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Comment by petilon | Hacker News Reader

Yes, there is something wrong with the insurance industry. But there is something wrong with the hospitals, doctors and drug companies too. The whole system is broken. Hospitals try to eke out the most out of insurance companies, often providing services that are unnecessary. Pharmaceutical companies charge US patients significantly higher rates than in other countries. Don't put all the blame on insurance companies.

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>Randy needed immediate psychiatric care, and as an emergency physician I knew the options. We put our trust in the mental health team at a local crisis receiving unit, and they kept Randy overnight in temporary safe housing where he could be observed. By morning they had devised a plan to transfer Randy to a retreat-like inpatient psychiatric facility that was in-network with our insurance. The psychiatrist felt Randy was very high risk, but that he could heal with eight weeks of inpatient treatment. We were told our insurance would cover it.

>But six days into Randy’s eight-week hospital stay, our health insurance company denied any further inpatient care.

>The facility appealed Randy’s case, providing psychiatrist’s notes that clearly outlined his need, but the outcome did not change. Because Randy had no prior history of mental illness, the insurance company determined he shouldn’t need to be hospitalized and stopped paying for his care. A day later Randy was forcibly discharged.

This is definitely a case where the insurance company holds the majority of the blame.

> This is definitely a case where the insurance company holds the majority of the blame.

What facts are the basis of your conclusion? There is no health system in the developed world where a doctor's recommendation will guarantee expensive inpatient treatment without a layer of bureaucratic review.

The goal should be to provide every human being with the best care possible. If a system can't handle that, then we need to assess why and make changes.

Show me a country where that's the goal. Every other developed country has a goal that's something like: "provide the best outcomes for the population as a whole, at a cost the public is willing to pay."

We should make it the goal as a species. We have the resources and technology. We decide to be limited by economics.

No, economics is just how we describe resource limits and tradeoffs in a methodical way.

You are right--Doctors absolutely share blame. Take my dentist's behavior, for example. When the oral hygienist is done doing all the real work, my dentist sits down for 10 minutes to count my teeth and say the words "You should floss more." She bills $85 for that sentence and calls it "Oral hygiene instructions". My insurance company (IMO rightly) denies paying for this. It's ridiculous and the dentist knows they're going to call bullshit on it, but they bill it anyway, and then I'm technically on the hook to pay for it. So far, the dentist has not yet attempted to balance bill that charge, and I will drop them like a bad habit if they ever do.

Doctors and dentists in the US are not bound by the same regulations (or even a similar stringency of regulation) involving billing practices and procedure codes.

There are many health systems in the developed world, though, where the system doesn't make this the patient's problem. It shouldn't be possible to have a scenario where the provider believes eight weeks of treatment will be covered, the patient moves to an inpatient facility based on this understanding, and then the bureaucratic review layer decides six days layer that the provider was wrong.

I'd imagine you'd struggle to find a healthcare system in which a doctor's prescribed care is assuredly covered by insurance, by the insurance provider, and then later rescinded after care has already started.

The ACA made rescission of health insurance more difficult for insurers, but it absolutely happens. There are people at insurers tasked with looking for fraudulent omissions in policy applications for high loss ratio individual policyholders to target for rescission.

This one is pre-ACA but the insurer focused on an "omission" to justify the rescission: https://www.cnn.com/2009/POLITICS/06/16/health.care.hearing/...

This is strange - I work in insurance, and you really aren’t allowed to do that after the policy is signed. Or at least it’s very tightly controlled and limited to straight up fraud.

Every player in the US healthcare / health insurance "system" has adapted to the regulatory niche they play in.

If Americans had the fortitude to have grown-up conversations about what should be socialized, how care should be rationed, etc, the public could exert some control over the design of the "system". As it stands, the "system" has mostly been shaped by corporate interests while the public has been distracted by inflammatory rhetoric pumped-out by all the entrenched players designed to play to partisan feelings about "fairness" and "freedom".

John Stossel explained in _Give Me A Break_ that the US once had a variety of pharmaceutical labs researching different cures and conducting trials. But US courts allowed a frenzy of frivolous lawsuits to extract astronomical payouts on behalf of former trial participants, even demanding payouts from the companies that stocked the supply and janitorial cabinets of research companies. One by one, we bankrupted our competitive machines of innovation until the few remaining pharmaceutical companies had grown large enough to defend themselves against injury claims. Big Pharma was created by lawyers.

> often providing services that are unnecessary

Thank a lawyer. "Patient with symptom X would have survived if only the doctor had tested him for Y". Now every patient with symptom X is issued a $5600 scan for Y -- not because of medical science, but because of liability. Every time a courts awards 10 figure settlement because "that insurance company is good for it," all of society pays for it.

Our country is run by lawyers for the benefit of laywers. This explains much of what we see around us.

the problem is healthcare is run in a capitalist "free market" model, in which all actors are incentivized to increase their profits at the expense of the other actors, and where the patient is either a customer or a commodity

it's inherently the wrong model for providing a necessary feature of life (health), and combine it with a highly litigious society, and well, this is the result

The insurance companies are running the system more than any of the others — it is the finance "wizards" there who put the constraints on the rest of the system. I'll agree somewhat on the pharma companies too, who are also extractive.

You even said it yourself: "Hospitals try to eke out the most out of insurance companies...". Exactly! Because the hospitals and doctors are constrained to do "WHAT IS IN THE BEST INTEREST OF THE PATIENT" — that is their charter (and BTW, that is also the magic phrase to use whenever questioning what they propose to do for a patient or escalating a case). Perhaps a few hospitals or physicians occasionally overdo it, and there are some frauds, but your accusation overall is BS.

The insurance companies have no such constraint — if they do have such a mission goal, it is to OBTAIN MAXIMUM VALUE FOR THE SHAREHOLDERS. And the insurance companies are literally so amoral that they will reward agents for killing people for profit. That is not rhetoric, it is sworn testimony before congress of a person who cut off a patient's coverage, causing their death, and got promoted.

I have seen directly and personally an insurance company deny coverage for a test ordered for a close family member by the Chief Of Cardiology at Mayo Clinic. Mayo Clinic, and that physician are so overbooked they have ZERO motivation to order anything not necessary for the patient in front of them. It took days, and significant extra expense to get it reversed.

There is no way on the planet that anyone in an insurance industry should be able to override the doctors orders of the Director of Cardiology for Mayo Clinic. Or any physician, for that matter.

Medicine is one of the things that should never be run for a profit, and if I were on Luigi Mangione's jury I would acquit on Jury Nullification.

An itemized bill from the hospital for about four weeks of his hospital stay. It came to a little over $4 million. https://www.cbsnews.com/news/covid-19-deaths-families-60-min...

Woman charged $143,396.66 for a breast biopsy https://www.marketwatch.com/story/a-doctors-prescription-to-...

Numerous studies have found that when doctors have a financial stake in a hospital, they tend to order more tests and procedures, raising costs for Medicare and other insurers. https://www.nytimes.com/2011/12/13/health/policy/republican-...

And you are saying overcharging an insurance company is on the same level as an insurance company denying medical care and directly killing the patient because they don't want to pay?

And your examples justify obviously incompetent insurance people vetoing doctor's orders, exactly how?

Doctors are generally forbidden to treat patients without directly examining them and knowing their cases. How is it that insurance companies are allowed to make life-and-death decisions over medical care —with less competent bureaucrats (who may or may not have a medical license)— without ever even seeing the patient? How is this good for the patient?

Of the 33 developed countries, 32 have figured out how to deliver medical care to all of their citizens, and do so for roughly half or less of the cost in the US. Moreover, those countries are seeing continued longer lifespans, while lifespans in the US are declining, again while spending twice the money. Clearly, for-profit medicine and insurance performs worse on every metric.

As it is, insurance rates are rising far faster than inflation rates. Have you checked how much insurance rates have gone on the last few years? It goes up 6% to 25% per year. Where is all this money going? Is it all going to insurance companies? Nope. The price increases are attributable to hospitals, doctors, pharmaceutical companies and so on. These price increases are a form of healthcare denial because a lot of people can't even afford health insurance at all, let alone worry about what is approved/denied by insurance companies.

Health insurers tripled their profits while covering 80,000 fewer people 2015-2025 [0]

What is the difference between the 32 developed countries who successfully deliver healthcare to all their residents, vs the wealthiest country of all of them who still fails, and yet spends twice what the rest spend?

Private Insurance runs the whole thing.

And it is a sh*tty business. Insurance company profits do not account for near the 2X difference in spending. That is in the massive waste and bureaucratic overhead of every party trying to keep their heads above water while jumping through the insurer's hoops.

Entire bureaucracies exist just to oppose the insurer's bureaucracies.

And feeding those bureaucracies consumes an insane amount of physician resources.

And exactly zero of it delivers any healthcare to patients.

[0] https://healthcareuncovered.substack.com/p/2025-big-insuranc...

> Is it all going to insurance companies? Nope. The price increases are attributable to hospitals, doctors, pharmaceutical companies and so on.

The insurers are buying up the doctors (and paying their doctors more, as a bonus - https://sph.brown.edu/news/2025-11-10/unitedhealthcare-optum...) and the pharmaceutical side (https://en.wikipedia.org/wiki/Pharmacy_benefit_management) of things.

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