Competition for medical-insurance companies?

[RavenSky]

The US had comparable medical costs to the rest of the developed world when it had a community rate based non-profit insurance company, Blue Cross-Blue Shield that could dictate rates at non-profit hospitals owned by local governments and charities. What drove up costs so high was when the insurance companies and the hospital companies became for profits. It is profits that are incompatible with healthcare.

Healthcare must be delivered by doctors working with their training and their professionalism.

By far the biggest driver of health care cost is that we can do more than we used to be able to.

If that were the case medical care costs would have soared in the rest of the developed world just like it did in the US. Do you think that the entire rest of the developed world now does less for their patients to make our products not competitive because of our high medical costs?


I am sorry, I have taken over the thread, answering questions not directed to me. I have been told this is considered impolite here.

Don't stop... especially on this topic. Your posts are informative, rational, and a pleasure to read.

- - - Updated - - -

If that were the case medical care costs would have soared in the rest of the developed world just like it did in the US. Do you think that the entire rest of the developed world now does less for their patients to make our products not competitive because of our high medical costs?


I am sorry, I have taken over the thread, answering questions not directed to me. I have been told this is considered impolite here.

Rationing. People like to pretend it doesn't happen in UHC countries but it does. It's just subtly built into the system.

Despite our very poor performance at covering people our medical outcomes are at the front of the pack if not #1--and the only way that can happen is if the care that people actually get is far beyond to make up for the ones that don't get care in the first place.

Rationing of healthcare happens everywhere. We ration healthcare according to wealth and access.

^^^ that (& that is actually what some people in this country don't want to admit)

 

[SimpleDon]

If that were the case medical care costs would have soared in the rest of the developed world just like it did in the US. Do you think that the entire rest of the developed world now does less for their patients to make our products not competitive because of our high medical costs?


I am sorry, I have taken over the thread, answering questions not directed to me. I have been told this is considered impolite here.

Don't stop... especially on this topic. Your posts are informative, rational, and a pleasure to read.

- - - Updated - - -

If that were the case medical care costs would have soared in the rest of the developed world just like it did in the US. Do you think that the entire rest of the developed world now does less for their patients to make our products not competitive because of our high medical costs?


I am sorry, I have taken over the thread, answering questions not directed to me. I have been told this is considered impolite here.

Rationing. People like to pretend it doesn't happen in UHC countries but it does. It's just subtly built into the system.

Despite our very poor performance at covering people our medical outcomes are at the front of the pack if not #1--and the only way that can happen is if the care that people actually get is far beyond to make up for the ones that don't get care in the first place.

Rationing of healthcare happens everywhere. We ration healthcare according to wealth and access.

^^^ that (& that is actually what some people in this country don't want to admit)

Americans Visit Their Doctor 4 Times A Year. People In Japan Visit 13 Times A Year -- Forbes. Germans visit 9.7 times a year, same article.

Neither the Japanese nor the German UHC's ration health care to the extent that the higher cost in the US rations it. The Germans and the Japanese have similar health care systems, which are largely private businesses, with individual mandates to buy insurance, usually paid for 50/50 by the insured and his employer, the governments pay the premiums for the unemployed and the poor, the aged and the disabled. The insurance companies in both cases are non-profit, community rate based companies like the Blue Cross-Blue Shield use to be in the US. In Germany an individual can select from 250 or so insurance companies.

At least in Germany, which I am more familiar with, companies consider their employees good health to be among the company's best assets and something to be protected. My company there ran a full time medical clinic open to the employees and their families, the company's retirees, as well as the residents of the local community. The draw to the clinic was that it didn't charge the normal patient contribution of I think €10. In Germany there was a problem that the employees would come to work even when they were sick, and would infect others. With the clinic on site anyone who appeared to be ill was sent to the clinic.

Japanese Pay Less for More Health Care -- NPR.

Japan produces cars, color TVs and computers, but it also produces the world's healthiest people. It has the longest healthy life expectancy on Earth and spends half as much on health care as the United States.

<snip>​

Japanese patients also stay in the hospital much longer than Americans, on average. They love technology such as magnetic resonance imaging; they have nearly twice as many scans per capita as Americans do. A neck scan can cost $1,200 in the United States.

Professor Ikegami Naoki, Japan's top health economist, explains how Japan keeps MRIs affordable.

"Well, in 2002, the government says that the MRIs, we are paying too much. So in order to be within the total budget, we will cut them by 35 percent," Ikegami says.

This is how Japan keeps cost so low. The Japanese Health Ministry tightly controls the price of health care down to the smallest detail. Every two years, the health care industry and the health ministry negotiate a fixed price for every procedure and every drug.

This is the same in Germany. Every year die lande, the states, and their governments negotiate the rates for every procedure and every drug with associations representing the providers and the insurance companies.

 

[Elixir]

Neither the Japanese nor the German UHC's ration health care to the extent that the higher cost in the US rations it.

That's a fact that never gets air in right-wing circles. In the last 50 years, I may have been to "the Doctor" (including 2 ER visits) almost 30 times, and about 8 of those were in the last 2 years when I've been on Medicare. I'd have been to the Doctor at least 3-4 times/yr except that my insurance
a) wouldn't cover it, and
b) had premiums so high that I couldn't afford to pay for it out of pocket.

In microcosm, that is pretty much how it goes; the money that the citizens of the US pay for "healthcare" goes mostly to the insurance Companies, and actual care is allotted whatever meager discretionary funds the individual or family has left over after paying the profiteers.

 

[dismal]

In microcosm, that is pretty much how it goes; the money that the citizens of the US pay for "healthcare" goes mostly to the insurance Companies, and actual care is allotted whatever meager discretionary funds the individual or family has left over after paying the profiteers.

The number typically thrown about is health insurance company profit is about 3% of premiums.

Are you suggesting this isn't the case?

 

[Elixir]

In microcosm, that is pretty much how it goes; the money that the citizens of the US pay for "healthcare" goes mostly to the insurance Companies, and actual care is allotted whatever meager discretionary funds the individual or family has left over after paying the profiteers.

The number typically thrown about is health insurance company profit is about 3% of premiums.

Are you suggesting this isn't the case?

There are caps in some places - I even got a refund check once, and it was shockingly large. But all they really to do as SOP is to bonus the execs, so there is no "excess" profit.

 

[dismal]

In microcosm, that is pretty much how it goes; the money that the citizens of the US pay for "healthcare" goes mostly to the insurance Companies, and actual care is allotted whatever meager discretionary funds the individual or family has left over after paying the profiteers.

The number typically thrown about is health insurance company profit is about 3% of premiums.

Are you suggesting this isn't the case?

There are caps in some places - I even got a refund check once, and it was shockingly large. But all they really to do as SOP is to bonus the execs, so there is no "excess" profit.

Hmm, not so sure about that.

This guy crunches some numbers and concludes Heath Insurance Company CEO compensation costs about 42 cents per member per year.

https://www.forbes.com/sites/theapo...d-redistributed-it-to-members/2/#41693c5e660a

 

[Toni]

Amazon, Berkshire Hathaway And JPMorgan Chase Launch New Health Care Company : The Two-Way : NPR

Health care costs are "a hungry tapeworm on the American economy," Berkshire Hathaway Chairman and CEO Warren Buffett says, and now his firm is teaming up with Amazon and JPMorgan Chase to create a new company with the goal of providing high-quality health care for their U.S. employees at a lower cost.

The new company will be "free from profit-making incentives and constraints" as it tries to find ways to cut costs and boost satisfaction with the health care plan for employees of Amazon, Berkshire Hathaway and JPMorgan Chase. The trio unveiled their new venture in a news release.

All well and good, and I think that the medical-insurance companies deserve it, but it does not address the problems that have resulted from tying health-care coverage to employment.

You have to take small steps. There are probably two paths to a reasonable cost health care system. Neither involve private, for profit health care insurance companies or for profit hospitals. They caused the problem of high cost medical care. They can't be part of the solution.

One path is by the government, Medicare for all. It would be reasonable to lower the eligibility age first to 50 years old. Charge over fifty year olds say $600 a month until they reach 65, paid for most by the employer, as a relief from what it is now, about $1200 to $1400 a month. Increase the payroll tax by 1% to 2% and make the rest of the cost out of the general fund, to cover the unemployed and the poor, just like the economy needs highways and harbors, the economy needs healthy workers. This would lower the medical premiums for the under 50 year old to about $600 a month too.

The other path is to encourage doctor run, not for profit healthcare companies to cover primary and all but the hospitalization for the most serious diseases and conditions, for which the companies would buy insurance graduated by their financial strength and use. Yes, the much maligned health maintenance organizations. This is what these companies are doing.

The government currently pays for about 50% of the medical care in the US, with very little crying about socialism because they cover the people that the private, for profit insurance companies can't cover profitably and who they don't want to cover. They want to cover healthy people in a very high medical cost market. This is why they working with the hospital corporations have encouraged the dramatic cost increases we have seen since the 1970's.

If by "Medicare for all" you mean the current Medicare system, count me out. I'm dreading going on Medicare. Here's why: A co-worker's mother recently had a knee replacement, covered by Medicare plus her supplemental insurance. The surgery was carefully planned and her re-hab at a skilled rehab center was scheduled and coordinated. One daughter flew in from AK (an expensive flight plus missed time at work) and the other daughter, my co-worker, arranged to use her entire PTO to coordinate with her sister. These were specifically timed to coordinate with the surgery and rehab center.

Surgery went off without a hitch.

Then the flu epidemic hit. The first choice nursing home/rehab center closed for new patients due to the flu. So did the second choice. There is a third choice which had not closed as of last week but my friend and her sister were reluctant to use this option as its care quality was significantly lower than the first two choices. Plus she's concerned that it has NOT closed due to flu, which is at its peak in my area right now. But it is the only other game in the area with an open bed. So I asked if they couldn't just have home care come out and PT come to the mother's home. That, plus the two daughters would see her mother through recovery nicely, be less expensive and would certainly reduce the risk of her mother contracting flu or any other infection. Nope: because there was technically a bed at the third place that had agreed to take her mother so Medicare will NOT pay for the less expensive, safer and more convenient choice of in home care.

I spent days wrestling with Medicare looking for a bed at a decent rehab facility for my own mother after her knee replacement. Before she was due to go to rehab, in the hospital, she fell during a PT session. My mother had had a stroke many years previously and was dealing with dementia in addition to the knee surgery. The knee surgery was done to try to keep her home rather than forcing her into a nursing home which would have happened if she were to become confined to a wheelchair. After the fall, my mother, the stroke patient/knee replacement patient, who had never been a confident person, would not attempt PT. The nursing home called my siblings, who had been there every say since surgery (I was scheduled to be there at the end of it--we staggered our time off to get the longest amount of family involvement possible) and said they were dismissing my mother for 'failure to progress.' Oh, and she had a UTI. So they dismissed a dementia patient who could not support her weight, even with a walker and who had a UTI (all of these will exacerbate dementia tremendously, at least temporarily) to a home that was not handicapped accessible nor was it able to be made wheel chair accessible. It was a small home with narrow doorways and about 40 years of accumulated stuff in it. Medicare rules. Fortunately, I was already scheduled to be there but I literally was in the position of having to provide care for my mother, including toileting her safely although she seriously outweighed me and was too impaired to be helpful in this, who had dementia and due to the UTI, required toileting every couple of hours around the clock. It was not a safe situation for my mother.

Fortunately, the adult day care where she attended prior to the surgery allowed her to come for some hours during the day so that I could locate a rehab place with a bed qualified for not just Medicare but also Medicaid. This is an extremely difficult task as Medicaid beds are limited due to the fact that they reimburse far short of the actual costs of providing whatever care is needed. Medicare is getting to that point.

THIS needs to be fixed.

A more sane approach would be to completely eliminate such things as 'in network' discounts or availability. Everyone is in the same network. Insurance companies could NOT negotiate lower prices in return for directing more of their patients to the facility. Insurance companies could NOT determine the best treatment or care for a patient. That would be determined by the patient and the provider and if appropriate, the patient's family.

Now, maybe when you write Medicare you mean something like the system in Canada. I would be quite happy with that. But the US Medicare system? NO,

 

[Elixir]

There are caps in some places - I even got a refund check once, and it was shockingly large. But all they really to do as SOP is to bonus the execs, so there is no "excess" profit.

Hmm, not so sure about that.

This guy crunches some numbers and concludes Heath Insurance Company CEO compensation costs about 42 cents per member per year.

https://www.forbes.com/sites/theapo...d-redistributed-it-to-members/2/#41693c5e660a

That's ONE guy (x how many million subscribers? I'll take it!). There are hundreds of execs in every insurance company. When I got that big refund check, I actually called up Anthem and asked wtf. They explained that it was excess profit, above and beyond what they were allowed to keep. So we had a brief discussion about how Anthem's responsibility was to ADJUST top level compensation ("top level" to that person may have meant anyone above them - I don't know) in anticipation the coming fiscal year's results. (Apparently they're not allowed to just go "looky! we found a billion extra dollars so here some for you, and some for you..."). They are practiced at the art of keeping their profits withing the permitted range, since issuing refunds doesn't benefit them as much as paying their top people more.

 

[dismal]

There are caps in some places - I even got a refund check once, and it was shockingly large. But all they really to do as SOP is to bonus the execs, so there is no "excess" profit.

Hmm, not so sure about that.

This guy crunches some numbers and concludes Heath Insurance Company CEO compensation costs about 42 cents per member per year.

https://www.forbes.com/sites/theapo...d-redistributed-it-to-members/2/#41693c5e660a

That's ONE guy (x how many million subscribers? I'll take it!). There are hundreds of execs in every insurance company. When I got that big refund check, I actually called up Anthem and asked wtf. They explained that it was excess profit, above and beyond what they were allowed to keep. So we had a brief discussion about how Anthem's responsibility was to ADJUST top level compensation ("top level" to that person may have meant anyone above them - I don't know) in anticipation the coming fiscal year's results. (Apparently they're not allowed to just go "looky! we found a billion extra dollars so here some for you, and some for you..."). They are practiced at the art of keeping their profits withing the permitted range, since issuing refunds doesn't benefit them as much as paying their top people more.

So, let's assume the top 100 guys make on average what percent of what the CEO makes? 25% sounds generous to me.

Now some math: $0.42 (cents per member for the CEO) *100 (for the top 100 guys) *.25 (for the ratio of what those guys make compared to the CEO) = $10.50 per member per year.

That does not seem significant somehow. What with health insurance cost per capita > $10,000.

 

[Elixir]

That's ONE guy (x how many million subscribers? I'll take it!). There are hundreds of execs in every insurance company. When I got that big refund check, I actually called up Anthem and asked wtf. They explained that it was excess profit, above and beyond what they were allowed to keep. So we had a brief discussion about how Anthem's responsibility was to ADJUST top level compensation ("top level" to that person may have meant anyone above them - I don't know) in anticipation the coming fiscal year's results. (Apparently they're not allowed to just go "looky! we found a billion extra dollars so here some for you, and some for you..."). They are practiced at the art of keeping their profits withing the permitted range, since issuing refunds doesn't benefit them as much as paying their top people more.

So, let's assume the top 100 guys make on average what percent of what the CEO makes? 25% sounds generous to me.

Now some math: $0.42 (cents per member for the CEO) *100 (for the top 100 guys) *.25 (for the ratio of what those guys make compared to the CEO) = $10.50 per member per year.

That does not seem significant somehow. What with health insurance cost per capita > $10,000.

I won't argue with that math, as most of the numbers could be reasonably adjusted to make almost any picture look real.
Instead, I ask for your explanation for the demonstrable fact that people in countries with UHC get better health outcomes at lower cost, and don't live in fear of being personally bankrupted by a single disease or injury. More efficient administration? Maybe they are just healthier right out of the gate because of the lower level of worry about it?
What do you think, dismal? I'd really like to know, as you have shown that despite an apparent irrational opposition to anything that whiffs of socialism which mentally incapacitates a lot of folks, you seem to have retained some ability to reason in a straight line. So I'll probably respect your opinion on this even if I disagree.

 

[ZiprHead]

Executive compensation at United Healthcare.

I also have heard that they have at least 100 lower level executives making more than $1,000,000 per year.

 

[James Brown]

I'm not sure that profits is the best metric to measure. There's a reason why actors negotiate with movie studios over percentages of revenues, not percentages of profits, because creative accounting can turn high revenues into minuscule profits.

When it comes to health insurance, I believe a better metric is the Medical Loss Ratio (MLR), the percentage of your premiums that go toward health expenditures. The Platonic ideal would be 100%, wouldn't it? Yet pre-Obamacare, 80% was standard for for-profit health insurance companies.

Link

2011 was the first year that insurance companies were required to bring down their overhead, unless they were approved for waivers. So what happens if the companies do not meet their overhead target? You get a rebate. The final numbers are yet to be released, but Kaiser Family Foundation estimates that $1.3 billion will be returned back to employers and consumers.

So I run an insurance company and collect $100 in premiums. I get creative with what procedures I decide aren't covered. $75 of the premiums goes to the doctor, $20 gets written off as "overhead", and I report a profit of $5 to Uncle Sam, paying $1 in taxes. Meanwhile Medicare collects $100, pays $95 to the doctor and declares $5 in overhead. Which scenario would provide better outcomes for patients?

 

[Loren Pechtel]

If that were the case medical care costs would have soared in the rest of the developed world just like it did in the US. Do you think that the entire rest of the developed world now does less for their patients to make our products not competitive because of our high medical costs?


I am sorry, I have taken over the thread, answering questions not directed to me. I have been told this is considered impolite here.

Rationing. People like to pretend it doesn't happen in UHC countries but it does. It's just subtly built into the system.

Despite our very poor performance at covering people our medical outcomes are at the front of the pack if not #1--and the only way that can happen is if the care that people actually get is far beyond to make up for the ones that don't get care in the first place.

bullshit. prove it

Here's a start:

https://www.cdc.gov/cancer/dcpc/research/articles/concord-2.htm

- - - Updated - - -

There are caps in some places - I even got a refund check once, and it was shockingly large. But all they really to do as SOP is to bonus the execs, so there is no "excess" profit.

Hmm, not so sure about that.

This guy crunches some numbers and concludes Heath Insurance Company CEO compensation costs about 42 cents per member per year.

https://www.forbes.com/sites/theapo...d-redistributed-it-to-members/2/#41693c5e660a

Similar to what I've seen doing the calculation for other CEOs.

 

[dismal]

That's ONE guy (x how many million subscribers? I'll take it!). There are hundreds of execs in every insurance company. When I got that big refund check, I actually called up Anthem and asked wtf. They explained that it was excess profit, above and beyond what they were allowed to keep. So we had a brief discussion about how Anthem's responsibility was to ADJUST top level compensation ("top level" to that person may have meant anyone above them - I don't know) in anticipation the coming fiscal year's results. (Apparently they're not allowed to just go "looky! we found a billion extra dollars so here some for you, and some for you..."). They are practiced at the art of keeping their profits withing the permitted range, since issuing refunds doesn't benefit them as much as paying their top people more.

So, let's assume the top 100 guys make on average what percent of what the CEO makes? 25% sounds generous to me.

Now some math: $0.42 (cents per member for the CEO) *100 (for the top 100 guys) *.25 (for the ratio of what those guys make compared to the CEO) = $10.50 per member per year.

That does not seem significant somehow. What with health insurance cost per capita > $10,000.

I won't argue with that math, as most of the numbers could be reasonably adjusted to make almost any picture look real.
Instead, I ask for your explanation for the demonstrable fact that people in countries with UHC get better health outcomes at lower cost, and don't live in fear of being personally bankrupted by a single disease or injury. More efficient administration? Maybe they are just healthier right out of the gate because of the lower level of worry about it?
What do you think, dismal? I'd really like to know, as you have shown that despite an apparent irrational opposition to anything that whiffs of socialism which mentally incapacitates a lot of folks, you seem to have retained some ability to reason in a straight line. So I'll probably respect your opinion on this even if I disagree.

I'm all for UHC as long as there is a Constitutional Amendment that restricts how much we spend on it to an amount similar to that which other countries spend on it. The OECD average looks to be around $2500 per capita. if you want to toss out the likes of Turkey, Estonia and Mexico and take a peer group of modern countries with UHC like France, Canada, Sweden, etc you might get that up to $3000-3300 or so.

 

[Horatio Parker]

So I run an insurance company and collect $100 in premiums. I get creative with what procedures I decide aren't covered. $75 of the premiums goes to the doctor, $20 gets written off as "overhead", and I report a profit of $5 to Uncle Sam, paying $1 in taxes. Meanwhile Medicare collects $100, pays $95 to the doctor and declares $5 in overhead. Which scenario would provide better outcomes for patients?

This is why some economists say UHC would be deflationary.

 

[coloradoatheist]

So I run an insurance company and collect $100 in premiums. I get creative with what procedures I decide aren't covered. $75 of the premiums goes to the doctor, $20 gets written off as "overhead", and I report a profit of $5 to Uncle Sam, paying $1 in taxes. Meanwhile Medicare collects $100, pays $95 to the doctor and declares $5 in overhead. Which scenario would provide better outcomes for patients?

This is why some economists say UHC would be deflationary.

That depends on who wins the chicken and egg game that will be played. Right now 30% or more of doctors won't accept medicaid patients because the reimbursement level is too low. Will the government and people be okay with a 20% decline in medical offices/facilities?

 

[Alcoholic Actuary]

I'm not sure that profits is the best metric to measure. There's a reason why actors negotiate with movie studios over percentages of revenues, not percentages of profits, because creative accounting can turn high revenues into minuscule profits.

When it comes to health insurance, I believe a better metric is the Medical Loss Ratio (MLR), the percentage of your premiums that go toward health expenditures. The Platonic ideal would be 100%, wouldn't it? Yet pre-Obamacare, 80% was standard for for-profit health insurance companies.

Link

2011 was the first year that insurance companies were required to bring down their overhead, unless they were approved for waivers. So what happens if the companies do not meet their overhead target? You get a rebate. The final numbers are yet to be released, but Kaiser Family Foundation estimates that $1.3 billion will be returned back to employers and consumers.

So I run an insurance company and collect $100 in premiums. I get creative with what procedures I decide aren't covered. $75 of the premiums goes to the doctor, $20 gets written off as "overhead", and I report a profit of $5 to Uncle Sam, paying $1 in taxes. Meanwhile Medicare collects $100, pays $95 to the doctor and declares $5 in overhead. Which scenario would provide better outcomes for patients?

Medicare Loss Ratios are also around or just under 80%. It's pretty standard.

http://www.naic.org/prod_serv/MED-BB-16.pdf (page 12)


aa

 

[Horatio Parker]

So I run an insurance company and collect $100 in premiums. I get creative with what procedures I decide aren't covered. $75 of the premiums goes to the doctor, $20 gets written off as "overhead", and I report a profit of $5 to Uncle Sam, paying $1 in taxes. Meanwhile Medicare collects $100, pays $95 to the doctor and declares $5 in overhead. Which scenario would provide better outcomes for patients?

This is why some economists say UHC would be deflationary.

That depends on who wins the chicken and egg game that will be played. Right now 30% or more of doctors won't accept medicaid patients because the reimbursement level is too low. Will the government and people be okay with a 20% decline in medical offices/facilities?

Too bad the govt has no leverage over the medical industry.

 

[coloradoatheist]

That depends on who wins the chicken and egg game that will be played. Right now 30% or more of doctors won't accept medicaid patients because the reimbursement level is too low. Will the government and people be okay with a 20% decline in medical offices/facilities?

Too bad the govt has no leverage over the medical industry.

And every year they said they were going to cut the reimbursement rates to doctors but they always kept raising it. As I said chicken game. How long would people in the US suffer to control costs?

 

[Loren Pechtel]

I'm all for UHC as long as there is a Constitutional Amendment that restricts how much we spend on it to an amount similar to that which other countries spend on it. The OECD average looks to be around $2500 per capita. if you want to toss out the likes of Turkey, Estonia and Mexico and take a peer group of modern countries with UHC like France, Canada, Sweden, etc you might get that up to $3000-3300 or so.

Thus ensuring our system can't be better than theirs. Bad idea.

And you've got some old data there.