be much better and the dentist may even actually apologize for having to charge you at all.

> In my part of the US west coast, if you need to have two dental crowns done, it's cheaper to fly to Taiwan and have it done there than to have it done locally.

This is exactly what I do.

I would take the kids back to my home country, pay out of pocket for any treatment, and have a nice holiday in the process.

Last time we went back, I was chatting with the dentist and casually told her about the treatment costs in the US - she was flabbergasted. Markup prices in the US seem to be 500%+ of those in many European countries.

Total cost of planned C-section as a private patient (that is, paying significantly more than public insurance) in Germany, including 3 day hospital stay (short because pre-vaccine, pre-quick test Covid times): about 5000 EUR.

That’s not what I paid out of pocket; that’s what the hospital cheerfully billed and collected from my insurance company, and what I theoretically could have opted to pay myself to retain my annual reimbursement level (3 months of premiums after several no-claims years on a higher-deductible policy)

Please Google “medical loss ratio”

I think that, and making the doctor who denies the claim responsible personally and professionally as if they were providing care to a patient.

To play devil's advocate: Wouldn't that just result in healthcare systems being run by people too incompetent to realize the liability they're signing up for?

That seems more likely (apriori) than healthcare systems magically becoming efficient, responsible, and ethical actors.

I recently sued my health insurance company in small claims court and won. They claimed my out of network costs were above the norm. The insurance company tried all kinds of tricks trying to get the case thrown and delaying. Took me four trips down to the courthouse but finally got them in front of a judge who knew they were full of shit and sided with me.

Interesting one I heard once from my dad.

'your policy is denied you are not covered for this because only your spouse is' 'thats interesting that is not how I wrote my OWN policy' 'uhhh we will get back to you' They approved it. But not before denying it.

He sold these policies for a living. He mostly quit exactly because of this sort of noise.

> So even if you know the grounds for denial, sometimes the reason is bullshit and flies in the face of the insurer's own policies.

This is a feature health insurance companies, not a bug. Their entire purpose is to collect as much premiums as possible while paying out a little as possible.

There was a lawsuit years ago where someone sued some hospital administration or insurance company for practicing medicine without a license for denying some claim.

I think this set a precedent, so if a doctor is not involved, there's a problem.

EDIT: can't find the case

It would be interesting to see exactly what was coded on the electronic claim in order to understand where the fault lies. Insurers certainly make some errors when processing claims and don't always follow their own coverage rules correctly. But equally providers (including pharmacies) sometimes make data entry errors. There are distinct NDC codes for every minor variation of a drug, and sometimes only a subset are covered.

Unfortunately when either side makes an error the patient gets stuck trying to fix it.

> I think if they'd tried to run the claim as the suppository version, the error would've been more obvious.

Gotta tell the insurance company where to stick it? :)

It'd be funny if they rubber-stamped all suppository claims. Like, we'll just cover it if it has anything to do with your ass.

Ironically I did want to try this steroid suppository foam in the throes of a bad IBD flare but my doctor said not to bother because insurance companies never cover it.

Thats why you ask for an exception and appeal the denial or get a specialist and try it with them. I don't think mine have ever been denied but I also have a long rapsheet of tried meds. If you rattle off a list of 2 or more previously tried meds, I'd be surprised if they can sustain a denial. You just might have to appeal or try something to add to the list of what to bring up as evidence to try something different (uncovered)

The world would be a much nicer place if the default for the insurance company was to cover your ass lol

The people who denied your insurance claims were literal criminal who need to be arrested and jailed. If their local municipalities don't prosecute on your own, you're [almost certainly] legally entitled to make a citzen's arrest with as much force as necessary to bring the criminal fraudsters denying your assets to justice..

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