'Profit-Enhancing Middlemen' Fuel $200B Health-Care Chaos
bloomberg.com
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Not every system becomes more efficient with profit incentives, and this really seems like just such a case.
This is the dirty part of the political process: people sacrifice better outcomes for all, merely for the pursuit of more power in the future. And those who want better outcomes for all must somehow gather a coalition that can achieve those outcomes.
Nobody, least of all the architects of the ACA, thought it was the best possible system. It was merely the best system that could get through the democratic process of our government.
Which means we need iterative design on these programs. It's not pass once and done forever. We need maintenance legislation for bug fixes and feature improvements. However, every culture war battle that we fight can be used to distract from actual reform, like a nefarious form of bike-shedding.
Maybe something for children too, start with making Medicaid or something automatic for the first N months of life, and increase it every year too.
Before the ACA it simply was not a choice to be an independent professional and have health insurance.
If people could understand why it is unacceptable to force independent professionals and entrepreneurs to give up healthcare they would see the ACA was necessary in whatever form it could be passed.
this call for "less reliance on insurance" lacks context and is overly-simplistic IMHO
I think people like Medicare like they like Comcast. They have it, it performs a service they want, they hate everything about it, and would never leave.
I have UnitedHealtcare through my employer. I don't like it and would prefer something else.
BTW, your stats are way off, CA is at 33-34% Medicaid utilization. Below several red states.
In any case, I don't see how the state net revenue balance is relevant as a justification for this - all that's saying is california has fatter tail on the income distribution. You don't "own" those rich people, as the high-tax states are coming to find out with the mass exodus to florida.
Definitionally 4/10 of california residents cannot be in poverty.
Medicaid expansion was allowed only because it was insuring people the the private companies didn't want as customers.
One of the better sources of information I have seen on this is actually a YouTube video, something I don't normally recommend, but getting a wholistic viewpoint is somewhat difficult otherwise:
https://www.youtube.com/watch?v=QqrpFICtqpQ
We could increase the medicare contribution cap (samething like only the first $175k of income has medicare tax applied to it), but I'm not sure that's going to fill the massive gap. Perhaps increasing the rate would also work.
There could be some good things about this process, I just want to bring up that it's not a magic bullet because we will run into access problems unless we also solve the funding side of things. And when there are access problems, the people who lose access will be those with the least to pay.
This is a fiction people repeat with no citation. A large portion of the population wants m4a when it is explained to them. This "system" failure was specifically our elected reps - bipartisanly - ignoring the needs and wants of the people at the behest of their donors. The democratic process failure was when the two parties solidified.
It wasn't pitchfork wielding illiterate rubes (or whatever undoubtedly out of touch "data driven" parody of what an average person is we're operating with) trying to deny a Black man his legacy, it was that Black man's party collectively wanting to be reelected that gave us the "Buy Insurance Or We Fine You Through Taxes" Act.
That's not he way the ACA went down. Obama had this idea that the best way to reform an industry was to have it write its own reform legislation and pretty much let the industry have first draft.
> with a large portion of the population being dead set against better healthcare if it meant allowing Obama to be able to take credit for it.
The ACA was initially popular but it became increasingly unpopular during the months of horse trading, the explosion in length of the law, the jettisoning of most of the good parts (drug price controls, public option, etc), retention and expansion of industry giveaways (tax penalties), and yes, relentless Republican opposition and propaganda against it.
But even the latter was Obama's fault for not being prepared to anticipate and deal. He actually spend the first several months pushing for a "bipartisan" deal with Republicans that gave them room to delay and attack.
> with a large portion of the population being dead set against better healthcare if it meant allowing Obama to be able to take credit for it.
Obama had a filibuster-proof supermajority in congress. Yes, Republicans were going to oppose his agenda, but he didn't need them. For some dumb reason he loaded a gun, pointed it at himself and handed it to them.
There were lots of comparisons to Medicare/Medicaid being made at the time. That law was a fraction the size of ACA, the implementation phase was like a year instead of a decade for the ACA, and its effect on the public was immediate and profound.
The failure of the Obama administration was the failure of technocracy. Obama thought he could have "experts" develop the ultimate "win-win" policy. What you ended up instead was a bunch of naked self-dealing by craven opportunists who either worked for the industries they were regulating or intended to do so in the future. People saw through this and it lead directly the the rise of Trump
By definition, a society’s elites always run things…
Pretty damn well in the long run!
Each of the French Revolution’s successive governments had their own sets of elites. (La Révolution itself had its elites.) Arguing against elites as a category is arguing against hierarchical sociology. It’s inchoate. We don’t have an example of a society without elites; we barely have examples of social animals without hierarchies. (Zebra herds.)
And speaking of the French Revolution, the elites ex post facto were not only mostly the same as before, they escaped with so much money and wealth that it’s actually debated if they increased their wealth share through the chaos [1].
I'm pretty sure that being elite is a symptom of running things, not the cause of running things.
In the UK, they fortunately have a notion of money spent for QALYs earned (adjusted to boost life extension at end of life) but in the US everyone believes that we should spend arbitrary amounts of money on people and if we don't, we should pay their relatives extraordinary amounts to compensate for the fact that we didn't spend a few aircraft carriers worth of money on them.
Put simply, so long as US ethics remains "there is no sum of money that is too high to save an arbitrary person's life", we have to oppose the public option.
Even without that, when Cuomo in NY said he wouldn't trade grandma for a dollar, there was thunderous applause across the US. And many here argued that the economy isn't as important as any life lost. That's enough to cement it for me.
In the nearest city to me there are 3 major private hospitals, and if you head into London there are loads of them.
Private is still able to compete and to be profitable. Just no one needs to die from preventable diseases.
(not saying NHS is perfect, it is a shadow of what it should be right now)
I spent eight hours at an Accident & Emergency department at my city's hospital a couple of weeks ago (Those electric scooters look easy enough, I have a driving license, I watch the training video, then at midnight I thought I'd try one, signed it out, crashed into a lamp post within seconds, broke my hand and busted my head open. Oops. Signed the scooter back in, walked to the Urgent Care, it shuts late at night, walked towards hospital, saw a cop - "Hey, I can't see my head, I can feel the wound, is it bad?" "You should get a taxi to A&E. I'll call you one"). There is no private emergency care, private cosmetic surgery sure, and lots of private non-urgent care, like knee replacement or whatever - but no emergency care.
There is a real issue with regulatory capture. Making the system purely public is not going to result in the regulators suddenly purging their souls of all corruption. It'll still be a disaster just without any pretence of an alternative. There are literally people on HN every day who would happily improve on the US healthcare system's costs and outcomes if well meaning busybodies hadn't banned them from doing so by overregulating.
I trust the market to provide healthcare about as much as I expect america to suddenly blast off to join the moon. And i trust vc/finance a hell of a lot less than that.
Unless you are saying there is something exception about the US and profit extractions?
That's just straight up not going to happen in the US. We could have easily tackled medication prices by tying them to an average of some select other countries, but we haven't.
People would throw an absolute fit if our government tried to lower the salaries of doctors, and especially nurses.
The US is also just a very large country, population-wise. German has around 84 million people, so barely more than twice the population of California. I'd be a lot more likely to support government run healthcare if it was done by the states. The larger a system gets, the more inefficiencies sneak in - and, as a bonus, people could move to other states if the healthcare in their own wasn't up to par.
so that Americans could travel overseas and get healthcare expenses reimbursed over there.
watch prices drop...
On prescriptions, reimbursement for drugs bought from cost plus would also help drive down pharma prices
(separately, profit capping rules means that once a monopoly is cemented, once a company has moved as much as it can from one pocket to the other, there's an internal incentive to spend money on bureaucracy).
This is nonsense. UNH’s profit margin is all net income divided by all revenue.
https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
Same with Elevance, CVS, Cigna, Humana, Centene, and Molina. There is a reason all these businesses aren’t at the top of the market cap rankings. Not even in the top 100.
UNH is up there due to sheer size and the fact that they sell high profit margin software and healthcare. Otherwise, you will not get rich starting a managed care organization. Even Warren Buffet, Jeff Bezos, and Jamie Dimon ran away with their tail between their legs:
Much like amazon did in the early days.
When the problem is incentive structures -- of profit seeking corporations or compensation seeking individuals -- what options do you have? (IMO its only regulatory enforcement with democratic oversight and transparenct.)
I think we as a society still have to figure out ways to restructure sprawling institutions and i dont like it when people only put the blame on public or private ones while ignoring the other.
We can solve pharmaceuticals without bringing in the miasma of the broader healthcare debate.
Three things:
1. Let Medicare directly negotiate pricing on all drugs;
2. Make it easier for generics producers, including foreign manufacturers, to sell into America; and
3. Reform PBMs [1]. Transparency on pricing. Spun out of monoliths.
While we’re at it, maybe someone can figure out how to cut the $1bn it costs to get a drug to approval to something lower.
[1] https://www.congress.gov/bill/118th-congress/senate-bill/297...
Both are true! The ACA is a literal life-saver and bankrupcy-avoider for a significant percentage of the population. So it is a huge win for the common person.
At the same time, yes, it perpetuates the corrupt insurance system, which is bad. But at least makes it more widely available, which is good.
> Not every system becomes more efficient with profit incentives, and this really seems like just such a case.
Health care can only ever get worse with profit incentives. The best way would be to eject all the profiteering out of the system so that only the people who provide actual care (doctors, nurses, medical technicians,etc) get paid. Remove all profit from the hangers-on that do nothing useful (insurance middlemen).
The path to get there is obvious, but politically quite impossible in the US (and only in the US, since every other country has it figured out.)
I cannot emphasize enough how much of a death sentence being chronically ill before the ACA was. No protection for preexisting conditions meant one unfortunate incident could cost you your job could cost your your healthcare could cost you your ability to get back on solid footing to get another job.
Maybe it does but not for the right people.
I don't understand why vertical integration is not made illegal. An insurer should not own a PBM or providers. They all should have an adverse relationship so they put cost pressure on each other.
Also, providers should charge the same prices for the same procedures no matter who pays. Ideally everybody should be mandated to follow Medicare prices. If these prices are too low to survive, then there should be a discussion about adjusting the prices.
The whole system is basically a huge bureaucracy that wastes a lot of money but some of the waste is enough profit for a lot of people to fight tooth and nail to keep the status quo.
Well I decided that would be extremely inconvenient for me if that was the case, so I’m going to call this “bad regulation”, and say it’s against the “Free Market” so if you support it you are a communist.
If later on I decide this is good for me, then I will call it “good regulation” that supports the “Free Market” and you are in the clear.
All sarcasm aside, if you don’t define what your minimum set of regulations are for you to consider it a “Free Market”, then you are consigning yourself to endless bike shedding over what a “Free Market” really is
In some cases, privacy laws require that fax machines be actively monitored so that sensitive personal information is not just left sitting around in the open for hours.
Yes, there could probably be alleviated with sort form of purely digital fax system, but for regular fax machines, this could be why they are only available during staffed hours.
Kaiser would sometimes tell me that we have to try X first before we do Y, but then the X's worked sometimes, so it seemed like they were asking for reasonable things to reduce cost.
"Unlike the traditional healthcare model, which often pits payers against providers in a bid to control costs, the payvider model merges these roles..."
Usually when he’d ask them about this, the process of filing these claims with the insurance companies was so onerous, they just fell way behind on the process. Typically you could resolve this by bringing in someone with a LOT of experience filing these claims I believe.
This was back in the 90s, so maybe the advent of computers has improved this particular part of the game (I’m not in the industry myself), but at least back then, it was infuriating doctors too.
I am not surprised in the least to hear that, like every other system in this economy, it seems to have gotten massively more complicated for approximately zero real-world improvement
But just as a major PBM reform bill was set to pass last December, Elon Musk fired off a series of tweets opposing it. Within hours, what had been near-unanimous support collapsed. Five days later, Musk tweeted, "What is a pharmacy benefit manager?"—as if he had only just learned about the issue.
This isn’t about whether Musk was right or wrong on PBMs (though evidence suggests reform would lower costs). The bigger issue is how a single billionaire’s influence can derail democratic processes that were functioning as intended. When a reform has broad bipartisan support, expert backing, and clear public benefits, yet can still be nuked by one well-placed tweet, that’s not just a policy failure—it’s a governance problem.
Tech billionaires reshaping policy via social media whims should concern anyone who cares about democratic accountability. If Musk can tank a bill that helps millions save on prescriptions, what else can be undone with a midnight tweetstorm?
Source? (Not doubting you.)
They certainly could have just done the PBM reforms in a separate bill instead of shoving it into something else…but then they potentially wouldn’t be able to get their own choice cuts of pork passed.
Anyways, seems odd to blame Musk directly for that even if his tweet did kill the bill.
Musk tanked a bill he obviously didn't read with zero plans for its replacement. So instead of a $1.7 trillion bill in December, we get roughly the same bill (that's what a continuing resolution is) plus $100bn in giveaways in March minus the PBM reforms.
Musk killed PBM reform. The fact that he was too high to know what he was doing isn't exactly redemption.
I'm sure we'll find out soon enough.
Such a pity that this is "easily" remedied via campaign finance reform and revoking Citizens United.
Plurality voting applied to the tragedy of the commons, i.e. the nash equilibrium decision matrix, results in the worst possibility if there's no basis for trust. If we could vote on the results of that matrix, by replacing {+1, 0, 0, 0...} voting with {+1, +0.5, -0.5, 0, 0, 0...} voting, things might actually improve with 3-4 viable, local parties, with smart selection of candidates actually representing districts constructively and campaigning accordingly.
But we don't have that. I fear its absence at all scales from local right on up to resolution of international conflict may end up being the Great Filter: The coordination problem of solving the tragedy of the commons in all its forms.
That whole situation was so strange to me. I was in my mid-20s at the time, trying to make sense of the "adult world". Then they tell me something is both illegal and legal at the same time, depending on how your label it - like Schrodinger's cat, but dumber.
And that's when I really started to feel dirty about working for the PBM. I knew the company was part of the machine, helping push drugs onto people, purely driven by profit, not actual need. Like, I dealt with drugs dealers a bunch in college (weed, ecstasy), and none of them ever tried to push drugs onto me. They just sold it, and that was it. But I really started to see how this whole machine operated, and I was part of it. :'(