Maybe healthcare shouldn’t be primarily for profit?
I hate to break it to you, but "non-profit" doesn't mean what you literally think it means.
https://en.wikipedia.org/wiki/Kaiser_Permanente
Also, KPMGs are indeed "for-profit" while Kaiser Permanente as a whole is constituted as a "consortium" of both types.
And here is why: I guarantee you that the nurses are working in the "for-profit" units, and also, that still betrays ignorance of what "non-profit" actually means, which is the load-bearing topic of this thread.
This doesn't seem like a money-saving measure exactly. The main AIs the article talks about is making sure nurses on their nurses' lines aren't being assholes. I guess this used to be spot checked before so you save on that? Maybe? It seems like they are trying to solve the problem of some of their nurses staffing their nurses' line not treating their patients the way they're supposed to.
Increasingly health insurance companies and healthcare providers are intertwined. So they may spend 80% on healthcare, but then a big chunk of that could go to the urgent care clinics that they own.
And even if they don’t own the provider, they don’t have much incentive to lower total cost because 20% of a larger number means more total profit.
Kaiser is an HMO. They are the insurer and try to have their employees, such as these nursing lines, perform almost all of their care. Shifting from one line of business to another is purely internal and can't game Medical Loss Ratio like your scenario.
> they don’t have much incentive to lower total cost because 20% of a larger number means more total profit
There is some bad incentive here for sure. That being said, insurers do compete on price so they lose customers if they charge more than other insurers. Also, regulatory rate review can decide whether they can raise premiums a given amount.
> That being said, insurers do compete on price so they lose customers if they charge more than other insurers.
Yeah but that’s a second order effect. Most companies are incentivized to cut costs because they will directly realize the profit. Insurance companies are incentives to cut costs only to grow market share.
I understand the point of the profit limits, but I don’t think it works very well in practice. I think it would probably be better to just have private companies without that profit cap and add a government insurer to compete with them.
>Maybe healthcare shouldn’t be primarily for profit?
Which is a far larger topic than what the article was about.