Providers, not insurers, are responsible for excess U.S. health care cost (2024)

Spurious denials? Or improperly filed claims?

I had an ACA "marketplace" plan back for my family back in 2017 when I was self-employed. My premiums were >$15K / year for a >$10K deductible and no tax credits (because of my income).

1. On average, how healthy is your group of ACA plan holders? If the group has a bunch of chronic conditions, they get more subsidy money to offset the increased care costs. Going to the PCP allows them to have official medical evidence of those conditions.

2. The government gives these plans quality ratings to help people compare them to each other. These ratings are partially based on how often patients get their annual screenings and patient satisfaction. A gift card for a PCP visit accomplishes both aims.

There are also more practical concerns. Preventative care is cheaper than an acute incident for the company. You'd rather catch an arrhythmia at a PCP appointment than pay for the cost of a heart attack.

"Perversely, with the MLR requirement capping profit margins and administrative costs, insurers are discouraged from containing health plans’ premium increases. Economists have noted that the MLR requirement effectively turns health insurers into “cost-plus” businesses: If insurers’ predicted premiums are less than the actual medical care spending on claims, it can lead to higher MLRs and less profits, within MLR restrictions. Professor Scott Harrington warned early on that MLR requirements could reduce insurers’ motivation to control premium increases. Prior research has found that the MLR requirement is associated with stronger financial performance for insurers, since they can raise premiums to cover higher claims and still comply with the MLR threshold."

The biggest buyer is the Federal government and by law they are required to get the best deal, the government also restricts the supply of providers. It’s not a capitalist system at all. It’s a weird hybrid command economy with a consolidating cartel of providers and administrators.

A public health care system should be independent of politics. Unfortunately, as the latest administration has shown, even if you designed it to be independent, such as the CFPB, it doesn't matter with an autocrat in charge. On the other hand, private industry does not have all that good a reputation for not effing with your healthcare.

I propose allowing buy into medicare at 5 years before regular eligibility. And a long phase in of lowering the eligibility age. Drop it by 6 months every year for 10 years, then 1 year every year for 10 years, then 2 years every year until everyone with work credits is eligible.

At the same time, start covering all kids up to some age with Medicaid (after all, kids tend to have no income, so if eligibility was based on their own income instead of household income, they'd qualify). First year, kids get covered until 6 months, next year until 1 year, etc.

When the Medicare and Medicaid ages meet, we have universal health care. It would take a long time to get there on my schedule, but it would be gradual, so everyone could adapt. And if future legislation could adjust the timeline as needed.

Also, clearly someone needs to add more residency slots.

Also, having a baseline of public care and then private as an option on top doesn't sound like the boogeyman this is pitching it as to me. That seems like a great way to reduce the scope of what the state needs to be in charge of.

If the take is that government cannot possibly work for the people no matter what then yeah, all policy is bad.

There's only so many doctors, only so many MRI machines, so many valve stents, so many syringes.

Everything on earth is supply constrained.

This is twice what the same role pays in most European countries. Unless she is well below that range for some reason, she is likely overpaid.

Everybody in healthcare, from the nurses to the hospital CEOs, makes far far more in the US than they would in a country with socialized medicine.

I pay the maximum possible in Germany for my health insurance and from what I understand I still pay less for healthcare than I would in the US.

I would dearly love to know what "costs" of healthcare you are looking at when you say the US is preferable enough to actually move to/be in/stay in the US.

Because when I can have higher end insurance from my employer, and still be out $9K for a kidney stone after insurance, I'm not seeing it. That is an outlier, for me, I'll acknowledge, but it's still nearly five digits that had to come out of my pocket after my employer paid thousands, I paid premiums, for insurance (that is insurance-in-name-only).

I think an 11% decrease is conservative if anything. None of our peer nations spend more than ~5% on administration as a share of overall healthcare spending.

Imagine if car engine oil changes had to go through car insurance. In such an inefficient equilibrium you might remark that only that insurer overhead is only 20% of a $300 oil change. Sellers always capture easy money that flows in from insurance money, credit, or government subsidies.

The fewer layers between a buyer and the seller, the lower the cost. Compare buying a bottle of ibuprofen at $5 for 200 doses compared with going to an urgent care and having a registered nurse hand you five doses at $200. Professional labor often used in medical care is expensive. Legalizing over the counter medication like birth control helps. Ironically a lot of poorly run companies try to shift HR policing of employees onto the healthcare system by requiring doctor’s notes. An insurance company processing claims is expensive.

Fee for service encourages more work ups and surgeries. The US caps physician residencies at a low count. Having the operations and financing as separate and adversarial companies adds a lot of friction. Hospitals charge 10x and the insurance brags they negotiated a 90% discount. No one health insurer has enough market power to push down outpatient, inpatient, or drug pricing. Without strong competition, automation, and price signals, healthcare spending is not going to get under control.