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Fox
Joined: 04 Mar 2009
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 Posted: Wed Oct 28, 2009 10:38 pm Post subject: |
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| Rusty Shackleford wrote: |
| Can you please explain how the insurance companies have any influence over how much hospitals choose to charge for care? |
Any given health insurance company has a very strong bargaining hand with regards to the prices it's willing to pay any given hospital, simply by virtue of the number of patient's they "represent". If you want into a hospital and try to bargain or haggle, they'd laugh at you. If the representative of an insurance company walks in and does the same thing, they're taken very seriously, because if the hospital doesn't play ball, they're out many potential customers.
But when an insurance company strong-arms hospitals regarding price agreements, that doesn't actually make the prices required to provide such services go down, it just means they get less profit per patient (if any; for some procedures they literally get pushed into the point of unprofitability as part of their agreements). So if insurance companies pay less, that cost gets transfered elsewhere. Specifically, it gets transfered to people who don't have insurance, which is why if you pay out of pocket, you're going to pay substantially more than an insurance company would pay for the same procedure. They pay less than the true value of the service, and you pay more. Take them out of the equation, and everyone ends up paying the true value.
| Rusty Shackleford wrote: |
| Do car accident insurance companies have any influence over how much it costs to fix your car? |
Unlike the medical industry -- where I have a parent who has worked for years in the administration and has taught me quite a bit about how business is done there -- I don't know much about how car companies interact with mechanics. It wouldn't surprise me if they did, though. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Wed Oct 28, 2009 11:01 pm Post subject: |
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| If the insurance companies can "strong arm" health care providers so effectively, why do the insurers have such slim profit margins? |
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Fox
Joined: 04 Mar 2009
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| Posted: Wed Oct 28, 2009 11:21 pm Post subject: |
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| Rusty Shackleford wrote: |
| If the insurance companies can "strong arm" health care providers so effectively, why do the insurers have such slim profit margins? |
Rusty, the only reason they make any profit at all is because they strong arm health care providers. They don't produce anything of value to society; their entire business model is to sit between prospective patients and health care providers and siphon off money. They are 100% parasitic. Unlike things like home insurance or flood insurance -- which distribute risk for comparatively rare, catastrophic events -- health care deals in things that all of us will with near certainty need. How do you distribute risk for regular checkups? How do you distribute risk for preventative care? How do you distribute risk for end-of-life care? You can't, but the industry still profits off of these things, and they do it by strong arming in a parasitic fashion, and doing their best to make sure you turn to them or you do without.
It's a scam. The fact that the scam allegedly has "slim profit margins" doesn't make it less of a scam, especially how much it costs our nations in terms of both money and lives to maintain it. Their profits are by no means unreasonable given health care would unarguably be cheaper for our nation if they didn't exist. Also bear in mind those profits are limited in part because the government does limit their behavior. If the industry were totally unregulated, of course profits would be substantantially higher, at a greater human cost. |
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seonsengnimble
Joined: 02 Jun 2009
Location: taking a ride on the magic English bus
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| Posted: Thu Oct 29, 2009 1:38 am Post subject: |
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| Fox wrote: |
Again, if it wasn't reasonably priced, no one would take advantage of it. It would be in a hospital's best interests to ensure prices were reasonable. It is, however, in the insurance industry's interests to do their best to ensure prices are unreasonable, so you have to rely on them. They've had plenty of time to work towards this end. Don't be fooled.
Without the insurance industry, your pay check would be higher (both because you wouldn't be having pay deducted, and because the hidden part your employer pays could go to you instead), and prices would be lower due to lack of insurance industry interference and people making more realistic health care choices due to the money coming right out of their pocket. We'd all be better off. |
While this seems for the most part true, there appear to be other factors involved in the steep prices. Pharmaceutical companies can still charge exorbitant prices, especially when the medicine they produce is still protected by copyright. If one has to buy insulin to live, and there is only one company who produces the insulin which works best for this person, there is no incentive to reduce the cost of this insulin.
If insurance companies are the main reason that medical care costs so much, then why are prices similar in Korea. Most people use the NHIS, but for regular tests it costs around 150,000won without insurance. The NHIS is a government program which is not after a profit, so why would they be persuading hospitals to shift the costs to the uninsured?
I agree that insurance companies are a big factor in the ridiculous price of medical care, but there are other factors as well. If your idea was implemented, more regulation would still be necessary in order to bring the basic costs down to a reasonable level. |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu Oct 29, 2009 1:57 am Post subject: |
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| seonsengnimble wrote: |
| Fox wrote: |
Again, if it wasn't reasonably priced, no one would take advantage of it. It would be in a hospital's best interests to ensure prices were reasonable. It is, however, in the insurance industry's interests to do their best to ensure prices are unreasonable, so you have to rely on them. They've had plenty of time to work towards this end. Don't be fooled.
Without the insurance industry, your pay check would be higher (both because you wouldn't be having pay deducted, and because the hidden part your employer pays could go to you instead), and prices would be lower due to lack of insurance industry interference and people making more realistic health care choices due to the money coming right out of their pocket. We'd all be better off. |
While this seems for the most part true, there appear to be other factors involved in the steep prices. |
Definitely true. Remember, all I'm saying is that we'd be better off without insurance company interference. Other factors -- like pharmaceutical companies overcharging -- are going to remain the same no matter what system we use. I feel those things are a separate (but important) issue, especially the pharmaceuticals bit.
| seonsengnimble wrote: |
| If insurance companies are the main reason that medical care costs so much, then why are prices similar in Korea. Most people use the NHIS, but for regular tests it costs around 150,000won without insurance. The NHIS is a government program which is not after a profit, so why would they be persuading hospitals to shift the costs to the uninsured? |
I don't think that's a similar price, though. 150,000 won is less than I'd expect to pay for such a thing in America, for instance. It's not dirt cheap I'll admit, but there's going to be some not inconsiderable price associated with quality medical care no matter what. There's a limit to how far you can actually push down the value of a given unit of a trained medical professional's time. If we insist on highly educated doctors being involved in things like basic check-ups, it's going to cost. The best answer to lowering routine health care like basic check-ups may simply to be to extricate doctors from the process. I've known many mothers who could probably diagnose you very accurately if you aren't feeling well, I see no reason to believe one must be a full doctor to perform such a task. A nurse-level of education is probably sufficient for the basics, with doctors only being called in in case of irregularities. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu Oct 29, 2009 2:20 am Post subject: |
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| seonsengnimble wrote: |
While this seems for the most part true, there appear to be other factors involved in the steep prices. Pharmaceutical companies can still charge exorbitant prices, especially when the medicine they produce is still protected by copyright. If one has to buy insulin to live, and there is only one company who produces the insulin which works best for this person, there is no incentive to reduce the cost of this insulin.
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There has to be an incentive for the drug company to produce the insulin in the first place. How many times have govt (or govt regs) created life saving drugs?
| Quote: |
| If insurance companies are the main reason that medical care costs so much, then why are prices similar in Korea. Most people use the NHIS, but for regular tests it costs around 150,000won without insurance. The NHIS is a government program which is not after a profit, so why would they be persuading hospitals to shift the costs to the uninsured? |
It also loses a butt load of money and needs to be propped up with govt subsidies.
| Quote: |
| I agree that insurance companies are a big factor in the ridiculous price of medical care, but there are other factors as well. If your idea was implemented, more regulation would still be necessary in order to bring the basic costs down to a reasonable level. |
You can't regulate costs away. Someone always pays somewhere. |
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seonsengnimble
Joined: 02 Jun 2009
Location: taking a ride on the magic English bus
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| Posted: Thu Oct 29, 2009 3:07 am Post subject: |
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| Rusty Shackleford wrote: |
There has to be an incentive for the drug company to produce the insulin in the first place. How many times have govt (or govt regs) created life saving drugs? |
There's a difference between profit and ridiculous profit. If you have something that people need, no competition and no restriction, you can charge whatever you want.
| Quote: |
You can't regulate costs away. Someone always pays somewhere. |
You can't regulate costs away, but you can regulate them down to a reasonable level or spread costs so that people have access to necessities. If something costs $1 to produce and I charge $100 for it, a significant portion of that cost can then, in fact be regulated away. For things which are ridiculously expensive because the cost of producing it is high, the cost can be reduced for the individual by spreading the cost to many. I know spreading the wealth is a frightening idea, but that is what a society does for things which are necessary. My taxes pay for schools I don't attend, wars I don't wage, firefighters even though I've never had a fire, police whose services I haven't used, and aid for other problems I don't have. I still don't understand why adding medicine to that list is such a scandalous idea. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Oct 29, 2009 6:32 am Post subject: |
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| There has to be an incentive for the drug company to produce the insulin in the first place. How many times have govt (or govt regs) created life saving drugs? |
Actually, quite a large number of medical discoveries, including 'scriptions, came from government funded medical research at universities. Indeed, a large number of the technological breakthroughs we consider of coming from the market have really been publicly funded, though the profits are privatized. The Americans, if they insisted that public inventions earn public revenues, could clean quite a bit of their budget up quickly. |
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Rusty Shackleford
Joined: 08 May 2008
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