This sort of thing gets to two critical problems of the American system:
1. It is largely designed to make money, not actually help patients. So every step in the healthcare chain that can extract a bit of value will do so, largely to boost profits.
2. Insane complexity with limited transparency. How much will something cost? Hard to tell. Will it be covered? Who knows?
On the opacity, I have one informative anecdote. I had a single blood test done awhile back and no one knew if insurance would cover it, or which of the dozen or so billing codes it involved (taking the sample, delivering the sample, testing the sample, etc.) might be covered. It was an expensive test so I spent days bouncing between the doctor's billing team and the insurance company until the settled answer was: No one knows, do the test and insurance will decide. So I did it and insurance denied covering the doctor-recommended test. The salaries involved for all the billing people (and my time) would have covered the cost of the test. </rant>
I lost some money, or at least had a hard time using it, because I was quoted a price for something, set the FSA for the next year based on that, and then the billing ended up where only some of the price was eligible for FSA.
Combined with the PITA level, there's no way I'm doing it again. I can't see how it's worth my time. One of these three options is very likely:
a) my income level is low, so every dollar counts, but my marginal tax rate is also low, so spending a ton of extra time on this is not worth saving ~ 15% on taxes for health care
b) my income level is high, so my marginal tax rate is high, but saving 40% of taxes for health care is not worth the time, because health care is not a meaningful amount of income
c) my health care spending is high relative to income, and I can deduct health care costs on my tax return. Then I can deduct a lot more than the FSA will reimburse for, and the records don't need to satisfy a third party, unless I'm audited by the IRS.
There are a few caveats with the medical expense deduction.
* It's only a deduction for income tax. FSAs let you save on FICA as well.
* It's an itemized deduction. You only benefit after your total itemized deductions exceed the standard deduction. Fewer people are itemizing nowadays because the federal standard deduction is large.
* There's a 7.5% of AGI floor: you can only count medical expenses that exceed this fraction of your income.
It is a relatively easy fix tbh. You spend on medical bills through the account like you do right now, but the way you fund it is your post tax contributions. At the end of the year the account sends you a statement of what you used and you can use it to get the tax paid on the money back when you file the taxes.
> At the end of the year the account sends you a statement of what you used and you can use it to get the tax paid on the money back when you file the taxes.
If you underestimate the amount you spend by more than the rollover limit, you can't get that money back.
So on top of the broken employer-tied health insurance system, we have gamified the financing of out of pocket medical expenses.
On top of that, if you lose your job part way through the year, you lose the balance of any FSA funds remaining (they belong to your employer - I found that out the hard way).
The comment was about how to fix the current FSA. Instead of funding it with pre tax dollars and then losing it if you don’t use it, you fund it with post tax dollars and then get a reimbursement on your tax filing annually. That way, you can fund it as you need, spend it and then get back the tax because you spent it on medical expenses.
And if you're wrong on your medical expense paperwork it could be a felony!
Why shouldn't the institutions that do this all day and claim it as their special expertise handle all of this? Why should I even be /capable/ of losing money due to my lack of experience with the system?
The money is forfeited back to the employer. There should be a law that money is now taxed and forwarded to the employee in their regular payroll.
This system is designed to screw over regular consumers.
What do you mean by 'use the account'? Spend the money? That's the problem. If you don't have enough expenses you just lose the money. That's why I've never used one of these.
If by "the entire thread", you mean all the ancestors of this comment, I already have.
I'm not sure which of these is supposed to be the context I'm missing. It may be the "It is a relatively easy fix tbh..." comment. I couldn't understand the wording of accounting procedure there.
It’s not great for everyone but if you have kids with braces, family members who need yearly glasses, consistent prescription costs, etc then it is pretty easy and worthwhile.
FSA does have the concept of rollover of up to $600 but its up to the employer to decide. I imagine that full rollover is not allowed because otherwise people would use the FSA to defer some tax payments to end of year. But there are ways they could have handled it better.
I don’t understand why any decision maker in any business in the USA chooses to offer their employees (and hence themselves) health FSAs at all, especially when the much superior in every way Fidelity HSA is available.
All the FSA money in your account is available immediately at the beginning of the year. Ironically that would make it a better choice for anyone with a lot of medical expenses on an HDHP if it wasn’t for the fact that FSAs are capped by law.
As someone who does deal with enough medical stuff to clear the deductible (and sometimes the OOP max) on their normal health plan annually, it’s still much more convenient, again because the money is all there at the beginning of the year when the expenses are highest
That assumes your employer does any contributions to your HSA. And if your employer is sticking you with an HDHP, that’s not always a given. Your own payroll deductions are pay-as-you-go
FSAs are limited in scope if you have a HDHP by law. Only LPFSAs are allowed. HSAs don’t have that restriction other than you have to be on a HDHP to get it
Yup, I agree HSA is superior but depending on your situation (and plans offered), the HDHP can be much more expensive out of pocket[1], even if you're paying with after tax dollars. Sweet spot I think is using a good low deductible plan when it makes sense but having a spouse with an HSA which both spouses can use for expenses.
[1]: or so it seems, I tried to figure this out earlier in the year and the data is just lacking in order to make a perfect decision.
HSAs are only available alongside high deductible plans (HDHP), which aren't necessarily ideal in all situations. FSAs are the only option like that if you don't have an HDHP.
Surely, that is offset by having to forfeit or waste any FSA money not needed by the end of the year. It really only makes sense if you have a minimum amount of guaranteed healthcare expenses every year.
What is the point of having a low deductible when you could put the premium difference in a HSA and use it on either the deductible or something uncovered?
The math on whether you are ahead with the HSA or not is non trivial, especially if you are married and neither employer offers any subsidy when you put your spouse in your plan. HSAs are often better, but it's a very unfortunate math problem, where you carry quite a bit of risk. The HSA contributions from your employer are often nowhere near enough to make it win all the time. If your employer's does, consider yourself lucky. On any given open enrollment, my household has at least 30 combinations of healthcare plans to consider, and that's ignoring dentals, visions and the like
There are some cases where an HSA is unavailable. I've had an employer not offer a high deductible plan. I've had an employer offer a high deductible plan, but the insurer not supply it in my home state.
There are cases where it doesn't make fiscal sense. One employer covered 1x premium/employee(spouses and kids were full rate).
I've never seen the point of HSAs, either. The only benefit is the tax difference. There are (usually unknown, unstated upfront) plan fees that eat into that, and coupled with the higher deductibles and worse plan coverage, you're going to pay more out of pocket. It's never been clear to me if (higher OOP + plan fees) < (tax savings) is true, like they want you to believe.
An employer sponsored HSA is the single most tax advantaged account in the US, and Fidelity HSA have no fees. No FICA tax, no income tax going in, on investment returns, and coming out. Worth tens of thousands of dollars over 20, 30, 40+ years.
If your employer is shitty and doesn’t offer Fidelity HSA, you can also easily rollover the HSA funds to Fidelity every year to avoid the fees.
The coverage for HDHP plans is the same, since it’s the same insurer. The only change is deductible/copay/oop max, which is offset by lower premiums and higher cash flow for younger/healthier/higher earners shouldn’t matter.
lol totally agree. At my first job I had one, and totally misjudged. I ended up with an extra thousand dollars left and then had to read the fine print on what to spend it on - ended up buying a 10 pack of acupuncture sessions that I didn’t need but were very relaxing
Indeed. I don’t understand why they cant just make medical expenses tax-deductible up to a certain amount. The effect would be the same. Why do I need a separate account for it, and why do I have to guess how much I’ll need every year (as you pointed out)?
I guess at least part of the answer is that the companies administering FSAs make money out of this system. Sigh.
The issue is that it only kicks in when you itemize your deductions and it has something like a $10k cap. The standard deduction is 15k for a single and 30k married.
Unless you have a bunch of other things to deduct, it's often the right choice to just use the standard deduction.
Not so much anymore. The standard deduction for a married couple is now above 30k. It would take a large mortgage to pay that kind of interest in a single year. (Principle is not deductible; only interest)
HSAs are your money regardless once you have it (except management fees). So you can spend it until it is gone. FSAs are a very specific set aside for a single year of billing, you can neither spend it on a bill for say, December the year before, nor use it for medical care in January the year after.
where "approved" means approved by the FSA plan administrator, not by your doctor, even with prescription? Which gym was this? a large chain? IME very few gyms are approved. (which is bad health policy, considering how good they are at preventative medicine.)
Medicine not in formulary. Their clinical department decided it was not worth covering for $reasons. The Pharmacy, likely to be considered a preferred pharmacy, signed a contract to be bound by that company's clinical formulary for policyholders.
$45 was probably cash price, the they can let it go for if they do their ordering through a pharmacy supply group.
$12 may be a price with a discount program like GoodRx applied. Data changes hands behind the scenes to make the lower price at the till possible. Don't know how GoodRx works, but been around long enough to know you're probably the product.
You'll be amazed the complexity of the pharmacy benefits management complex.
t. Been there, seen it, tried to fix it best I could, left in abject horror.
> Don't know how GoodRx works, but been around long enough to know you're probably the product.
- GoodRx was penalized $1.5m by the FTC 2/2023 [0] for sharing sensitive personal health information with third-party advertising companies (Facebook, Google, et al), without user consent. Then in 2024 it paid a $25m settlement arising from that action [1].
- GoodRx isn't subject to HIPAA, it can legally share "non-medical" information, i.e. your prescriptions, which often have a one-to-one (or one-to-few) correspondence to specific conditions. Hence, sidestepping HIPAA.
- its business model relies on collecting user data, which may be a concern for privacy-conscious individuals.
Turns out there are rational commercial players in these markets if you just go all-cash. The price is abandoning the incantations and local pharmacies, hospitals, ignoring your insurance. Harder to do that with services, but it’s coming as well.
You did nothing from their point of view except waive having them cover the claim, thusly leaving more money on their hands to be managed longer. Your "price discovery" isn't something they aren't aware of. On the contrary, their surveillance/clinical team have been crunching the numbers and making unilateral decisions on how the population is best guided to drugs based on their bottom line benefit to the insurer.
You don't really factor into it except as an actuarial data point. But you might have kicked off an overpayment check back to the consumer in 12 months because golly gee, those pesky regulations! Don't worry though, you can hand it back because the premiums went up again!
I found another really interesting one when my wife needed $30k in dental surgery. We hurried up and got the American marriage so that they could use my dental insurance only to find out that my plan has a LIFETIME LIMIT OF $1200. But what came to our rescue was good old collective bargaining! They call it a discount plan and basically the way it works is that for a small fee an insurance company will essentially draw you up a plan that counts you as a member but where the insurance company is explicitly not liable to pay for anything at all under any circumstances. The practical upshot is that you as a new Crap-Tier member of this insurance plan get the same negotiated rates as everyone else on this insurance plan, including the ones who pay through the nose. You still have to pay everything out of pocket, but to use this as an example "everything" went from $30k to $18k with the stroke of a pen and $50 in signup fees. This is one of the few things that an insurance company is doing that I think is actually great. The rates are exceedingly reasonable, the upside is amazing and because it's not technically insurance there's no pesky BS about open enrollment or you have to be married or you can only use it if your costs are above x once you've paid y and only if you've spent more than z this year but less than alpha your entire lifetime etc. Purely and simply walking into the office and going "Hey, there's ten thousand of us. Give us a fair rate and gain ten thousand customers or don't and don't."
this is actually what it's like getting pants hemmed at men's wearhouse once the salespeople realize you won't be paying their rent today with the commission on a big purchase. I needed them in a week. Dude quoted me 3 weeks, then 10 days, then 8 days, then said he could get it done in 15 minutes. I get that under the hood capitalism is about charging the most you can get away with and offering the least the other guy will expect, and he's supposed to do the same and y'all strike a middle ground that makes nobody happy but is acceptable to everyone. But you're not supposed to flat out look at me and go "What's the worst you'll accept from me right now?"
I’ve found, as a fairly recent phenomenon, it’s often higher than the insurance price. The pessimist in me thinks that insurance companies have worked to close that loophole. They need to maintain the illusion of their utility, after all.
not magic words. sometimes cash price is non-insurance price and is 3x the insurance price. since insurance and providers have a negotiated rates. so paying cash means paying 3-5x
>Here are the magic words in US Health Care: "What is the cash price?"
I'm not so sure about that. Especially in a hospital setting.
Many years ago, I was admitted to the hospital for several days as it was suspected (wrongly, but that's another issue with the perverse incentives in US "healthcare") that I had MRSA and the doctor wanted me on IV antibiotics while testing proceeded.
I spent three days in the hospital, getting discharged when the tests came back negative for MRSA.
Shortly thereafter, I received a detailed "explanation of benefits" (EOB) from my insurer, which put the cost of my hospital stay at ~USD$12,000 which included stays in two hospital rooms simultaneously as well as a pap smear (despite the fact that I do not have a cervix). When I complained about this, the insurer tried to make it seem unimportant, but I pressed the issue as both the hospital and the insurer seemed to be involved in some sort of fraud WRT billing.
I was told I shouldn't care because I wasn't actually paying, but I persisted as I was concerned that there was something hinky going on. That culminated in a conference call with my insurance company, the hospital's accounts receivable group and me.
The two other parties talked in insurance billing jargon for a while, but when pressed, they stated that the charges on the "explanation of benefits" was a fiction and that the insurance company and hospital group's contract set a USD$1,500/day flat rate for patients admitted to the hospital's facilities -- roughly 1/3 of the "costs" cited in the EOB.
The made up stuff (which they didn't even try to hide that it was made up) was there as "protection" for the hospital group as the "cash price" of such services, even though I couldn't have received such services (two rooms at the same time? A pap smear[0] despite the fact that I don't have a female reproductive system, nor do/did I present as anything other than a cis male?).
I imagine that there may be some cases where a "cash price" actually does reflect costs and might even be less than insurance costs (although that seems unlikely given my experience), but insurers and healthcare providers do and have for decades gamed the "cash price" to justify the insane overcharging of healthcare services. YMMV.
Right, that's the part that most consumers don't understand about inpatient bills and insurance claims. They hear stories about a "$100 Tylenol" or whatever but those line items often don't actually impact the amount charged to the patient's health plan. Many of the numbers are completely artificial and essentially only serve as placeholders for the accounting and ERP systems. I'm not trying to defend that system but for complex path dependency reasons it's difficult for anyone to reform.
"What is the cash price?" magically puts you back in the land of Classical Capitalism, where the service provider wants to keep you as a customer and knows their internal costs and you as a consumer of the service can evaluate their reputation for quality and cost vs other providers.
It's adding 3rd parties like "insurance" (which only works as insurance in very limited catastrophic circumstances) and government plans that create the nightmare of the Mystery Price Only Knowable After Service Has Been Rendered.
You go to your doctor, you have a suspected tick bite with a bullseye pattern around it and a red streak running away. Your doctor is concerned about tick born illnesses and the red streak suspecting the start of sepsis. They need to determine asap if they can treat you with docycline or if you need IV antibiotics. They need to assess your blood for a CBC to determine immediate risk factors like sepsis. They also need to asses for pathogens like Lyme disease, alpha-gal syndrome or that other tick disease I can't remember. This will determine what antibiotics will be effective, and if eating red meat will make you anaphylaxic, and you need to see an allergist if you ever want to eat red meat again
There's a place in town that can do the CBC, the test for alpha-gal is only done by two labs in the country, nearest one is in south Carolina two states away. There's more, but not many more that test for the other two diseases, the closest one is almost the whole country away in salt lake city.
You have to know ASAP to determine your next course of action.
In your proposal, do you call south Carolina and then fly there? Do you do the same to salt lake city? You've still got to find and negotiate with someone local for a CBC. Salt lake city doesn't have the same balance billing law your home state does, you could pay more than your cash price there if they involve another provider.
What do you do? Gotta act fast, or you could wind up with life long neurologically symptoms or even die.
I had a tick bite that was irritated (but not a bullseye rash that I could see) - phoned GP practise, doctor phoned me back a couple of hours later and discussed the situation, ruled out blood tests because they said they were inconclusive at best and arranged for a 3 week course of antibiotics. My wife picked them sup from a pharmacy later that afternoon as she was in town anyway. No direct costs, no mention of money, insurance or anything at the doctors or the pharmacy...
Edit: Discussions of US healthcare all seem insanely complex to me - but it all seems to be about insurance and money - which are the last things I want to think about if I am ill or injured.
I'm not sure how much I want healthcare accessibility determined by "Classical Capitalism". The vast majority of things I buy are fundamentally optional, so the supply/demand can be negotiated. Some reasonable part of healthcare is largely non-optional.
I suppose you could make an argument that my sky-high demand should encourage new market entrants thereby balancing the supply to the market demands. However, in many healthcare cases, there are too many impediments for that to be realistic (patent exclusivity, manufacturing complexity, etc.).
In Australia I just take my blood test form to any pathology place and they do it for free (for me) and bill the government a set price from the medicare benefits schedule.
Hmm sure, but there must similarly be things that are denied right?
I lived in both systems. In a single payer system, the state essentially decide what is allowed and what is not. And with the state as a single payer, they also go back and forth on price with the hospitals.
It still is a better system overall but there is no places where you can just spend as much as you want on healthcare without some type of centralized supervision.
Yes, in Australia what and how much of it a doctor can prescribe is tightly regulated. Many medications require a specialist referral and approval. Any medical procedure requires a specialist to sign off on it.
That and there is often a 'gap' that needs to be covered for GP and specialist services, although that tends to be balanced out by much cheaper prescription costs. (Prescriptions in Canada for example easily cost 2X as much).
However, Australia has a two-tier system where you can buy private insurance cover that can cover the costs of gaps and allow you access to private hospitals. This insurance is much cheaper than the equivalent US versions.
It's not a dichotomy between single payer and US-style private insurance. You can have public healthcare that isn't single payer - that describes a good half of Europe, for example.
There are tests, proceedures etc that are 'denied' coverage by Medicare(universal health coverage) but you can try get your private health insurance to cover it, or just pay out of pocket, unless it's the doctor refusing the request as not medically necessary.
I had a test recommended once that was not covered, but my Dr explained this in advance and the cash price to me was $110. There are no 'surprise' denials after the fact.
It's absolutely fine (and required even) that single payer public healthcare doesn't cover every conceivable thing under the sun. It should cover the most common, easily scaled and mass produced items.
For the remainder, the patient should be told and know what to expect price wise - private or self-paid etc. And this also allows competition between entities offering this thing that's not covered.
Having opaque and unknown pricing (until after you've done it) is basically a form of highway robbery.
In Britain the national health service is a single payer and there are some things it won't fund, but you are still free to take out health insurance or be a self pay customer and go to a private doctor or private hospital.
In my experience, its not so much what the NHS won't fund but getting access to what it does fund in a timely fashion.
Of course there is dentistry, which is a complete nightmare... people trying to do their own extractions with a pair of pliers is the sort of thing you used to associated with the US but I've actually met some people who have tried that due to how poor NHS dental services are and how expensive private treatments are.
Weirdly enough the US is actually amazing for dentistry.
With any insurance you get 2 cleanings every year fully included and most routine fillings are almost completely covered. Easy to find appointments everywhere
My experience in Europe has been that it is super difficult to schedule anything. Waiting time of multiple months for new patients.
Yes, my (private) dental insurance in the UK is similar. If you go private then no real problem getting treatment as soon as you need it (I got an appointment in the same day recently when I broke part of a tooth).
I've had numerous encounters where doctors (and dentists) attempt to charge me for services they've already been reimbursed for from the insurance company.
It's only after hours of scouring my EOBs and being on the phone with my insurance that I then come back to the practice's office with evidence in hand, and they dismiss the charges.
I'm pretty sure this is just a racket because they expect most people not to put up a fight and just pay, or get sent to collections hell.
The amount of work you need to do as a patient in our health system is so dumb.
> No one knows, do the test and insurance will decide
Oh, someone knew but the doctors office wanted to do the expensive thing and get paid (either by you or the insurance)
Not saying the blood test was unnecessary but we have no idea what communication happened between the doctor and insurance company. Did they possibly recommend a less expensive test and the doctor decided that'd make him less money so he went forward anyway?
Health insurance companies have told me, on the phone, that they will not tell me the codes the doctor needs to charge for preventative visits in order to for my visit to be covered as preventative care (meaning I don’t have to pay anything).
However, I could tell the insurance customer service person a code, then they could tell me if it was classified as a covered preventative service.
So I, the insurance company’s customer,
Googled medical procedure codes and found some on random PDFs, and checked which ones were covered, and then I asked the doctor to provide me the services for that code.
That is American healthcare.
On the flip side, I also had a doctor’s office try to bill my insurance $25 for towels used to wipe the ultrasound jelly off my wife’s belly. My insurance didn’t pay, so the doctor’s office sent me the bill for what insurance didn’t cover, so I called the doctor’s office and asked why I am being charged $25 for the few pieces of paper towel (not even linen towel), and the receptionist said they would waive the charge.
So, moral of the story is bring your own paper towel roll when you expect to get messy at the doctor’s office.
No, I assure you, it is very common for doctors' offices not to know whether a particular procedure will be covered.
This is not just because of the capriciousness of insurance adjusters, but because they have to deal with all the 273 different variations of insurance plans that people who come through their offices might have.
In general, a doctor's primary goal will be to get you good care.
An insurance company's only goal nowadays is to make as much money as possible for as little effort as possible.
> An insurance company's only goal nowadays is to make as much money as possible
How can that be true when their profits are capped on collected premiums? Look up the Medical Loss Ratio (MLR) rule to see what I'm referring to. If you wanted to squeeze money out of people, health insurance would be the least appealing industry to do that in since you're required to spend 80-85% of premiums on medical care.
The linked article is about insurers trying to reduce spending by downcoding.
So which is it? Insurers unfairly denying reimbursement for what should be valid claims, or insurers unfairly increasing spending on claims so they can increase their profits.
Also, go look at 5, 10, and 15 year returns for the big insurers (UNH/Elevance/CVS/Cigna/Humana/Molina/Centene) if you think health insurance is a good business for earning money. Spoiler alert: they’re less than desirable, stick with SP500.
The 7 publicly listed health insurers have ~2% profit margins, with the exception of UNH at 6%, but that is due to its healthcare provider business earning higher margins.
The other insurers are almost all non profit (various BCBS affiliated insurers, Kaiser, Providence, etc).
You wrote they had 25% margins. And obviously a business with 2% profit margins is incentivized to spend less, if they didn’t, they would be out of business!
Gross versus net margin. The other commenter was saying they don't have incentives to cut costs because of the MLR limit, but that limit is a 25% margin over the cost of their "product." For a product that boils down to just moving money around, 25% is pretty good.
This is illustrated by the fact that they aren't actually bumping into the legal MLR limit currently. It would make sense if they don't care about cutting costs because the law doesn't allow them to spend less, but that's not where they are at the moment. If they could cut their medical spending by 1% they could increase their profit by 40%.
> The other commenter was saying they don't have incentives to cut costs because of the MLR limit, but that limit is a 25% margin over the cost of their "product." For a product that boils down to just moving money around, 25% is pretty good.
I don’t know where you are getting 25% from. See exhibit 2:
Medical loss ratios float between 80% to 90%, leaving 10% to 20% for operating costs and profit.
Their “product” requires enormous manpower to negotiate contracts, handle customer service, lawyers for the government, and most of all, employ doctors and pharmacists to adjudicate claims.
> It would make sense if they don't care about cutting costs because the law doesn't allow them to spend less, but that's not where they are at the moment.
Of course, and the obvious fact of the matter is insurance prices are heavily regulated and there is competition, so they already have an incentive to control costs in order to control premiums. Which is literally what their customers pay them for, to negotiate with healthcare providers with whom customers usually wouldn’t have leverage against.
>If they could cut their medical spending by 1% they could increase their profit by 40%.
Sure, but in industries like insurance and retail, the low single digit profit margins indicate a more pressing need to survive, rather than increase nominal profit.
You’re right, I had the idea that you divide by cost, not revenue. So a 20% legal maximum margin. Which is still a fair bit above what they actually achieve, so there’s plenty of motivation to reduce their medical spending.
It was not designed to make money. It was designed to cost less, in the same way the USSR was designed to make workers rich - it simply failed spectacularly.
Neoliberals dislike both regulation and public ownership, but made a Faustian bargain where they replaced public ownership with more regulation, thinking that regulation was the lessor of the two evils. In reality, it's not - like in the USSR where they had corporatised but heavily regulated "companies". A heavily regulated company doesn't make money by offering better value to customers, it makes money by finding loopholes in regulations, and regulators will always lose the cat and mouse game of closing these loopholes.
Neoliberals end up creating a system that's actually a lot like the USSR (if the famous "Well intentioned Commissaire" essay is representative of the USSR) - heavy regulations, with corporate entities outsmarting the regulators to enrich their owners (or managers) while minimising the value they create. Neoliberals deny the need for pubic management, but are forced to badly reinvent it (via heavy regulation). Communists deny the need for incentives, and are forced to badly reinvent it (once again via regulation), ending up not a million miles away from where neoliberals end up - with endless regulation and lost efficiency.
It's worth noting that the US spends far more tax dollars (per capita) than Australia on health (Australia has a hybrid public / private model). Medicare, Medicaid and the VA costs about as much as Canada's expensive public system (per capita) since the US is so insanely inefficient.
I'm sorry, but this is bullshit. The American system is nothing like the Soviet one. I've seen both first hand. Both are kinda crappy but in very different ways. If I had to choose one though it'd be Soviet for sure because it's still guaranteed healthcare no matter what your financial situation is.
So you deny that both the US healthcare system and USSR economy are / were bogged down in red tape and regulation, which is clearly my main point? Or you're just mad that I'm using Communism as a punchline when criticising neoliberalism?
Yes. The Soviet system did not require me to jump multiple hoops to get healthcare. Either it was covered or it wasn't, and if it was then there was surprisingly little bureaucracy for the end user.
I'm not a fan of Soviet communism in general, and that's putting it mildly. I'm not a huge fan of its healthcare system either because while it was truly universal, it deprioritized patient comfort - so e.g. many things would be done without anesthesia or with only the very basic stuff that wasn't particularly effective. Dental, in particular, was a nightmare.
Nevertheless, your points are so wildly off that they deserve pushback.
The biggest problem with the American system is that it's just illegal for me to sell you good, simple insurance.
Let's say I draft an insurance contract that says for any treatment if >5 of 10 randomly selected doctors agree that the procedure was warranted, then I have to pay out the cost of the procedure, no questions asked. This contract is less hassle, clear, and doesn't require arguing with an insurance company since it specifies how disputes are resolved.
But I'm not going to give it to you for free. I need to know the expected payout in order to come up with a price and sell it to you. You know, like how all other insurance works. There is a price that is positive EV for me, but better aligns with your risk tolerance, and is therefore positive utility for you as well. In America, pricing it is illegal. I cannot, by my own methods, determine a fair price and sell it to you.
That's why we can't have nice things, because it's illegal for two people to agree on a price and terms and create a good deal for themselves.
There's plenty of upcoding going on with doctors as well though.
I go to a particular doctor and I'll see a bunch of random things on the bill that don't seem to have anything to do with my visit. Like a thousand dollars worth.
But then insurance rejects them, but I still don't have to pay a cent -- the doctor never actually charges me.
It seems quite clear they're just trying to throw things at the wall and see what sticks.
Are clinicians any more competent than in other countries with similar levels of training? In Europe, UK, or here in Australia for example, the quality of public care seems to be competitive with the US, and the quality of private care here seems often even better.
I've heard this "US healthcare is expensive but at least it's good" thing a few times, but never with any particular evidence, and from the few numbers I remember seeing, healthcare outcomes are generally no better.
Much of this will be because most Americans struggle for access to healthcare. That's the bigger issue of course, but here we're specifically focusing on those who do have access, and even with access, American healthcare isn't necessarily better than its peers.
Perhaps that was all that was intended by it, if that's the case I guess I don't have a problem with it, the US does have competent clinicians.
But my interpretation was a rebuttal to the cost, linking it and suggesting that paying so much gets you better healthcare, something I have heard from defenders of the US healthcare system in the past. As far as I understand it this link is not causal.
In Britain you generally get the exact same Consultants working in the public and private sectors. Private hospitals have shorter wait times so on that measure, paying gets a better service. Comparing outcomes is complicated since the private sector only sees patients with more wealth
This doesn't surprise me: The "fee for service" system encourages doctors to perform as many services as they can so they can bill for more. I've certainly had my fair share of tests and procedures where I wonder if the provider was just trying to find something to bill for.
I'm also not surprised that some providers will try to figure out which codes they can use to get the most revenue. ("Hey, if I do procedure A instead of B, I get paid more, so why would I do B?")
That being said, I also wouldn't be surprised if many of these turn into lawsuits, or ultimately push to revise the whole "fee for service" system.
The counter to this is that now when you go to urgent care, they're only allowed to do one thing and send you to the ER for any other concurrent problems where you pay 10x more because it's an "emergency"
"Figure out which codes they can use to get the most revenue" is a billion dollar industry with many players, subspecialties and surprisingly few lawsuits.
A lack of lawsuits can just be an off the record agreement that no one benefits from the entire mess being dragged in front of the courts with public record laws, because that is how you give future Luigis ideas.
The more shady the industry, the more everyone involved is shying awaa from sunlight.
I've seen a lot of upcoding on my bills and it really aggravates me. It's fraud and the doctors should be happy that the insurance company is just reducing their payments instead of dropping them or trying to get them prosecuted. When someone loads their grocery bag full of cosmetics and razor blades, they get on the news and YouTube, but when a doctor systematically bills for services he didn't perform to the tune of millions of dollars, almost nothing happens.
They're talking about shoplifting. Specifically hiding high dollar items in with their groceries, a practice akin to just adding a little bit extra to a medical bill for services not performed.
I’ve lived under several different healthcare systems around the world as an adult. Coming from my time America, nothing felt more like freedom to me than walking out of a hospital in London, with a new child, and having had no interaction with a billing desk.
On the other hand, aren’t comments like yours about the aesthetic experience of billing exactly the problem? It’s not like you didn’t pay for healthcare in Europe, you just had good vibes about the particular way that you paid. Employer sponsored health insurance plans are popular and also give good vibes.
> Employer sponsored health insurance plans are popular and also give good vibes.
This sounds so crazy to me that I feel like something got miscommunicated.
Who has good vibes about their health insurance? In America?
It's not the "aesthetic experience". It's about paying fairly and progressively in a predictable way via taxation, vs. completely unpredictable billing in the US. Is it in network? Is it pre-authorized? Did your doctor code it correctly? Is it below your deductible? Is there a copayment? What mystery charges will there be? What will insurance refuse to cover, wrongly? How many rounds of appeals will you have to go, over how many months? Not so good vibes.
I've heard enough "can't afford the risk of changing jobs" and "current work sucks, but I have to have insurance for my current issues". Honestly it doesn't feel like good vibes, especially with the recent issues on the job market.
Who have you talked to that enjoyed dealing with their insurance provider? Every single provider I’ve had had nightmarishly complicated customer support who couldn’t be trusted to give you accurate information.
Being in Switzerland. I don't mind talking to mine. So far they paid for everything I needed, they are a big company easy to deal with fast in communication which I barely need as doctors usually deal with them their self.
Imagine: I just pick a doctor, make an appointment whenever I need help for anything. They then do everything else and I just pay my monthly fee, that is basically the same for anyone. Zero hassle.
If anyone wondering why it is call 'downcoding', it's because there's WHO ICD coding standard or international classification of diseases now at version 11 or ICD-11 [1]. It's mainly used for classification of disease mortality not morbidity, not until the latest version iteration of ICD-11 in which it now caters for both [2].
Due the usefulness of the diseases classification coding based on ICD, it's also being used in many part of the world especially in US for healthcare insurance claim purposes.
[1] International Classification of Diseases 11th Revision:
The global standard for diagnostic health information:
No, that's completely wrong. Downcoding has nothing to do with ICD versions. This article is talking about changes to the billed HCPCS (including CPT) codes to ones with lower rates. Most US healthcare claims do include at least one ICD-10-CM code to indicate the diagnosis but this is just supporting information. Payers don't change diagnosis codes. ICD-11 isn't used on US claims at all, although it might be adopted in a few years.
My pediatrician always charges us for an office visit + preventative care when we go in for a preventative care visit. It's obviously to get more $$ from insurance. I feel like this goes both ways...
Yeah enough gets talked about insurers acting in bad faith, but let’s not forget hospitals also acting in bad faith for their end. Some personal examples:
1. Sitting in a Urgent care. They get you in the exam room. You sit there for 15 mins, doctor comes and sees you for 5 mins (mostly rushes the exam), do a blood draw, ask me to sit around while they run the test, doctor leaves, as soon as 45 mins are over the nurse comes over to let me know it’s taking longer to run the test so I can go home and they’ll call when the results are out. A month later charge thousands of dollars to insurance for a 45 min Urgent Care visit that doesn’t cover the lab work.
2. Go to PCP with cold symptoms that haven’t cleared in 10 days. I insist it’s a sinus infection, they send me back with no antibiotics and ask to schedule and online appointment in 2 days. I insist I come in in person, but they schedule an online appointment anyway. Nothing gets better and I see the doctor online after 2 days, they say I’ll have to come in so that they can evaluate me in person and prescribe antibiotics. I go in person, get antibiotics and get cured. Insurance gets charged for 3 separate hour long visits ($750 each and none of them lasted more than 10 mins).
Or it was viral after all and you cleared it on your own.
Doctors who specialize in this have a hard time accurately distinguishing bacterial infections from viral. There’s no reason to trust your own opinion on the matter. It’s too easy to fool yourself.
If doctors prescribed antibiotics to every person who came in insisting they have a bacterial infection, we’d all be in for a bad time.
> Go to PCP with cold symptoms that haven’t cleared in 10 days
It was a bacterial infection. That was the correct diagnosis. Flu (viral) doesn’t get progressively worse after 10 days and then get better immediately after a couple doses of antibiotics. My symptoms were in line with a sinus infection (I’ve had them before just like I’ve had flu before) and even if they are not able to diagnose correctly after 10 days, there are other tests that can be prescribed that weren’t and there was absolutely no reason to schedule an online appointment when they clearly knew that they’d need an in person check anyway.
There are viruses that can last 2 weeks and mimic bacterial infections.
Most cases of bacterial infection will also clear on their own after 2 weeks.
There are no good noninvasive diagnostic tests to distinguish bacterial sinusitis from viral because is the presence of normal
nasal flora.
The standard of care is to consider antibiotic treatment after 2 weeks of symptoms for adults and 3 weeks for children.
There’s a reason for these standards:
As of a few years ago physicians were prescribing antibiotics for 80% of cases of sinusitis. Despite the fact that only about 1%-2% of cases actually needed it.
20% of antibiotic prescriptions in the US are for sinus infections.
This is a massive contributor to antibiotic overprescription, which is why the current criteria is 2 weeks of symptoms.
I don’t know what happened in your online visit, but scheduling an online visit and then if your symptoms persisted past 2 weeks prescribing antibiotics during the the online visit would have been entirely appropriate.
I also confirmed with a MD friend of mine, 10 days or more of worsening symptoms could be indicative of bacterial sinusitis. For adults you can begin the treatment on that diagnosis. You can also start antibiotic treatments before 10 days in certain conditions but it is generally not recommended. Just because a patient shows up on 11th day with worsening symptoms doesn’t mean you have to wait 2 weeks.
Sure. It’s a guideline not a hard rule. Doctors have wide latitude. A doctor could give you antibiotics whenever they want.
The doctor didn’t do anything wrong by asking you to wait a few days.
In addition to residency, my wife is fellowship trained, she’s who PCPs end up sending patients to. She’s basically level 2 tech support (an ENT would be level 3 for this particular problem). She sees the results of this stuff all the time.
And the majority of PCPs vastly overprescribe antibiotics for sinus infections. The vast majority of patients who come in saying they have a sinus infection and asking for antibiotics are wrong.
Doctors are tasked with antibiotic stewardship, but people complain on review sites when they don’t get what they want, so many of them just do it.
An obligation to pay is always good for the billing side. Think about the sociopathic prices of US pharmaceuticals.
Afaik any other country with mandatory health care also puts a ceiling on prices. In germany, there is a price catalog for any service, with only few exceptions, and doctors/hospitals cannot legally charge anything else for these covered services. Now guess what the US does not have, even thought obama had foreign consultants explicitly advising for it.
Health ensureance companies are certainly not the most altruistic but any profit oriented company trying to cut cost where ever possible is hardly a supprise.
> In germany, there is a price catalog for any service, with only few exceptions, and doctors/hospitals cannot legally charge anything else for these covered services. Now guess what the US does not have
Well, we sort of do: we have Medicare's reimbursement rates, which are indeed a price catalog for every service... but only if you're covered by Medicare, of course.
I've heard that price negotiations between private payers and providers are often done with reference to the Medicare rate: "I'll pay you 20% over Medicare for this."
I wonder what would happen if we moved the "medically necessary" requirement burden of proof from the doctor/patient to the insurer. So the insurer would be required to pay out a claim regardless of whether the insurer thought it was medically necessary, but their recourse could be to try to claw it back post-payment.
They'd most likely go bankrupt. There is already an incentive for them to spend on medical care due to the Medical Loss Ratio (MLR) which caps their profits on collected premiums.
If you're saying they need to be forced to pay whatever invoice comes to them and start legal battles for each suspect case then yeah... that doesn't seem feasible.
Doctors/patients are human too and your proposed system would be ripe for abuse. If you're well versed in submitting claims, and you know they have to pay out, then you could inundate them with fraudulent ones.
> That to me would imply that doctors/patients are submitting a huge amount of incorrect claims
UnitedHealthcare says that 10% of claims go through additional review for various reasons[0].
I don't know if there are stats for the industry as a whole, but my guess is that they deal with a lot of errors.
I'm not proposing that all guardrail responsibilities be shifted to the insurer. Just the "medically necessary" provision.
Doctors would still have a Duty to Code Services Accurately and a Duty to Maintain the Medical Record (which would clearly enable an insurer to prove a non-medically necessary therapies). There would be plenty plenty of evidence for an insurer to immediately respond.
So claims could be rejected on the basis of failing to code accurately or lack of record.
What would happen is that costs to self-funded employers would increase so much that many of them would simply stop offering health insurance benefits and choose to pay the tax penalty instead. The only way the current system sort of works is with health plans maintaining strict utilization management.
(In general society would be better off if access to healthcare wasn't tied to employment but that's a separate issue.)
If someone invoices me, and I don’t pay the full amount in a timely manner, what do you think will happen? Late fees, reports to credit bureaus, collections agencies hounding me, maybe even lawsuits?
If insurance companies underpay, doctors should treat that no differently. Don’t appeal through the insurance company itself. Imagine I go to a store and pay less than the full amount at the register, and then the grocery store appeals to ME to decide whether I actually should have paid the correct amount. It’s absurd.
Doctors should treat the insurance companies like anyone else who owes them money and isn’t paying in full on time.
> Recovery is beyond the scope of most small practices.
Seems like a business opportunity. Could probably work very similar to other collections agencies where they either buy the debt for pennies on the dollar or take a percentage of the collected amount.
Yeah, there's an industry of companies that insert themselves between the medical record and the insurance company to upcode claims and get better payments. This article is about the reverse process, where the insurance company looks at the claims and downcodes them to send worse payments.
IMHO, in office care should be more of a time and materials billing than billing based on procedures done. Of course, then the doctors' billing office would aggressively measure time the doctor spent, and the insurance company would suggest the doctor took too long for whatever.
It's much easier to treat it like identity theft where the business's problem becomes the customer's problem to solve. In this case, insurance didn't pay what was required so the patient does. There's already a potential collections agency involved if the patient doesn't pay.
Who do you think is easier to squeeze the money from? A mega-insurance corporation or your sick grandma?
Sending your patient's 'debt' to collections promptly is very unpopular with the patients, and the insurance companies will 100% insist that the patient is responsible.
You'll notice the doctor's office in the article already has a team of billing experts. But instead of working on new claims, they are being forced to relitigate claims they already submitted that weren't accepted.
Insurance companies hold tremendous leverage over care providers, up to and including the power to effectively put them out of business on a whim. Care providers don't like picking fights with insurance companies.
You can look up Dr. Elizabeth Potter on Youtube who publicly details what its like dealing with insurance, and all the ways insurance screws her and her patients. United Health actively threatened and retaliated against her business when she started getting publicity.
The total industry wide profit numbers aren't relevant at all if you're running a small clinic going up against an insurance provider. Heck even if a single clinic made more money than an insurance provider, it would barely matter - the insurance providers have the power to stop covering your practice and kill it, a clinic does not have any such power over insurance providers.
And yet this has absolutely nothing to do with the claim that "Insurance companies hold tremendous leverage over care providers, up to and including the power to effectively put them out of business on a whim.", you're not even engaging with the argument at all.
It doesn't? All the money is going to them, and they're massively larger than the insurers, but it's the insurers with all the leverage? Why isn't more of the money going to the insurers then?
Do you make this argument in any other scenario? I'm sure all merchants who accept credit cards combined make WAY more than Visa/MC, but I think most would agree Visa has much more leverage over a corner shop that accepts Visa than the other way around.
There are 5 or 6 big insurance companies, maybe 2000 if we count all of the small ones and 400K medical practices. So even by this very simple money=leverage argument, each individual practice has far less money than the insurance company they are dealing with. So if more money = more leverage then these same numbers prove the opposite claim.
So its probably fair to say that the picture isn't as simple as money=leverage.
If a medical practice and an insurance company get into a dispute and one of them decides to not work together, the practice loses say 1/5th-1/10th of its customers, the insurance company loses 1/100000th of its revenue. I call that leverage.
Care providers also likely spend much more time and labor on making that money than the insurance providers spend making their end, though I only have anecdotal evidence of this through my involvement in healthcare providers’ practices as an MSP.
It depends on the size of the provider organization. In some areas there has been a lot of provider consolidation driven by the need to gain more negotiating power with commercial payers. So we end up with only a few large integrated delivery systems dominating certain regional markets.
Doctors have extensive contracts with insurance companies, and often have employees dedicated to billing. I wouldn't make assumptions here, other than "downcoding" is probably just subtle enough to not be worth it to fight.
I'm 90% certain that submitting claims to an insurer subjects doctors to resolving any disputes via an appeal followed by an arbitration process, and that the right to sue or handle the debt in the regular way is severely attenuated.
So what should happen when Docs lie about what procedures they did? Because it happens quite frequently and for some reason is always left out of these discussions.
I live in NL. I pay 130 euros a month for my health insurance, and a max of 375 yearly on deductibles should I accrue some costs. The only reason I pay 130 is because I earn above a certain number, otherwise it's discounted and even free at a certain level (and I opted into the more expensive tier to also have dental coverage). In my case, my employer even pays for my insurance so in reality I don't even pay anything monthly (that's rare here though).
I recently did an in-depth sleep study, got a CPAP machine prescribed to me, free replacement filters and replacement tubes + mask for it whenever I need them. I also got xrays and CT scans because of a foot injury around the same time. I also got comprehensive blood tests done.
None of it cost me a penny other than the ~100 euros a month, the doctors and GPs are paid well, the quality of care I received was exceptional, and in the worst case scenario possible I would've only paid 375 euros max.
My mother in law has osteoporosis and a number of other chronic illnesses, so she has to see specialists quite often. The quality of care she receives is similarly excellent to the one I received, and due to her disability her healthcare is partially covered as well.
It's not perfect of course, but it sure does beat all the horror stories you often hear coming from across the pond of people ending up in lifelong medical debt should, God forbid, something happen to them that they realistically have no control over. So I'm sorry, but I don't buy that the for-profit fucked up system you guys have going on over there is the best of the lot, especially if you're an average Joe and not someone from SV earning obscene amounts.
"Healthcare that isn't for profit" doesn't mean just a national health insurance. Just that as a random citizen you are shielded from seeing all the same issues underneath. The pharma companies, test providers, equipment makers and personnel are all making profits. I bet the total amount paid is higher that 130 euros a month. There's profit all through the system, so claims that healthcare should not be for profit are silly.
Now, what happens is that the profits have to be kept in check, either via price controls or sufficient competition. It's not hard to argue that the choices made in the US are quite suboptimal, but it's far more of a regulatory problem than purely a matter of people making money. If nobody makes money, there's no healthcare.
Not to mention EU pharma makes 50-70% [1] of their money from the US, an unregulated market. I'd challenge them to shut down that 800USD/shot revenue stream and still give subsidised insulin locally and remain profitable. Hint: they can't. Their shareholders would shut them down in a week. Good luck manufacturing the next new drug then.
Profit is what's left after everyone is paid for their work. No profit doesn't mean nobody gets paid - it means nobody's trying to simultaneously maximize revenue and minimize costs just so they can pay themselves the difference.
Speaking of tax-funded healthcare, did you know that US residents pay more tax towards healthcare than residents of any other country? And in return for that, they don't get any healthcare so they have to pay a second time to buy their healthcare.
> so far all of the other ones have failed horrifically.
Uh, what? Other systems have their problems, but they're varying levels of functional, and the health and life expectancy of the populations in most other developed countries is higher than the US, all the while spending a fraction.
Most other developed countries have a mix of public and private insurance and/or delivery, with the better run systems being better rationalized in dealing with costs and having an actual market where it makes sense to form one (eg you can't practically shop around for ER care, but you can for elective or planable services). The French system is held in high regards in particular (though it isn't really replicatable due to their unique civil service setup).
how about copying the exact thing that works in literally almost every other country in the world
What do you mean failed horrifically? Yes, some countries have long queues. That's because there are actually people getting served. That's just the latency/throughput tradeoff being tilted farther towards throughput - which is what you want, and it's not like people who come in with heart attacks don't get to skip the queue. In America, people get heart attacks and just choose to die so their family won't get bankrupted by an ambulance ride.
Are you possibly getting this information (that healthcare is a horrific failure in every other country) from propaganda sources, instead of information sources?
I have no problem with it being for profit. The issue is the alignment of interests and the thumb on the scales by government and vested interests. If health insurance worked like car insurance I think we'd be in a better state.
Vets are really the most amazing doctors and I hate to see what is happening to their industry. Hopefully in exchange for dealing with the bullshit of human health care, at least maybe the money is getting a little better for them (a lot of them are just criminally underpaid).
Most people do not profit off their labor. 2/3rds of people are living paycheck to paycheck, which means that they are being paid approximately the same amount that their labor costs to produce. That makes their wages an exchange of equal value, and thus not profitable.
> which means that they are being paid approximately the same amount that their labor costs to produce
No, "living paycheck to paycheck" means you're spending everything you get each month. There can be all sorts of reasons for that.
> That makes their wages an exchange of equal value, and thus not profitable.
This is true for all profit. If you lend me money and profit off the interest, we've decided between us that the time value of that money is worth that interest, and so it's an exchange of equal value.
A reasonable wage or salary isn’t usually considered “profit” in a legal sense. This is why nonprofits can still pay employees. Any money that is left over after costs (including wages/salaries) needs to be reinvested, spent on the organizational mission, or held for future use, not distributed through dividends or other distributions as in a for-profit enterprise.
Have you spent much time looking inside non profits? A lot of hospitals in the US are non profits. Some are part of non profit universities too. This in no way leads to superior cost controls, or those universities being cheap. What it does mean is that they get some significant tax advantages (for instance, no property taxes), and that there's fewer optimization incentives. When you limit yourself to the US definition of a non profit company, it doesn't make care better or cheaper.
The IRS has some guidelines that they use to decide what is “reasonable” but they don’t give out whatever actual formula or process they use to determine this. It’s supposed to be based on industry averages (more or less) but in reality it’s hard to determine what exactly that means. Generally you are “safe” paying in an industry average range, but if outside that range you need legal and accounting support to back up your own assessment.
> you are “safe” paying in an industry average range, but if outside that range you need legal and accounting support to back up your own assessment
What? The IRS doesn’t regulate wages. They just care about getting their money. If I pay you $10bn a year to yell at my cat, the IRS is fine so long as I pay payroll and you income taxes.
Similarly as an S Corp (maybe other corp types too) then officers must take at or above a reasonable wage/salary to limit the tax advantage: https://www.irs.gov/pub/irs-news/fs-08-25.pdf
This is intended to prevent people from, for instance, setting up a “nonprofit” where they just funnel all gains into their pocket while gaining all the other tax benefits of being a nonprofit. You can’t overpay people, you can’t engage in transactions where you intentionally overpay a supplier for materials/services and then they compensate you for the extra amount, etc.
I'm not saying profit in that sense. I'm just saying that it's monetary profit all the way down when it comes to paid work. People work for profit. People invest for profit. People bet for profit.
The person you were replying to seemed to be discussing profit in the sense of tax law, not whether or not people should be paid at all. I don’t think anyone here is saying that doctors should not be paid.
I was thinking the same thing. Would it be permissible to bring each underpayment to small claims court as a separate case? If enough doctors did this, it would very quickly be a legal DDoS attack, like we've seen happen with mandatory arbitration.
Most insurances won't publish their fee schedules. So doctors don't know what they will pay. So what they do is bill insanely high knowing the insurance will come back with "Nah, we only cover $X". They'll collect $X, then write off the remainder. Because the fear is not getting the maximum money possible. If the doctor would bill $100 and the insurance pays up to $200, then the doctor "lost" $100.
Regardless of how much it actually cost the doctor to provide the service.
It's also why the "cash price" is usually much cheaper, because it's closer to what it costs the doctor to provide the service.
Ah, but this has also lead to many private practices getting bought by hospital groups, at which point they have superior pricing power. The doctor makes more money, and the insurance company pays more, as it's harder to strongarm a company that owns 8 hospitals than a 3 doctor practice. Either way, the price goes up.
Health plans are legally required to publish their rates and they all comply with this now. You can literally just go to any payer web site and download the MRF. There are occasional data errors but overall the numbers are generally accurate.
Sure but imagine you hire a landscaper and they send you a $40 invoice for $20 of law cutting and $20 of leaf cleanup. You go look outside and see a ton of leafs so you just send them $20.
That's the insurance companies' stance. The work you performed is this and so our agreed upon rate is this.
But in reality, the landscaper bills you for $100, you say you’re only going to pay $90, and then you write them a check for $31.50.
(That’s because you’re a major, well-known insurer and pay an industry high 35%. The guy who mows the Medicare yard might pay 40 cents on the dollar. The person mowing the Medicaid yard has to file 87 forms to get paid his $6.)
but the landscaper has a photo of the clean yard after they finished. They send it to you but you ( as the insurance company) say they need to call a specific time and speak to your 12y/o who is the yard representative of the house.
The 12 y/o say ‘no you stink’ and hangs up. Then you send the landscaper a letter saying ‘sorry your peer to peer was denied’
( I know this is exaggerating a bit and made to sound funny but it mostly works like that in healthcare )
It's pretty obvious to everyone that doctors have been abusing these levels. See doc for 20 minutes for a low complexity item but get charged for a 30 minute medium complexity. The insurance companies aren't blind. They've got the stats in hand for each doctor. I mean some of the ranking data is already built into the portal tools they give consumers for finding a doc.
It's a huge system with a lot of people involved so no doubt there is abuse, but there is also natural and expected levels of variation in the complexity of patients that doctors doing notionally the same job will actually encounter. If you're doing an honest job and happened to have seen more complex patients than average I think you'd rightly be pretty angry if you were then forced to do more paperwork to justify yourself to an insurance company who starts downcoding your patients.
the health insurance industry needs to be razed to the ground and rebuilt from scratch. there's no saving something that is ostensibly designed to help people get healthcare but realistically denies them what they're entitled to for years (in some cases, they just try to keep the ball in the air until the patient dies, then there's no one to appeal) and then once the care is approved steals from the service provider by automatically altering the bills without any evidence of fraud or theft.
I went to the dentist a couple of weeks ago and had the shortest dental visit I've had. They did the X-rays, then the dental assistant spent five minutes cleaning my teeth and pronounced them good. The dentist came in and looked for about one minute and said they were fine. I was sent on my way.
They billed my insurance for over a thousand dollars.
Indeed. Part of the problem is news vendors will only tell one side of the story. If that dentist only billed, say, $150 ($40 per x-ray including time, wear, consumables), $20 for teeth cleaning time, $50 for rent, property rates, taxes, profit) then you'd pay far less in insurance. They all bill more because they can.
I'm on the side of the insurance companies. they are likely the only "responsible adults" keeping providers in check. Providers are extremely wasteful and "creative" with their billing. Staff are generally idle, and staff-to-patient ratios are 10-20:1 if not more. There is little urgency around the clinic, staff take off at 4pm and are impossible to catch on a Friday. Every procedure bills a redundant and pointless "consult"-- a $1500 meeting that could have been an email.
Providers benefit from possibly the best PR of any industry. Insurance companies are the "Ticketmaster" of the healthcare industry. Their entire objective is to be the punching bag for wasteful healthcare providers.
while you're right most of the billing pressure is likely coming from administrators and boards, doctors do participate with petty / pointless consults , excessive testing & procedures, absurd hour restrictions, and indirectly through medical boards reducing capacity, among other factors
>indirectly through medical boards reducing capacity
My wife has served on government medical advisory boards, and handles resident education. I've heard plenty of virtual meetings in the background. I've never once heard anyone discussing adding requirements for any unnecessary reason whatsoever. Not even a hint anything that would reduce capacity. If anything it's "how can we add capacity without reducing quality?"
>absurd hour restrictions
What do you mean by hour restrictions? The only hour restrictions that are enforced are on Residents and that is 80 hours per week.
If you're talking about doctors choosing to work less than 40 hours per week, that's general because they'll completely burn out. My wife is a pediatric ER doctor, she works less than 40 hours per week, but she has no set schedule and could be working 7a-4p one day, 1p-11p the next, and 10p-7a the next. For many of those shifts she's the only doctor there, and is responsible for the life and death of every single patient that walks through the door. She's the one who gets to tell a young mom that her 3 year old has a brain tumor, she's the one who has to code an already dead 5 year old found face down in a pool victim for an extra 15 minutes so her parents can get there because studies have shown it helps them process grief if they can see people doing everything they can to save their kid. And to top it off any mistake she makes could literally cost us our house because it's relatively common in our state for people to awarded judgements that are larger than malpractice insurance limits.
If she worked 40 hours a week she'd be completely burned out in 6 months.
>excessive testing & procedures
You can 100% blame fear of litigation for that. My wife is constantly balancing her desire to save patient's parent's money with her desire to get answers and her fear of legal liability.
>petty / pointless consults
You can blame fear of litigation for that one too. Calling in a specialist for a consult works the same as testing. It's a balancing act.
I know a lot of doctors, some of them are assholes, but I don't know a single one who even consider changing their treatment recommendations based on how much money it nets them.
I'm sure there is a noble excuse for every one of these problems. But the providers have the most leverage in reducing costs, so they must also accept the blame.
My complaint is two parts really. Providers are wasteful, and policy makers are not able to pressure them to optimize, because of the incredible PR.
In other words, there's no hope to reverse healthcare insolvency because cost growth will continue to explode with this combination.
I mean aside from the fact that insurance in healthcare don’t provide any value at all, and healthcare providers provide, you know, actual healthcare, then sure.
Healthcare insurance companies are completely pointless because healthcare is a human right. All other developed countries have figured this out and provide healthcare universally. We could fully socialize “healthcare insurance companies” and have exactly zero negative repercussions. The only outcome would be eliminating a useless industry and saving ~$500 billion a year.
IT is beyond our control because we have setup a system where the people who are paying don't want to control things.
My boss wants insurance to be expensive - if I could afford it I would be more willing to quit (retire early).
Finding cheaper services isn't in my interest - I'm not paying any bills anyway.
Insurance companies like the complexity because it means I can't understand the system and so I have to use them.
Doctors don't really care as they just have administrators play the game for them. Once in a while they look at the game and say something, but really this is just they don't understand how the game is played (they shouldn't - they are doctors, they should be looking at medical issues not administrative ones).
Doctors have also spent a lot of time lobbying to make becoming a doctor harder so that the fewer doctors will be able to command better salaries. It sounds like they are attempting to reverse that and open up more spots for residencies but I imagine that there is a lot of momentum to overcome.
There's an old mechanics saying "if X was covered by insurance it'd cost what Y does" where X is some routine thing (tires/brakes/etc) and Y is autobody or glass services typically covered by insurance.
This proverb seems to also apply to health insurance and the things they do/don't cover.
Putting routine stuff under the purview of insurance is stupid regardless of context. There are other cheaper, faster, simpler and more transparent ways of doing that.
Other countries are making efforts to keep things in check though https://www.npr.org/2025/01/04/nx-s1-5246231/potential-fraud.... The US for some reason can’t even address blatant fraud. One example is the stuff insurers do with Medicare Advantage. There is fraud and Congress knows about it but besides some hearings nothing is happening.
And having lived 10 years in Canada and 10 years in the US and used both their healthcare systems quite a bit, I have seen both sides. Let me just say I moved to the US for healthcare 10 years ago and we do not regret it one bit. The US is easy to point and laugh at, but that just comes from ignorance.
It's a system that supports two set of clients, doctors and patients, and fails them both. Yet, Congress has considered it sacred and infallible for a hundred years. Democrat's most earnest attempt ended up strengthening and expanding that system, and Republicans for their part have fought tooth and nail to stack the system even further against the people it's supposed to serve.
Congress has considered that the employees of this industry are wealthy enough to contribute generously and often to their "re-election campaigns." They couldn't care less if your medical bills bankrupt you or not.
This would all be well and good if the doctors weren't also profiteering. When you visit one, you still don't know if their recommendations are good for me or for them. I have seen allergists which are no less slimy than used car salesmen. See also studies on dentists and their varied recommendations for the same patient.
The US insurance system doesn't seem to be giving us low prices, but let's not pretend it's all their fault. It's just a complex market where it's hard to compare providers, and therefore is prone to a lot of inefficiency.
I'd argue the problem is that doctors and insurance companies are two for-profit entities fighting it out for every penny, whereas the people who ultimately pay for the services aren't part of that conversation. If making me an afterthought makes you (the doctor) more money, I become an afterthought (assuming I don't have other options, which most people don't). I can't imagine it working any other way, aside from magical altruism.
The dental industry gets no defense from me as I've been subject to attempts at swindling and coercion more times than I can remember, as if it's standard practice.
The real problem is the billing model we have, where every individual act a clinician performs is separately billable... and separately haggle-able.
One model that has shown promise is "bundled payments." For example, imagine that a certain insurance company switches to a bundled model for childbirth. They say, "we will pay a hospital $X to cover everything related to this patient's childbirth. Maybe it will be a very simple birth and the hospital will make a lot of money on it. Maybe it will be more complex/expensive, and the hospital will make less money. In some rare cases, the hospital will actually lose money."
Why is this a better model? Well, 2 reasons:
1. the hospital has an incentive to provide care efficiently, rather than trying to churn out as many procedures as possible so they can bill more
2. there's just fewer numbers for providers and payers to haggle over
> I’m surprised there isn’t a Costco like medical group that’s nationwide, has a membership, and works solely to provide care efficiently.
What you are describing is an HMO, which hasn't had that much lower costs historically. Theoretically, you pay once and then they take care of you, but in practice costs haven't been that much lower.
Where I live, we have three major hospital chains. Imagine one of them is Kaiser Permanente. My primary care is through Kaiser. When I needed to see a podiatrist to get a toenail removed, they were through Kaiser. When I went to an ER a few years ago for some abdominal pain, it was a Kaiser ER.
It is beyond me why my employer is paying an insurance company anything at this point. Kaiser should be selling me an annual plan where everything at Kaiser is covered, maybe up to a point, and then they have insurance-like network relationships with e.g. other ERs in the area, if you need them, plus out-of-area addons for when I'm traveling.
This is, fundamentally, in Kaiser's interest to sell (again, I don't live near Kaiser Permanente, I'm just using them as an example; every population center has networks of healthcare providers like this). They hate dealing with insurance as much as their patients do. But only recently have these healthcare mega-conglomerates achieved so much monopolistic integration that they could actually do this and people would be interested.
Also, interestingly: My dentist does not accept insurance; direct pay. My eye doctor also does not accept insurance. This is also a new thing; it wasn't long ago that I recall them actually asking for it, but nowadays they just bill directly. It hasn't gotten more expensive (beyond the fact that my employer is paying for useless dental and vision insurance, but at least those are only like $1-$4/paycheck).
Idk, my point is, I think things are changing and will continue to change faster than you might think. I'd love to see government-ran single-payer, but even admitting that is very unlikely to happen on the near term, there's just so much excess, waste, and bureaucracy in the medical system that some kind of short-circuiting direct-to-consumer play, by someone, will happen. Once a major healthcare provider chain can prove that this D2C model works (and it would work), the dominoes will fall.
> It is beyond me why my employer is paying an insurance company anything at this point. Kaiser should be selling me an annual plan where everything at Kaiser is covered, maybe up to a point, and then they have insurance-like network relationships with e.g. other ERs in the area, if you need them, plus out-of-area addons for when I'm traveling.
Well, then you are beholden to Kaiser. Kaiser will not pay for any treatment or medication for weight loss other than gastric bypass surgery. Kaiser will not pay for many medications for mental health, especially for adolescents. Will not pay for medications that could be used for ED, even if not being prescribed for that.
And the most annoying, recently: My partner got a couple of root canals, and was in significant pain and discomfort as you'd expect. Dentist sent her prescriptions for antibiotics and pain management to Kaiser, and we go after her surgery to pick them up at the Kaiser UC/ER hybrid.
No pain meds for you. "We will only fill that through mail order - you'll get it in 5-7 business days". Very helpful for that post-surgical pain now. The irony being that they absolutely had those drugs in stock and available, they were just only for their UC/ER inpatients.
> Kaiser should be selling me an annual plan where everything at Kaiser is covered, maybe up to a point, and then they have insurance-like network relationships with e.g. other ERs in the area, if you need them, plus out-of-area addons for when I'm traveling.
If you’re trying to solve them problem, why on earth do you propose such an expensive, convoluted and strange solution?
Two dozen countTies have solved this. It works very, very well. People pay less and get better outcomes. What more do you want?
What I want is simple: For change to actually happen. You don't need to convince me; your choice is either to convince 100M+ unreasonable people, or make a reasonable path. Direct to consumer billing is that reasonable path; that's why we're seeing it take hold in the dental, vision, and pharmaceutical industries. Core medical is next. Specialty medical will follow. Emergent medicine might never change, but that is absolutely an area where insurance does make logical sense.
I don't understand your comment. Kaiser Permanente health plans already work that way. If you go to an out-of-network provider then they can still submit a claim to KP, although prior authorization may be required in some circumstances.
Does your dental insurance not reimburse you? My dentist is also direct pay but submits for reimbursement on my behalf. They get paid up front and I get a check a few weeks later.
For those looking for a fix to US healthcare I think it's something like this:
- (user incentive to reduce cost) insurance is structured as co-pay of [20+]% on all expenses, no exceptions
- (price transparency) require healthcare providers to quote upfront for care, via API/website/phone/in-person. Price paid by anyone is the same except for expenses related to billing. E.g
- (create competition) enable creation of small scale clinics, testing facilities, and laboratories
And for God's sake, get the government out of it!!
One (social) system that may work well is the South Korean one: private provision of healthcare services; government run insurance scheme with mandatory payments by those that can afford to pay
I love markets, but health insurance really is a tough one given the govt can't seem to let people make their own mistakes on healthcare, so I think it might make sense to make it govt run.
Edit: the thing to acknowledge here is that it probably won't push the frontier of healthcare as much as the current US system does, but at least it would be high quality and affordable (not people's largest or second largest expense item).
> One (social) system that may work well is the South Korean one: private provision of healthcare services; government run insurance scheme with mandatory payments by those that can afford to pay
Do you know if SK govt owns hospitals? Or are they all private? In Japan, it has a similar system, but lots of the larger facilities are owned by govt, or associated with a public university.
> More than half of societal work is pointless, both large parts of some jobs and five types of entirely pointless jobs:
> Flunkies, ...
> Goons, who act to harm or deceive others on behalf of their employer, or to prevent other goons from doing so, e.g., lobbyists, corporate lawyers, telemarketers, public relations specialists; <-- YOU ARE HERE
One time I got a test done because my doctor recommended it, but insurance refused to cover it. I spent hours making calls, but no one could give me a clear answer.
That’s when I started to wonder if I was actually getting medical care, or just stuck in a system no one really understands.
I can quickly see something like this turning in an AI arms race between insurance and the provider with each auto-approving/denying/disputing the other. All the while locking out smaller players because they can't afford the 3rd party disputotron.
I already have a solution to the downcoding practices of these health insurance carriers.
I recently created an application called EMpowerAI that uses AI to analyze clinical notes and assign appropriate billing codes based on medical complexity or documented time. It also can enhance the Assessment/Plan to justify higher billing codes if the note content supports it.
As a Cardiac Electrophysiologist, I optimized the application for cardiology and EP, though it is scalable to other specialties. I am looking for beta testers and would appreciate any feedback. Here is a link to the app:
You would have to leverage the law (if you have one) that involves the state resolving the dispute because otherwise the automated disputes would probably be dropped on the floor. The insurance company has the leverage because they're actually in possession of the money and the contract that gives them stupidly high discretion on how much to pay out.
Doing nothing but flipping the burden, doctors get paid whatever they invoice and insurance have to claw it back would make a lot of this stonewalling bullshit go away. But with an openly corrupt government paid by insurance it'll never happen.
I wonder how this sentence ended up with so many commas.
> The problem, doctors say, is that lower and lower reimbursements mean reliable community doctors, like Wagner, could have to make choices that are inherently bad for patients, like cramming more patient visits into a single day to make up for lost revenue, dropping patients on certain insurance plans, or selling their practices altogether.
Ah yes, this is a fight between the practices (sometimes not the doctors!) upcoding their visits and the insurance companies wanting to push back and downcode the visits to what they actually entailed.
Healthcare practices want to maximize revenue and push up the “level” of a doctors visit and they can do it with just adding one or two extra little questionnaires or an extra test or two that you might not pay attention to so they can get an extra several hundred dollars a day for billing higher level cases daily.
Because the common interaction people have with their insurers is "We are denying this because of <REASON>" which they have to fight to get healthcare.
When a provider rips off an insurer it's invisible to the general public.
Also, incidentally, when people talk about fraud in Medicare/Medicaid, the providers are almost always where that happens (yet that's often not pointed out).
> Because the common interaction people have with their insurers is "We are denying this because of <REASON>"
Of the multiple times my insurance has declined to cover one thing or another, not once have I ever gotten a reason. The claim is just billed to the patient, directly. I'm then left wondering things like "Hey, your plan documentation says 'preventative care is 100% covered'. This was preventative care. Why is it being declined?"
If I want to know, it's an hour of my time, at least, going back & forth with insurance to learn "Oh, '100% covered' … except in these cases."
FWIW I hate most medical billing departments (and hospitals are the worst) about as much as I hate insurance.
They're at least as likely to fuck something up (curiously, always in their favor, not yours) as insurers, from what I've seen. And they're almost as unpleasant to deal with—at least they don't generally keep you on hold for literal hours, but it's still not great.
And one of the ugliest public-facing roles in all of American medicine has to be the insurance-vultures whose job is to hover about emergency rooms pestering very-sick people for their billing information. Fucking gross.
In years of working in the medical industry it is rare for health systems to purposefully upcode a patient's visit (this is taken extremely seriously) while insurers attempting not to pay the bill and sticking it to the patient and health system is standard practice
Because it’s only human nature to complain about the people who aren’t in the room. Insurers are not only absent, they are economically adverse to the two parties making decisions in the room.
Every party at every point in the system is various shades of complicit in fleecing us. That's the magic of the system. It's all divided up in so many ways and so many of the feedback loops touch through the people getting screwed that it's impossible to build a "these guys might not be wholly responsible, but they're responsible enough things will get better if we push them off a cliff or legislate them into poverty or whatever" consensus you need to build to change things
17% of the US GDP is healthcare, now obviously there's a lot of nurses and random courier drivers and all sorts of other stuff in there, but they would all need to take some amount of haircut for us to get fleeced less.
The GDP contribution of slavery was ~13% just preceding the civil war and credible moves (i.e. electing Lincoln) to make them take a haircut caused, you know, the civil war.
There is likely no "clean" way to fix this problem other than a century long frog boiling exercise
You think nurses and couriers are the ones who need to take pay cuts to get healthcare expenses under control??? Lm, and I cannot stress this enough, fao.
There is immense pressure on insurance companies to lower costs, as they get blamed for the "American health care system". The only one on the side of the payer is the insurance company, they're the only one who wants to keep costs down for the consumer. Given the massive amounts of fraud in government health insurance (medicare) it would of course be prevalent in the private insurance market.
“ they're the only one who wants to keep costs down for the consumer.”
They don’t. They want to increase profits by pushing more and more cost to the patient while squeezing providers. The patient is always the loser in this system. One reason is that most patients don’t even have a choice of insurance because their employer picks the insurance that’s best for the employer.
My employer switches insurance carriers every 4 years or so because another carrier has a more competitive rate. "What's best for the employer" is also what's best for me -- I can walk across the street and get a new job if I become unhappy. They want to keep their healthcare costs down so they can keep my salary high as dollars lost to my healthcare compensation are invisible to me.
As long as providers have an incentive to overtreat and overcharge, I don't see how we can control costs without an adversarial system, as infuriating and dysfunctional as it is. I never had to deal with any of this while enrolled in a nonprofit HMO (there must be some internal adversarial dynamics there, though).
People who have always lived in the USA have no idea how many things about life in the USA are batshit crazy. This is probably the top of the list. At least before we turned to fascism...
Upcoding for services not actually performed is fraud. Providers who do this may be dropped from the health plan's network, and in extreme cases referred for criminal prosecution.
People get annoyed at insurers who will deny treatment but most of the time you can just pay it yourself. The government has decided that everyone should pay for health insurance but you'll never be denied care if you pay for it yourself.
So if you think you do require some care, just ask the medical practice whether they accept self-pay and then you can decide if it's worth paying or not. If you think it's not, it's unlikely someone else will if they have to pay on your behalf.
Essentially, place yourself in the role of each participant:
- patient: wants to maximize care, money no object since it isn't theirs
- medical practice: wants to maximize money spent on care
- insurer: wants to minimize money spent on care
Normally, the first two would be happy to collude to charge the third any amount of money since they'd both get what they want. And that is indeed what happens. So you get the natural result that the insurer doesn't want to support certain payments even if they were kind and pure-hearted. That they don't want to when they're neither should then not be a surprise.
You can remove that pressure by turning the interaction into:
- patient: wants to maximize care with minimized cost
- practice: wants to minimize care with maximized cost
The pressures between the two parties are now opposite and you can find the market equilibrium. With this opposition you'll suddenly find that patients start complaining about doctors ordering unnecessary procedures and so on, just like insurers claim in the other model.
You can also work through with the other versions to model where equilibrium will set in and see if it's where it does. Most of the time you don't need to assume any moral valence for the participants. They might as well be machines. It is their roles that determine how they act, not their personalities.
>So if you think you do require some care, just ask the medical practice whether they accept self-pay and then you can decide if it's worth paying or not. If you think it's not, it's unlikely someone else will if they have to pay on your behalf.
Ok, hear me out for a minute.
What if I wanted to pool with several people, so that if any of us had unexpected medical needs, it wouldn't bankrupt any of us. Knowing that most of us would not need it.
And then, since we're all on the hook for each other's general health, we also agreed to share the cost of preventative care, because it was literally cheaper for us to all pay for preventative care than to try to just solo it and then hit the group with the cost of terminal cancer care instead of catching it early and doing a small excision. (and other such examples.)
And then what if we made the pool HUGE, to even further spread out the costs?
Sure wish there was a system that just did that, without trying to also generate insane profits off it.
> Sure wish there was a system that just did that, without trying to also generate insane profits off it.
Health insurance companies in the US must pay 80% of premiums to providers. All their overhead (e.g. their accountants and actuaries and so on) comes out of the remaining 20%. What's left is their profit. People have this fantasy that all the money we spend on healthcare is secretly going to greedy insurance companies while doctors struggle to get by. But insurance company profits are a drop in the bucket.
The real villains are the doctors who recommend expensive MRIs and act like it's a complete surprise that the bill they give you is so high. And then go lobby the government to limit their competition. I would love to have a doctor in france look over my radiology and tell me if I have cancer. But that's illegal, I need to hire an American. Coincidentally, the average radiologist in San Francisco makes $660,000/year (about $400/hour).
It's almost as if, then, providers know they can push their rates up, and reimbursement rates go up, since all that means is that premiums go up. And by a stunning coincidence, how much that 20% is goes up.
And then they buy/create PBMs which aren't covered by those limitations, and then force their customers into using them. "Oh, you want a convenient 90 day refill? Sure. If you go through our wholly-owned mail order pharmacy. From your pharmacy? No. You can keep going there every 30 days for your meds."
Their overhead (e.g. their accountants and actuaries and so on) spend a lot of time inserting paperwork and delays in between hospitals and patients, fighting hospital invoices and fighting patient claims, doing marketing, and any profit the insurance company makes is money customers "spent on healthcare" which didn't end up being spent on anyone's healthcare.
> "Health insurance companies in the US must pay 80% of premiums to providers."
How was that figure decided upon, and why isn't it higher? Why isn't it "pay overheads and salaries, and return the rest to the customers"?
The benefits of allowing people to make money by starting businesses are a separate discussion. I only meant to say that insurance companies are already legally prohibited from making "insane profits".
But to answer your question, there are many people looking to invest their time and money into profitable enterprises. Because insurance is a good that is very beneficial for society, we want people to invest in making it a thing. Therefore, we set up a system where the people who invested in its creation get a tiny fraction of the benefit it generates. There are many areas of life where this works great, like providing food and shelter, and I guess it wasn't obvious that insurance would be an exception for some reason.
The actual minimum medical loss ratio is 85% for most large health plans. In practice most of the large payers are at a higher ratio due to competitive pressures. As to how that figure was decided upon, when Congress passed the Affordable Care Act (Obamacare) they just picked a number that seemed reasonable — it wasn't based on a quantitative economic analysis or anything like that.
Yes, you can do that. HealthPartners[0] is such a consumer-governed non-profit. It is entirely opt-in. It is not illegal in America to do that and, as you can see, others have done that.
In HealthPartners' case, they do deny claims despite having the structure you mentioned. I think if you wanted to run such a pooled insurance company that advertised that it would pay any and all claims made to it and would deny precisely zero claims, you could and you would find it very easy to onboard both patients and providers to it, at least so long as its fund was solvent.
There's nothing stopping you from starting your own non-profit health insurance company. If greedy health insurance companies are really the root of the problem, you should be able to out-compete them fairly easily.
You are correct that health insurance companies aren't the problem here. But there are a lot of things stopping you from starting your own non-profit health insurance company. Medical insurance is heavily regulated at the state and federal levels. Launching a new one takes years of work just to get through the paperwork and legal compliance issues.
That assumes the humans will do their best to take care of themselves but given the ability they will be bailed out, they let their health go knowing they don't need to actively take care of themselves.
There are two differently behaving conforming things in reality of these I think. Both Medicare and the UK/CA NHS in my knowledge conform to your description.
In Medicare, this incentivizes maximizing patients on 'recurring revenue procedures' like dialysis.
In the UK NHS (which I know better), it leads to the government denying certain kinds of care depending on the Adjusted QALYs / pound spent that the intervention will provide.
TANSTAAFL after all, but yes, perhaps the interesting thing about the government being in that model is that patients can control government in a way that they cannot control insurance companies (i.e. they're not strictly oppositional) and consequently when the insurer is the government you get spend-bias in the direction of who has government power. In the US, that turns out to be old people. Additionally, governments have non-health-related sources of revenue so a government health plan can be used as a redistribution mechanism.
But I think it leads to these outcomes predictably with a splitter placed on how much control the government exerts over the practice and how much control the patients exert on the government.
> but you'll never be denied care if you pay for it yourself.
If you can pay. You're still required to have insurance anyways. Which is a regressive tax and harms the people most in need of these services. It's a cruel joke.
Those living paycheck to paycheck are screaming at you right now.
The problem is that patients are usually not in a position to determine if the care the doctor says is needed is really needed or not. This is the same as taking your out-of-warranty car to the mechanic. How do you know if the mechanic is telling the truth?
Still, this would be better than the current system. Even when you don't know if the doctor is telling the truth you can go by their reputation for telling the truth. Reputations will matter more, and doctors will care about maintaining their reputations in their community.
Reputation is pretty much worthless. Patient reviews are largely based on how nice the doctor seems (bedside manner) and have no correlation with actual clinical outcomes.
The ones who can't afford it (<200% federal poverty level) are covered in Texas. Friend who gave birth in Austin, TX talked to other mothers in the ward and one was having her second under that. There's lots of programs that cover this. Abortion should be legal, yes, but you won't be out that amount if you don't make enough.
System seems fine, though I think I'd prefer if we completely subsidized childbirth and 12 months after for all (because those are people who will keep us solvent in the future).
This sort of thing gets to two critical problems of the American system: 1. It is largely designed to make money, not actually help patients. So every step in the healthcare chain that can extract a bit of value will do so, largely to boost profits. 2. Insane complexity with limited transparency. How much will something cost? Hard to tell. Will it be covered? Who knows?
On the opacity, I have one informative anecdote. I had a single blood test done awhile back and no one knew if insurance would cover it, or which of the dozen or so billing codes it involved (taking the sample, delivering the sample, testing the sample, etc.) might be covered. It was an expensive test so I spent days bouncing between the doctor's billing team and the insurance company until the settled answer was: No one knows, do the test and insurance will decide. So I did it and insurance denied covering the doctor-recommended test. The salaries involved for all the billing people (and my time) would have covered the cost of the test. </rant>
Here are the magic words in US Health Care: "What is the cash price?"
It's usually less than you think and often worth avoiding the insurance company hassle. Then you can just get reimbursed with your FSA or HSA anyway.
FSAs are insane, conceptually.
"Guess how much money you're spending in a year on healthcare! But beee caaareful: if you guess too high, YOU LOSE IT"
I still used mine while I still had access to one, but it was grumpy-making and was usually almost more trouble than it was worth.
FSA makes no sense. The money should just go into an HSA and be available whenever needed. Nut just this year. It should just be abolished.
FSA exists in this strange no-mans land of many insurance plans where HSAs cannot go.
I lost some money, or at least had a hard time using it, because I was quoted a price for something, set the FSA for the next year based on that, and then the billing ended up where only some of the price was eligible for FSA.
Combined with the PITA level, there's no way I'm doing it again. I can't see how it's worth my time. One of these three options is very likely:
a) my income level is low, so every dollar counts, but my marginal tax rate is also low, so spending a ton of extra time on this is not worth saving ~ 15% on taxes for health care
b) my income level is high, so my marginal tax rate is high, but saving 40% of taxes for health care is not worth the time, because health care is not a meaningful amount of income
c) my health care spending is high relative to income, and I can deduct health care costs on my tax return. Then I can deduct a lot more than the FSA will reimburse for, and the records don't need to satisfy a third party, unless I'm audited by the IRS.
There are a few caveats with the medical expense deduction.
* It's only a deduction for income tax. FSAs let you save on FICA as well.
* It's an itemized deduction. You only benefit after your total itemized deductions exceed the standard deduction. Fewer people are itemizing nowadays because the federal standard deduction is large.
* There's a 7.5% of AGI floor: you can only count medical expenses that exceed this fraction of your income.
It is a relatively easy fix tbh. You spend on medical bills through the account like you do right now, but the way you fund it is your post tax contributions. At the end of the year the account sends you a statement of what you used and you can use it to get the tax paid on the money back when you file the taxes.
> At the end of the year the account sends you a statement of what you used and you can use it to get the tax paid on the money back when you file the taxes.
If you underestimate the amount you spend by more than the rollover limit, you can't get that money back.
So on top of the broken employer-tied health insurance system, we have gamified the financing of out of pocket medical expenses.
On top of that, if you lose your job part way through the year, you lose the balance of any FSA funds remaining (they belong to your employer - I found that out the hard way).
The comment was about how to fix the current FSA. Instead of funding it with pre tax dollars and then losing it if you don’t use it, you fund it with post tax dollars and then get a reimbursement on your tax filing annually. That way, you can fund it as you need, spend it and then get back the tax because you spent it on medical expenses.
I misread that. Thanks for the clarification.
And if you're wrong on your medical expense paperwork it could be a felony!
Why shouldn't the institutions that do this all day and claim it as their special expertise handle all of this? Why should I even be /capable/ of losing money due to my lack of experience with the system?
The money is forfeited back to the employer. There should be a law that money is now taxed and forwarded to the employee in their regular payroll.
This system is designed to screw over regular consumers.
Like I said, you don’t have to do anything. It’s would be like your W2 as long as you use your account.
What do you mean by 'use the account'? Spend the money? That's the problem. If you don't have enough expenses you just lose the money. That's why I've never used one of these.
Please read the entire thread for the full context which you are missing.
If by "the entire thread", you mean all the ancestors of this comment, I already have.
I'm not sure which of these is supposed to be the context I'm missing. It may be the "It is a relatively easy fix tbh..." comment. I couldn't understand the wording of accounting procedure there.
It’s not great for everyone but if you have kids with braces, family members who need yearly glasses, consistent prescription costs, etc then it is pretty easy and worthwhile.
FSA does have the concept of rollover of up to $600 but its up to the employer to decide. I imagine that full rollover is not allowed because otherwise people would use the FSA to defer some tax payments to end of year. But there are ways they could have handled it better.
I don’t understand why any decision maker in any business in the USA chooses to offer their employees (and hence themselves) health FSAs at all, especially when the much superior in every way Fidelity HSA is available.
All the FSA money in your account is available immediately at the beginning of the year. Ironically that would make it a better choice for anyone with a lot of medical expenses on an HDHP if it wasn’t for the fact that FSAs are capped by law.
As someone who does deal with enough medical stuff to clear the deductible (and sometimes the OOP max) on their normal health plan annually, it’s still much more convenient, again because the money is all there at the beginning of the year when the expenses are highest
My HSA money is also available in the first pay period of the calendar year. It’s up to the employer to decide when they want to contribute it.
I think he is saying that if you want your FSA to be $5000 then it’s funded immediately but it gets taken out of your paycheck every pay period.
HSA is funded as you go
That assumes your employer does any contributions to your HSA. And if your employer is sticking you with an HDHP, that’s not always a given. Your own payroll deductions are pay-as-you-go
FSAs are limited in scope if you have a HDHP by law. Only LPFSAs are allowed. HSAs don’t have that restriction other than you have to be on a HDHP to get it
HSA requires a high deductible health plan, not everyone could afford that deductible.
"To contribute to an HSA, you'll need to be enrolled in an HSA-eligible health plan, also called a high-deductible health plan (HDHP)."
Yup, I agree HSA is superior but depending on your situation (and plans offered), the HDHP can be much more expensive out of pocket[1], even if you're paying with after tax dollars. Sweet spot I think is using a good low deductible plan when it makes sense but having a spouse with an HSA which both spouses can use for expenses.
[1]: or so it seems, I tried to figure this out earlier in the year and the data is just lacking in order to make a perfect decision.
HSAs are only available alongside high deductible plans (HDHP), which aren't necessarily ideal in all situations. FSAs are the only option like that if you don't have an HDHP.
Surely, that is offset by having to forfeit or waste any FSA money not needed by the end of the year. It really only makes sense if you have a minimum amount of guaranteed healthcare expenses every year.
What is the point of having a low deductible when you could put the premium difference in a HSA and use it on either the deductible or something uncovered?
The math on whether you are ahead with the HSA or not is non trivial, especially if you are married and neither employer offers any subsidy when you put your spouse in your plan. HSAs are often better, but it's a very unfortunate math problem, where you carry quite a bit of risk. The HSA contributions from your employer are often nowhere near enough to make it win all the time. If your employer's does, consider yourself lucky. On any given open enrollment, my household has at least 30 combinations of healthcare plans to consider, and that's ignoring dentals, visions and the like
There are some cases where an HSA is unavailable. I've had an employer not offer a high deductible plan. I've had an employer offer a high deductible plan, but the insurer not supply it in my home state.
There are cases where it doesn't make fiscal sense. One employer covered 1x premium/employee(spouses and kids were full rate).
I've never seen the point of HSAs, either. The only benefit is the tax difference. There are (usually unknown, unstated upfront) plan fees that eat into that, and coupled with the higher deductibles and worse plan coverage, you're going to pay more out of pocket. It's never been clear to me if (higher OOP + plan fees) < (tax savings) is true, like they want you to believe.
And it's a time suck.
An employer sponsored HSA is the single most tax advantaged account in the US, and Fidelity HSA have no fees. No FICA tax, no income tax going in, on investment returns, and coming out. Worth tens of thousands of dollars over 20, 30, 40+ years.
If your employer is shitty and doesn’t offer Fidelity HSA, you can also easily rollover the HSA funds to Fidelity every year to avoid the fees.
The coverage for HDHP plans is the same, since it’s the same insurer. The only change is deductible/copay/oop max, which is offset by lower premiums and higher cash flow for younger/healthier/higher earners shouldn’t matter.
HSAs are one of the best accounts and last until death.
lol totally agree. At my first job I had one, and totally misjudged. I ended up with an extra thousand dollars left and then had to read the fine print on what to spend it on - ended up buying a 10 pack of acupuncture sessions that I didn’t need but were very relaxing
Cue that tuba/horn motif from "The Price is Right" (famous for "guess as close as you can without going over")
> FSAs are insane, conceptually.
Indeed. I don’t understand why they cant just make medical expenses tax-deductible up to a certain amount. The effect would be the same. Why do I need a separate account for it, and why do I have to guess how much I’ll need every year (as you pointed out)?
I guess at least part of the answer is that the companies administering FSAs make money out of this system. Sigh.
> I don’t understand why they cant just make medical expenses tax-deductible
We have that, although the deduction only starts after a certain amount which makes it useless to almost everyone.
The issue is that it only kicks in when you itemize your deductions and it has something like a $10k cap. The standard deduction is 15k for a single and 30k married.
Unless you have a bunch of other things to deduct, it's often the right choice to just use the standard deduction.
Unless your a homeowner with a mortgage, then it's almost always better to itemize
Not so much anymore. The standard deduction for a married couple is now above 30k. It would take a large mortgage to pay that kind of interest in a single year. (Principle is not deductible; only interest)
That's going to skew towards blue states and metros.
I’ve only used HSAs. Can you reimburse prior year expenses from an FSA? If so, allocate the amount you sent last year, reimburse on Jan 1st.
HSAs are your money regardless once you have it (except management fees). So you can spend it until it is gone. FSAs are a very specific set aside for a single year of billing, you can neither spend it on a bill for say, December the year before, nor use it for medical care in January the year after.
Unless you have an approved gym membership for which it can be used for ! With 30% discount !!
where "approved" means approved by the FSA plan administrator, not by your doctor, even with prescription? Which gym was this? a large chain? IME very few gyms are approved. (which is bad health policy, considering how good they are at preventative medicine.)
Yea, FSAs are dumb. Luckily nobody forces you to have one. Just get an HSA like a sane person.
Pharmtech: "With your current insurance we can't sell you this medicine at any price. We're under an agreement."
Me: "Okay, what if we don't go through insurance?"
Pharmtech: "$45 for the prescription."
Me: "That's a bit higher than last time."
Pharmtech: performs some sort of incantation "Okay, $12."
Me: "How did we go from not at any price to $12?"
for those of you keeping score at home, the medicine was generic colchicine which costs $.30/dose (https://pmc.ncbi.nlm.nih.gov/articles/PMC7851728/), and I was getting 12
Medicine not in formulary. Their clinical department decided it was not worth covering for $reasons. The Pharmacy, likely to be considered a preferred pharmacy, signed a contract to be bound by that company's clinical formulary for policyholders.
$45 was probably cash price, the they can let it go for if they do their ordering through a pharmacy supply group.
$12 may be a price with a discount program like GoodRx applied. Data changes hands behind the scenes to make the lower price at the till possible. Don't know how GoodRx works, but been around long enough to know you're probably the product.
You'll be amazed the complexity of the pharmacy benefits management complex.
t. Been there, seen it, tried to fix it best I could, left in abject horror.
> Don't know how GoodRx works, but been around long enough to know you're probably the product.
- GoodRx was penalized $1.5m by the FTC 2/2023 [0] for sharing sensitive personal health information with third-party advertising companies (Facebook, Google, et al), without user consent. Then in 2024 it paid a $25m settlement arising from that action [1].
- GoodRx isn't subject to HIPAA, it can legally share "non-medical" information, i.e. your prescriptions, which often have a one-to-one (or one-to-few) correspondence to specific conditions. Hence, sidestepping HIPAA.
- its business model relies on collecting user data, which may be a concern for privacy-conscious individuals.
[0]: https://www.ftc.gov/news-events/news/press-releases/2023/02/...
[1]: https://www.hunton.com/privacy-and-information-security-law/...
Turns out there are rational commercial players in these markets if you just go all-cash. The price is abandoning the incantations and local pharmacies, hospitals, ignoring your insurance. Harder to do that with services, but it’s coming as well.
It’s deeply frustrating that the $12 doesn’t go towards the deductible. I just saved the insurer a bunch of money!
You did nothing from their point of view except waive having them cover the claim, thusly leaving more money on their hands to be managed longer. Your "price discovery" isn't something they aren't aware of. On the contrary, their surveillance/clinical team have been crunching the numbers and making unilateral decisions on how the population is best guided to drugs based on their bottom line benefit to the insurer.
You don't really factor into it except as an actuarial data point. But you might have kicked off an overpayment check back to the consumer in 12 months because golly gee, those pesky regulations! Don't worry though, you can hand it back because the premiums went up again!
I found another really interesting one when my wife needed $30k in dental surgery. We hurried up and got the American marriage so that they could use my dental insurance only to find out that my plan has a LIFETIME LIMIT OF $1200. But what came to our rescue was good old collective bargaining! They call it a discount plan and basically the way it works is that for a small fee an insurance company will essentially draw you up a plan that counts you as a member but where the insurance company is explicitly not liable to pay for anything at all under any circumstances. The practical upshot is that you as a new Crap-Tier member of this insurance plan get the same negotiated rates as everyone else on this insurance plan, including the ones who pay through the nose. You still have to pay everything out of pocket, but to use this as an example "everything" went from $30k to $18k with the stroke of a pen and $50 in signup fees. This is one of the few things that an insurance company is doing that I think is actually great. The rates are exceedingly reasonable, the upside is amazing and because it's not technically insurance there's no pesky BS about open enrollment or you have to be married or you can only use it if your costs are above x once you've paid y and only if you've spent more than z this year but less than alpha your entire lifetime etc. Purely and simply walking into the office and going "Hey, there's ten thousand of us. Give us a fair rate and gain ten thousand customers or don't and don't."
There's an XKCD where the person who did the file download dialog for Windows visits some friends, https://xkcd.com/612/.
"I'm just outside town, so I should be there in fifteen minutes...actually, it's looking more like six days...No, wait, thirty seconds"
Sounds like that guy got a job setting prices for prescription medicine.
this is actually what it's like getting pants hemmed at men's wearhouse once the salespeople realize you won't be paying their rent today with the commission on a big purchase. I needed them in a week. Dude quoted me 3 weeks, then 10 days, then 8 days, then said he could get it done in 15 minutes. I get that under the hood capitalism is about charging the most you can get away with and offering the least the other guy will expect, and he's supposed to do the same and y'all strike a middle ground that makes nobody happy but is acceptable to everyone. But you're not supposed to flat out look at me and go "What's the worst you'll accept from me right now?"
I’ve found, as a fairly recent phenomenon, it’s often higher than the insurance price. The pessimist in me thinks that insurance companies have worked to close that loophole. They need to maintain the illusion of their utility, after all.
This is the magic endgame for insurers. Make your product so hard to use that people give up and don't even use insurance.
Sorta. The reason to go thru insurance is to count the money paid against your deductible. If you pay cash outside insurance, it doesn't.
And if you have an HSA, you have a high deductible plan.
This is absolutely unacceptable when per employee healthcare employer costs are basically now something like, I don't know, 20,000-25,000 USD?
I’m not precisely sure but I think my health coverage paid by my employer is like 15-20% of my salary
not magic words. sometimes cash price is non-insurance price and is 3x the insurance price. since insurance and providers have a negotiated rates. so paying cash means paying 3-5x
>Here are the magic words in US Health Care: "What is the cash price?"
I'm not so sure about that. Especially in a hospital setting.
Many years ago, I was admitted to the hospital for several days as it was suspected (wrongly, but that's another issue with the perverse incentives in US "healthcare") that I had MRSA and the doctor wanted me on IV antibiotics while testing proceeded.
I spent three days in the hospital, getting discharged when the tests came back negative for MRSA.
Shortly thereafter, I received a detailed "explanation of benefits" (EOB) from my insurer, which put the cost of my hospital stay at ~USD$12,000 which included stays in two hospital rooms simultaneously as well as a pap smear (despite the fact that I do not have a cervix). When I complained about this, the insurer tried to make it seem unimportant, but I pressed the issue as both the hospital and the insurer seemed to be involved in some sort of fraud WRT billing.
I was told I shouldn't care because I wasn't actually paying, but I persisted as I was concerned that there was something hinky going on. That culminated in a conference call with my insurance company, the hospital's accounts receivable group and me.
The two other parties talked in insurance billing jargon for a while, but when pressed, they stated that the charges on the "explanation of benefits" was a fiction and that the insurance company and hospital group's contract set a USD$1,500/day flat rate for patients admitted to the hospital's facilities -- roughly 1/3 of the "costs" cited in the EOB.
The made up stuff (which they didn't even try to hide that it was made up) was there as "protection" for the hospital group as the "cash price" of such services, even though I couldn't have received such services (two rooms at the same time? A pap smear[0] despite the fact that I don't have a female reproductive system, nor do/did I present as anything other than a cis male?).
I imagine that there may be some cases where a "cash price" actually does reflect costs and might even be less than insurance costs (although that seems unlikely given my experience), but insurers and healthcare providers do and have for decades gamed the "cash price" to justify the insane overcharging of healthcare services. YMMV.
[0] https://www.mayoclinic.org/tests-procedures/pap-smear/about/...
Right, that's the part that most consumers don't understand about inpatient bills and insurance claims. They hear stories about a "$100 Tylenol" or whatever but those line items often don't actually impact the amount charged to the patient's health plan. Many of the numbers are completely artificial and essentially only serve as placeholders for the accounting and ERP systems. I'm not trying to defend that system but for complex path dependency reasons it's difficult for anyone to reform.
"What is the cash price?" magically puts you back in the land of Classical Capitalism, where the service provider wants to keep you as a customer and knows their internal costs and you as a consumer of the service can evaluate their reputation for quality and cost vs other providers.
It's adding 3rd parties like "insurance" (which only works as insurance in very limited catastrophic circumstances) and government plans that create the nightmare of the Mystery Price Only Knowable After Service Has Been Rendered.
Are you calling it the magical land because it doesn't exist?
I doubt your doctors office can commit a cash price for the lab they sent you blood too.
And try doing that at a hospital and see where it gets you
The lab does the blood draw. You pick the lab and negotiate with them.
Put yourself in my shoes last year.
You go to your doctor, you have a suspected tick bite with a bullseye pattern around it and a red streak running away. Your doctor is concerned about tick born illnesses and the red streak suspecting the start of sepsis. They need to determine asap if they can treat you with docycline or if you need IV antibiotics. They need to assess your blood for a CBC to determine immediate risk factors like sepsis. They also need to asses for pathogens like Lyme disease, alpha-gal syndrome or that other tick disease I can't remember. This will determine what antibiotics will be effective, and if eating red meat will make you anaphylaxic, and you need to see an allergist if you ever want to eat red meat again
There's a place in town that can do the CBC, the test for alpha-gal is only done by two labs in the country, nearest one is in south Carolina two states away. There's more, but not many more that test for the other two diseases, the closest one is almost the whole country away in salt lake city.
You have to know ASAP to determine your next course of action.
In your proposal, do you call south Carolina and then fly there? Do you do the same to salt lake city? You've still got to find and negotiate with someone local for a CBC. Salt lake city doesn't have the same balance billing law your home state does, you could pay more than your cash price there if they involve another provider.
What do you do? Gotta act fast, or you could wind up with life long neurologically symptoms or even die.
I had a tick bite that was irritated (but not a bullseye rash that I could see) - phoned GP practise, doctor phoned me back a couple of hours later and discussed the situation, ruled out blood tests because they said they were inconclusive at best and arranged for a 3 week course of antibiotics. My wife picked them sup from a pharmacy later that afternoon as she was in town anyway. No direct costs, no mention of money, insurance or anything at the doctors or the pharmacy...
You are getting snagged on the surface level discussion about tick bites, rather than the real discussion about the complexity of medicine.
Note the last sentence of what I said.
Edit: Discussions of US healthcare all seem insanely complex to me - but it all seems to be about insurance and money - which are the last things I want to think about if I am ill or injured.
> And try doing that at a hospital and see where it gets you
I do believe it gets you gigabytes of text, copy protected PDFs, unsearchable PDFs, and other horseshit due to https://www.cms.gov/priorities/key-initiatives/hospital-pric...
> I doubt your doctors office can commit a cash price for the lab they sent you blood too.
Why the hell not?
This is not a difficult problem to solve under the "Classical Capitalism" model.
Because they don’t own the lab? It’s an entirely separate business?
Why wouldn't the lab have a price list for their services?
I'm not sure how much I want healthcare accessibility determined by "Classical Capitalism". The vast majority of things I buy are fundamentally optional, so the supply/demand can be negotiated. Some reasonable part of healthcare is largely non-optional.
I suppose you could make an argument that my sky-high demand should encourage new market entrants thereby balancing the supply to the market demands. However, in many healthcare cases, there are too many impediments for that to be realistic (patent exclusivity, manufacturing complexity, etc.).
Good luck a) actually getting a price named and b) having that price be honored.
Outside of certain procedures which are used to cash payers (dentists, lasik, plastic surgeons, imaging) this is nearly impossible in my experience.
…. So you pay many thousands a year for insurance, but it’s easier not to use it?
Ummm
Yep. It’s a very lovely system.
It is cheaper not to use it.
In Australia I just take my blood test form to any pathology place and they do it for free (for me) and bill the government a set price from the medicare benefits schedule.
Hmm sure, but there must similarly be things that are denied right?
I lived in both systems. In a single payer system, the state essentially decide what is allowed and what is not. And with the state as a single payer, they also go back and forth on price with the hospitals.
It still is a better system overall but there is no places where you can just spend as much as you want on healthcare without some type of centralized supervision.
Yes, in Australia what and how much of it a doctor can prescribe is tightly regulated. Many medications require a specialist referral and approval. Any medical procedure requires a specialist to sign off on it.
That and there is often a 'gap' that needs to be covered for GP and specialist services, although that tends to be balanced out by much cheaper prescription costs. (Prescriptions in Canada for example easily cost 2X as much).
However, Australia has a two-tier system where you can buy private insurance cover that can cover the costs of gaps and allow you access to private hospitals. This insurance is much cheaper than the equivalent US versions.
It's not a dichotomy between single payer and US-style private insurance. You can have public healthcare that isn't single payer - that describes a good half of Europe, for example.
There are tests, proceedures etc that are 'denied' coverage by Medicare(universal health coverage) but you can try get your private health insurance to cover it, or just pay out of pocket, unless it's the doctor refusing the request as not medically necessary.
I had a test recommended once that was not covered, but my Dr explained this in advance and the cash price to me was $110. There are no 'surprise' denials after the fact.
> There are no 'surprise' denials after the fact.
this is the crucial difference.
It's absolutely fine (and required even) that single payer public healthcare doesn't cover every conceivable thing under the sun. It should cover the most common, easily scaled and mass produced items.
For the remainder, the patient should be told and know what to expect price wise - private or self-paid etc. And this also allows competition between entities offering this thing that's not covered.
Having opaque and unknown pricing (until after you've done it) is basically a form of highway robbery.
> In a single payer system, the state essentially decide what is allowed and what is not.
Usually if the state decides you are not eligible for something (for example, some examination), you can just pay and get it anyway.
In sensible countries that decision isn’t made after the fact. You know going in if it is covered or not.
In Britain the national health service is a single payer and there are some things it won't fund, but you are still free to take out health insurance or be a self pay customer and go to a private doctor or private hospital.
In my experience, its not so much what the NHS won't fund but getting access to what it does fund in a timely fashion.
Of course there is dentistry, which is a complete nightmare... people trying to do their own extractions with a pair of pliers is the sort of thing you used to associated with the US but I've actually met some people who have tried that due to how poor NHS dental services are and how expensive private treatments are.
Weirdly enough the US is actually amazing for dentistry.
With any insurance you get 2 cleanings every year fully included and most routine fillings are almost completely covered. Easy to find appointments everywhere
My experience in Europe has been that it is super difficult to schedule anything. Waiting time of multiple months for new patients.
Yes, my (private) dental insurance in the UK is similar. If you go private then no real problem getting treatment as soon as you need it (I got an appointment in the same day recently when I broke part of a tooth).
Long queues are what most people will notice but some things are not approved by NICE or are limited to control cost, for example IVF.
You're right about dentistry.
I've had numerous encounters where doctors (and dentists) attempt to charge me for services they've already been reimbursed for from the insurance company.
It's only after hours of scouring my EOBs and being on the phone with my insurance that I then come back to the practice's office with evidence in hand, and they dismiss the charges.
I'm pretty sure this is just a racket because they expect most people not to put up a fight and just pay, or get sent to collections hell.
The amount of work you need to do as a patient in our health system is so dumb.
1) Report fraud to insurer? 2) Get a lawyer?
Would any of that work?
Where do you live, so people know not to move there? Jesus.
I’m pretty sure this is the US.
Sunnyvale, California.
> No one knows, do the test and insurance will decide
Oh, someone knew but the doctors office wanted to do the expensive thing and get paid (either by you or the insurance)
Not saying the blood test was unnecessary but we have no idea what communication happened between the doctor and insurance company. Did they possibly recommend a less expensive test and the doctor decided that'd make him less money so he went forward anyway?
Health insurance companies have told me, on the phone, that they will not tell me the codes the doctor needs to charge for preventative visits in order to for my visit to be covered as preventative care (meaning I don’t have to pay anything).
However, I could tell the insurance customer service person a code, then they could tell me if it was classified as a covered preventative service.
So I, the insurance company’s customer, Googled medical procedure codes and found some on random PDFs, and checked which ones were covered, and then I asked the doctor to provide me the services for that code.
That is American healthcare.
On the flip side, I also had a doctor’s office try to bill my insurance $25 for towels used to wipe the ultrasound jelly off my wife’s belly. My insurance didn’t pay, so the doctor’s office sent me the bill for what insurance didn’t cover, so I called the doctor’s office and asked why I am being charged $25 for the few pieces of paper towel (not even linen towel), and the receptionist said they would waive the charge.
So, moral of the story is bring your own paper towel roll when you expect to get messy at the doctor’s office.
> However, I could tell the insurance customer service person a code, then they could tell me if it was classified as a covered preventative service.
Malicious compliance engaged.
Start with code “1” and go to “99999999999999999” until they tell you it’s covered.
Or ask your favorite LLM.
No, I assure you, it is very common for doctors' offices not to know whether a particular procedure will be covered.
This is not just because of the capriciousness of insurance adjusters, but because they have to deal with all the 273 different variations of insurance plans that people who come through their offices might have.
In general, a doctor's primary goal will be to get you good care.
An insurance company's only goal nowadays is to make as much money as possible for as little effort as possible.
> An insurance company's only goal nowadays is to make as much money as possible
How can that be true when their profits are capped on collected premiums? Look up the Medical Loss Ratio (MLR) rule to see what I'm referring to. If you wanted to squeeze money out of people, health insurance would be the least appealing industry to do that in since you're required to spend 80-85% of premiums on medical care.
So increase the health care spending, then you can raise premiums. An issue the ACA drafters already knew about, and tried (and failed) to deal with.
The linked article is about insurers trying to reduce spending by downcoding.
So which is it? Insurers unfairly denying reimbursement for what should be valid claims, or insurers unfairly increasing spending on claims so they can increase their profits.
Also, go look at 5, 10, and 15 year returns for the big insurers (UNH/Elevance/CVS/Cigna/Humana/Molina/Centene) if you think health insurance is a good business for earning money. Spoiler alert: they’re less than desirable, stick with SP500.
Let me tell you about this little thing called Hollywood accounting
Hollywood accounting has nothing to do with legal accounting standards that are followed for publicly listed companies’ required SEC reports.
https://en.wikipedia.org/wiki/Hollywood_accounting
The only thing Hollywood accounting does is affect poorly written contracts between businesses.
A 25% margin is pretty good, and companies aren't hitting the limit currently.
The 7 publicly listed health insurers have ~2% profit margins, with the exception of UNH at 6%, but that is due to its healthcare provider business earning higher margins.
The other insurers are almost all non profit (various BCBS affiliated insurers, Kaiser, Providence, etc).
Not sure what the relevance of that is. If anything, small profit margins just further incentivize trying to pay out less.
You wrote they had 25% margins. And obviously a business with 2% profit margins is incentivized to spend less, if they didn’t, they would be out of business!
Gross versus net margin. The other commenter was saying they don't have incentives to cut costs because of the MLR limit, but that limit is a 25% margin over the cost of their "product." For a product that boils down to just moving money around, 25% is pretty good.
This is illustrated by the fact that they aren't actually bumping into the legal MLR limit currently. It would make sense if they don't care about cutting costs because the law doesn't allow them to spend less, but that's not where they are at the moment. If they could cut their medical spending by 1% they could increase their profit by 40%.
> The other commenter was saying they don't have incentives to cut costs because of the MLR limit, but that limit is a 25% margin over the cost of their "product." For a product that boils down to just moving money around, 25% is pretty good.
I don’t know where you are getting 25% from. See exhibit 2:
https://www.oliverwyman.com/our-expertise/insights/2024/sep/...
Medical loss ratios float between 80% to 90%, leaving 10% to 20% for operating costs and profit.
Their “product” requires enormous manpower to negotiate contracts, handle customer service, lawyers for the government, and most of all, employ doctors and pharmacists to adjudicate claims.
> It would make sense if they don't care about cutting costs because the law doesn't allow them to spend less, but that's not where they are at the moment.
Of course, and the obvious fact of the matter is insurance prices are heavily regulated and there is competition, so they already have an incentive to control costs in order to control premiums. Which is literally what their customers pay them for, to negotiate with healthcare providers with whom customers usually wouldn’t have leverage against.
>If they could cut their medical spending by 1% they could increase their profit by 40%.
Sure, but in industries like insurance and retail, the low single digit profit margins indicate a more pressing need to survive, rather than increase nominal profit.
The legal minimum MLR is 80%. So if you spend X, the maximum revenue you're legally allowed to have is X * 1.25.
Sorry, I am not following.
Medical loss ratio = medical expenses divided by revenue.
Margin = money left over after various expenses divided by revenue
So if revenue is $100, and medical expenses are $80, then the remaining funds are $20, or 20% margin.
You’re right, I had the idea that you divide by cost, not revenue. So a 20% legal maximum margin. Which is still a fair bit above what they actually achieve, so there’s plenty of motivation to reduce their medical spending.
>An insurance company's only goal nowadays is to make as much money as possible for as little effort as possible.
That's the goal of almost every business and person
Fire insurance protects against the rare disaster where there's a fire.
Flood insurance protects against the rare disaster where there's a flood.
Health insurance protects against the rare disaster where somebody's actually able to get healthcare.
I disagree with the language you use.
It was not designed to make money. It was designed to cost less, in the same way the USSR was designed to make workers rich - it simply failed spectacularly.
Neoliberals dislike both regulation and public ownership, but made a Faustian bargain where they replaced public ownership with more regulation, thinking that regulation was the lessor of the two evils. In reality, it's not - like in the USSR where they had corporatised but heavily regulated "companies". A heavily regulated company doesn't make money by offering better value to customers, it makes money by finding loopholes in regulations, and regulators will always lose the cat and mouse game of closing these loopholes.
Neoliberals end up creating a system that's actually a lot like the USSR (if the famous "Well intentioned Commissaire" essay is representative of the USSR) - heavy regulations, with corporate entities outsmarting the regulators to enrich their owners (or managers) while minimising the value they create. Neoliberals deny the need for pubic management, but are forced to badly reinvent it (via heavy regulation). Communists deny the need for incentives, and are forced to badly reinvent it (once again via regulation), ending up not a million miles away from where neoliberals end up - with endless regulation and lost efficiency.
It's worth noting that the US spends far more tax dollars (per capita) than Australia on health (Australia has a hybrid public / private model). Medicare, Medicaid and the VA costs about as much as Canada's expensive public system (per capita) since the US is so insanely inefficient.
(edit: The essay I mentioned - https://highered.blogspot.com/2009/01/well-intentioned-commi...)
I'm sorry, but this is bullshit. The American system is nothing like the Soviet one. I've seen both first hand. Both are kinda crappy but in very different ways. If I had to choose one though it'd be Soviet for sure because it's still guaranteed healthcare no matter what your financial situation is.
So you deny that both the US healthcare system and USSR economy are / were bogged down in red tape and regulation, which is clearly my main point? Or you're just mad that I'm using Communism as a punchline when criticising neoliberalism?
Yes. The Soviet system did not require me to jump multiple hoops to get healthcare. Either it was covered or it wasn't, and if it was then there was surprisingly little bureaucracy for the end user.
I'm not a fan of Soviet communism in general, and that's putting it mildly. I'm not a huge fan of its healthcare system either because while it was truly universal, it deprioritized patient comfort - so e.g. many things would be done without anesthesia or with only the very basic stuff that wasn't particularly effective. Dental, in particular, was a nightmare.
Nevertheless, your points are so wildly off that they deserve pushback.
The biggest problem with the American system is that it's just illegal for me to sell you good, simple insurance.
Let's say I draft an insurance contract that says for any treatment if >5 of 10 randomly selected doctors agree that the procedure was warranted, then I have to pay out the cost of the procedure, no questions asked. This contract is less hassle, clear, and doesn't require arguing with an insurance company since it specifies how disputes are resolved.
But I'm not going to give it to you for free. I need to know the expected payout in order to come up with a price and sell it to you. You know, like how all other insurance works. There is a price that is positive EV for me, but better aligns with your risk tolerance, and is therefore positive utility for you as well. In America, pricing it is illegal. I cannot, by my own methods, determine a fair price and sell it to you.
That's why we can't have nice things, because it's illegal for two people to agree on a price and terms and create a good deal for themselves.
There's plenty of upcoding going on with doctors as well though.
I go to a particular doctor and I'll see a bunch of random things on the bill that don't seem to have anything to do with my visit. Like a thousand dollars worth.
But then insurance rejects them, but I still don't have to pay a cent -- the doctor never actually charges me.
It seems quite clear they're just trying to throw things at the wall and see what sticks.
Everything about American healthcare is bad.
There's plenty of hasty generalizations going on in this comment.
If you see this sort of thing happening in the U.S., the place to complain is your state's insurance board.
Medicine is hard enough without people TRYING to do harm.
And actuarial science is brutal enough WITHOUT glossy justifications for assuming that healthcare providers are bad actors.
>Everything about American healthcare is bad.
Except the part where you are cared for by a competent clinician?
Are clinicians any more competent than in other countries with similar levels of training? In Europe, UK, or here in Australia for example, the quality of public care seems to be competitive with the US, and the quality of private care here seems often even better.
I've heard this "US healthcare is expensive but at least it's good" thing a few times, but never with any particular evidence, and from the few numbers I remember seeing, healthcare outcomes are generally no better.
I didn't know American health care is known to be good. According to random lists I find it ranks pretty average.
See numbeo it's 39 for Health Care Index https://www.numbeo.com/health-care/rankings_by_country.jsp
Much of this will be because most Americans struggle for access to healthcare. That's the bigger issue of course, but here we're specifically focusing on those who do have access, and even with access, American healthcare isn't necessarily better than its peers.
I read the post you replied to as simply meaning it's a non bad thing, not that it is better care than elsewhere.
Perhaps that was all that was intended by it, if that's the case I guess I don't have a problem with it, the US does have competent clinicians.
But my interpretation was a rebuttal to the cost, linking it and suggesting that paying so much gets you better healthcare, something I have heard from defenders of the US healthcare system in the past. As far as I understand it this link is not causal.
In Britain you generally get the exact same Consultants working in the public and private sectors. Private hospitals have shorter wait times so on that measure, paying gets a better service. Comparing outcomes is complicated since the private sector only sees patients with more wealth
Right. That said, I actually do suspect the 95th percentile of clinicians may be better in the US. I’m not sure, though.
This doesn't surprise me: The "fee for service" system encourages doctors to perform as many services as they can so they can bill for more. I've certainly had my fair share of tests and procedures where I wonder if the provider was just trying to find something to bill for.
I'm also not surprised that some providers will try to figure out which codes they can use to get the most revenue. ("Hey, if I do procedure A instead of B, I get paid more, so why would I do B?")
That being said, I also wouldn't be surprised if many of these turn into lawsuits, or ultimately push to revise the whole "fee for service" system.
The counter to this is that now when you go to urgent care, they're only allowed to do one thing and send you to the ER for any other concurrent problems where you pay 10x more because it's an "emergency"
"Figure out which codes they can use to get the most revenue" is a billion dollar industry with many players, subspecialties and surprisingly few lawsuits.
A lack of lawsuits can just be an off the record agreement that no one benefits from the entire mess being dragged in front of the courts with public record laws, because that is how you give future Luigis ideas.
The more shady the industry, the more everyone involved is shying awaa from sunlight.
I've seen a lot of upcoding on my bills and it really aggravates me. It's fraud and the doctors should be happy that the insurance company is just reducing their payments instead of dropping them or trying to get them prosecuted. When someone loads their grocery bag full of cosmetics and razor blades, they get on the news and YouTube, but when a doctor systematically bills for services he didn't perform to the tune of millions of dollars, almost nothing happens.
Doctors lose their license and go to jail for Medicare fraud all the time.
> When someone loads their grocery bag full of cosmetics and razor blades, they get on the news and YouTube
What does this part mean? I don't follow.
They're talking about shoplifting. Specifically hiding high dollar items in with their groceries, a practice akin to just adding a little bit extra to a medical bill for services not performed.
I’ve lived under several different healthcare systems around the world as an adult. Coming from my time America, nothing felt more like freedom to me than walking out of a hospital in London, with a new child, and having had no interaction with a billing desk.
On the other hand, aren’t comments like yours about the aesthetic experience of billing exactly the problem? It’s not like you didn’t pay for healthcare in Europe, you just had good vibes about the particular way that you paid. Employer sponsored health insurance plans are popular and also give good vibes.
> Employer sponsored health insurance plans are popular and also give good vibes.
This sounds so crazy to me that I feel like something got miscommunicated.
Who has good vibes about their health insurance? In America?
It's not the "aesthetic experience". It's about paying fairly and progressively in a predictable way via taxation, vs. completely unpredictable billing in the US. Is it in network? Is it pre-authorized? Did your doctor code it correctly? Is it below your deductible? Is there a copayment? What mystery charges will there be? What will insurance refuse to cover, wrongly? How many rounds of appeals will you have to go, over how many months? Not so good vibes.
> also give good vibes.
I've heard enough "can't afford the risk of changing jobs" and "current work sucks, but I have to have insurance for my current issues". Honestly it doesn't feel like good vibes, especially with the recent issues on the job market.
Who have you talked to that enjoyed dealing with their insurance provider? Every single provider I’ve had had nightmarishly complicated customer support who couldn’t be trusted to give you accurate information.
Being in Switzerland. I don't mind talking to mine. So far they paid for everything I needed, they are a big company easy to deal with fast in communication which I barely need as doctors usually deal with them their self.
Imagine: I just pick a doctor, make an appointment whenever I need help for anything. They then do everything else and I just pay my monthly fee, that is basically the same for anyone. Zero hassle.
If anyone wondering why it is call 'downcoding', it's because there's WHO ICD coding standard or international classification of diseases now at version 11 or ICD-11 [1]. It's mainly used for classification of disease mortality not morbidity, not until the latest version iteration of ICD-11 in which it now caters for both [2].
Due the usefulness of the diseases classification coding based on ICD, it's also being used in many part of the world especially in US for healthcare insurance claim purposes.
[1] International Classification of Diseases 11th Revision: The global standard for diagnostic health information:
https://icd.who.int/en/
[2] ICD-11 vs. ICD-10 - a review of updates and novelties introduced in the latest version of the WHO International Classification of Diseases:
https://pubmed.ncbi.nlm.nih.gov/32447353/
No, that's completely wrong. Downcoding has nothing to do with ICD versions. This article is talking about changes to the billed HCPCS (including CPT) codes to ones with lower rates. Most US healthcare claims do include at least one ICD-10-CM code to indicate the diagnosis but this is just supporting information. Payers don't change diagnosis codes. ICD-11 isn't used on US claims at all, although it might be adopted in a few years.
Generally here the more important codes would be the CPT codes.
I doubt the insurance company would downcode the diagnosis, just the procedure.
Just to add on, it's called coding because it was, at one point, the act of taking chart notes and turning them into ICD codes.
My pediatrician always charges us for an office visit + preventative care when we go in for a preventative care visit. It's obviously to get more $$ from insurance. I feel like this goes both ways...
Yeah enough gets talked about insurers acting in bad faith, but let’s not forget hospitals also acting in bad faith for their end. Some personal examples:
1. Sitting in a Urgent care. They get you in the exam room. You sit there for 15 mins, doctor comes and sees you for 5 mins (mostly rushes the exam), do a blood draw, ask me to sit around while they run the test, doctor leaves, as soon as 45 mins are over the nurse comes over to let me know it’s taking longer to run the test so I can go home and they’ll call when the results are out. A month later charge thousands of dollars to insurance for a 45 min Urgent Care visit that doesn’t cover the lab work.
2. Go to PCP with cold symptoms that haven’t cleared in 10 days. I insist it’s a sinus infection, they send me back with no antibiotics and ask to schedule and online appointment in 2 days. I insist I come in in person, but they schedule an online appointment anyway. Nothing gets better and I see the doctor online after 2 days, they say I’ll have to come in so that they can evaluate me in person and prescribe antibiotics. I go in person, get antibiotics and get cured. Insurance gets charged for 3 separate hour long visits ($750 each and none of them lasted more than 10 mins).
>I go in person, get antibiotics and get cured.
Or it was viral after all and you cleared it on your own.
Doctors who specialize in this have a hard time accurately distinguishing bacterial infections from viral. There’s no reason to trust your own opinion on the matter. It’s too easy to fool yourself.
If doctors prescribed antibiotics to every person who came in insisting they have a bacterial infection, we’d all be in for a bad time.
> Go to PCP with cold symptoms that haven’t cleared in 10 days
It was a bacterial infection. That was the correct diagnosis. Flu (viral) doesn’t get progressively worse after 10 days and then get better immediately after a couple doses of antibiotics. My symptoms were in line with a sinus infection (I’ve had them before just like I’ve had flu before) and even if they are not able to diagnose correctly after 10 days, there are other tests that can be prescribed that weren’t and there was absolutely no reason to schedule an online appointment when they clearly knew that they’d need an in person check anyway.
There are viruses that can last 2 weeks and mimic bacterial infections.
Most cases of bacterial infection will also clear on their own after 2 weeks.
There are no good noninvasive diagnostic tests to distinguish bacterial sinusitis from viral because is the presence of normal nasal flora.
The standard of care is to consider antibiotic treatment after 2 weeks of symptoms for adults and 3 weeks for children.
There’s a reason for these standards:
As of a few years ago physicians were prescribing antibiotics for 80% of cases of sinusitis. Despite the fact that only about 1%-2% of cases actually needed it.
20% of antibiotic prescriptions in the US are for sinus infections.
This is a massive contributor to antibiotic overprescription, which is why the current criteria is 2 weeks of symptoms.
I don’t know what happened in your online visit, but scheduling an online visit and then if your symptoms persisted past 2 weeks prescribing antibiotics during the the online visit would have been entirely appropriate.
Standard of care for persistent symptoms compatible with acute bacterial rhinosinusitis for more than 10 days IS prescribing antibiotics.
Just asked my wife (ER doctor). She says it's 2 weeks for adults, 3 weeks for kids.
I also confirmed with a MD friend of mine, 10 days or more of worsening symptoms could be indicative of bacterial sinusitis. For adults you can begin the treatment on that diagnosis. You can also start antibiotic treatments before 10 days in certain conditions but it is generally not recommended. Just because a patient shows up on 11th day with worsening symptoms doesn’t mean you have to wait 2 weeks.
Sure. It’s a guideline not a hard rule. Doctors have wide latitude. A doctor could give you antibiotics whenever they want.
The doctor didn’t do anything wrong by asking you to wait a few days.
In addition to residency, my wife is fellowship trained, she’s who PCPs end up sending patients to. She’s basically level 2 tech support (an ENT would be level 3 for this particular problem). She sees the results of this stuff all the time.
And the majority of PCPs vastly overprescribe antibiotics for sinus infections. The vast majority of patients who come in saying they have a sinus infection and asking for antibiotics are wrong.
Doctors are tasked with antibiotic stewardship, but people complain on review sites when they don’t get what they want, so many of them just do it.
An obligation to pay is always good for the billing side. Think about the sociopathic prices of US pharmaceuticals.
Afaik any other country with mandatory health care also puts a ceiling on prices. In germany, there is a price catalog for any service, with only few exceptions, and doctors/hospitals cannot legally charge anything else for these covered services. Now guess what the US does not have, even thought obama had foreign consultants explicitly advising for it.
Health ensureance companies are certainly not the most altruistic but any profit oriented company trying to cut cost where ever possible is hardly a supprise.
> In germany, there is a price catalog for any service, with only few exceptions, and doctors/hospitals cannot legally charge anything else for these covered services. Now guess what the US does not have
Well, we sort of do: we have Medicare's reimbursement rates, which are indeed a price catalog for every service... but only if you're covered by Medicare, of course.
I've heard that price negotiations between private payers and providers are often done with reference to the Medicare rate: "I'll pay you 20% over Medicare for this."
We'll never know, but:
I wonder what would happen if we moved the "medically necessary" requirement burden of proof from the doctor/patient to the insurer. So the insurer would be required to pay out a claim regardless of whether the insurer thought it was medically necessary, but their recourse could be to try to claw it back post-payment.
They'd most likely go bankrupt. There is already an incentive for them to spend on medical care due to the Medical Loss Ratio (MLR) which caps their profits on collected premiums.
If you're saying they need to be forced to pay whatever invoice comes to them and start legal battles for each suspect case then yeah... that doesn't seem feasible.
Health insurance companies are not immediately insolvent because they
1. pay out claims slowly
and/or
2. deny or downcode claims outright?
Really? That to me would imply that doctors/patients are submitting a huge amount of incorrect claims.
Doctors/patients are human too and your proposed system would be ripe for abuse. If you're well versed in submitting claims, and you know they have to pay out, then you could inundate them with fraudulent ones.
> That to me would imply that doctors/patients are submitting a huge amount of incorrect claims
UnitedHealthcare says that 10% of claims go through additional review for various reasons[0].
I don't know if there are stats for the industry as a whole, but my guess is that they deal with a lot of errors.
0: https://www.uhc.com/news-articles/newsroom/how-many-claims-a...
I'm not proposing that all guardrail responsibilities be shifted to the insurer. Just the "medically necessary" provision.
Doctors would still have a Duty to Code Services Accurately and a Duty to Maintain the Medical Record (which would clearly enable an insurer to prove a non-medically necessary therapies). There would be plenty plenty of evidence for an insurer to immediately respond.
So claims could be rejected on the basis of failing to code accurately or lack of record.
What would happen is that costs to self-funded employers would increase so much that many of them would simply stop offering health insurance benefits and choose to pay the tax penalty instead. The only way the current system sort of works is with health plans maintaining strict utilization management.
(In general society would be better off if access to healthcare wasn't tied to employment but that's a separate issue.)
Are you talking overnight? If so, that’s an easy predictable outcome.
If someone invoices me, and I don’t pay the full amount in a timely manner, what do you think will happen? Late fees, reports to credit bureaus, collections agencies hounding me, maybe even lawsuits?
If insurance companies underpay, doctors should treat that no differently. Don’t appeal through the insurance company itself. Imagine I go to a store and pay less than the full amount at the register, and then the grocery store appeals to ME to decide whether I actually should have paid the correct amount. It’s absurd.
Doctors should treat the insurance companies like anyone else who owes them money and isn’t paying in full on time.
Insurers (payers in the industry lingo) simply don’t pay or underpay.
Proving this sucks bc smaller practices have horrible staff turnover, the EMRs are dog shit and the contracts are who knows where and in what format.
Recovery is beyond the scope of most small practices.
Its a nightmare where providers are often shorted millions of dollars and that ends up coming out of the patient’s pocket.
Everyone yammering about upcoding on this thread is blissfully clueless.
> Recovery is beyond the scope of most small practices.
Seems like a business opportunity. Could probably work very similar to other collections agencies where they either buy the debt for pennies on the dollar or take a percentage of the collected amount.
Yeah, there's an industry of companies that insert themselves between the medical record and the insurance company to upcode claims and get better payments. This article is about the reverse process, where the insurance company looks at the claims and downcodes them to send worse payments.
IMHO, in office care should be more of a time and materials billing than billing based on procedures done. Of course, then the doctors' billing office would aggressively measure time the doctor spent, and the insurance company would suggest the doctor took too long for whatever.
It's much easier to treat it like identity theft where the business's problem becomes the customer's problem to solve. In this case, insurance didn't pay what was required so the patient does. There's already a potential collections agency involved if the patient doesn't pay.
Who do you think is easier to squeeze the money from? A mega-insurance corporation or your sick grandma?
Sending your patient's 'debt' to collections promptly is very unpopular with the patients, and the insurance companies will 100% insist that the patient is responsible.
You'll notice the doctor's office in the article already has a team of billing experts. But instead of working on new claims, they are being forced to relitigate claims they already submitted that weren't accepted.
Insurance companies hold tremendous leverage over care providers, up to and including the power to effectively put them out of business on a whim. Care providers don't like picking fights with insurance companies.
Care providers make massively, massively more money than insurance providers.
You can look up Dr. Elizabeth Potter on Youtube who publicly details what its like dealing with insurance, and all the ways insurance screws her and her patients. United Health actively threatened and retaliated against her business when she started getting publicity.
The total industry wide profit numbers aren't relevant at all if you're running a small clinic going up against an insurance provider. Heck even if a single clinic made more money than an insurance provider, it would barely matter - the insurance providers have the power to stop covering your practice and kill it, a clinic does not have any such power over insurance providers.
Or I could just look at the numbers and see that providers make more than 8x what insurers do.
And yet this has absolutely nothing to do with the claim that "Insurance companies hold tremendous leverage over care providers, up to and including the power to effectively put them out of business on a whim.", you're not even engaging with the argument at all.
It doesn't? All the money is going to them, and they're massively larger than the insurers, but it's the insurers with all the leverage? Why isn't more of the money going to the insurers then?
https://nationalhealthspending.org/
Do you make this argument in any other scenario? I'm sure all merchants who accept credit cards combined make WAY more than Visa/MC, but I think most would agree Visa has much more leverage over a corner shop that accepts Visa than the other way around.
There are 5 or 6 big insurance companies, maybe 2000 if we count all of the small ones and 400K medical practices. So even by this very simple money=leverage argument, each individual practice has far less money than the insurance company they are dealing with. So if more money = more leverage then these same numbers prove the opposite claim.
So its probably fair to say that the picture isn't as simple as money=leverage.
If a medical practice and an insurance company get into a dispute and one of them decides to not work together, the practice loses say 1/5th-1/10th of its customers, the insurance company loses 1/100000th of its revenue. I call that leverage.
Care providers also likely spend much more time and labor on making that money than the insurance providers spend making their end, though I only have anecdotal evidence of this through my involvement in healthcare providers’ practices as an MSP.
It's $2.5Tn vs $0.3Tn. It's more than 8x more.
That’s one half of the proportion. What is the time/labor spent?
It depends on the size of the provider organization. In some areas there has been a lot of provider consolidation driven by the need to gain more negotiating power with commercial payers. So we end up with only a few large integrated delivery systems dominating certain regional markets.
Doctors have extensive contracts with insurance companies, and often have employees dedicated to billing. I wouldn't make assumptions here, other than "downcoding" is probably just subtle enough to not be worth it to fight.
I'm 90% certain that submitting claims to an insurer subjects doctors to resolving any disputes via an appeal followed by an arbitration process, and that the right to sue or handle the debt in the regular way is severely attenuated.
So what should happen when Docs lie about what procedures they did? Because it happens quite frequently and for some reason is always left out of these discussions.
Man, it's almost like healthcare and human lives shouldn't be for profit...
You're welcome to come up with an alternative system of aligning interests, so far all of the other ones have failed horrifically.
I live in NL. I pay 130 euros a month for my health insurance, and a max of 375 yearly on deductibles should I accrue some costs. The only reason I pay 130 is because I earn above a certain number, otherwise it's discounted and even free at a certain level (and I opted into the more expensive tier to also have dental coverage). In my case, my employer even pays for my insurance so in reality I don't even pay anything monthly (that's rare here though).
I recently did an in-depth sleep study, got a CPAP machine prescribed to me, free replacement filters and replacement tubes + mask for it whenever I need them. I also got xrays and CT scans because of a foot injury around the same time. I also got comprehensive blood tests done.
None of it cost me a penny other than the ~100 euros a month, the doctors and GPs are paid well, the quality of care I received was exceptional, and in the worst case scenario possible I would've only paid 375 euros max.
My mother in law has osteoporosis and a number of other chronic illnesses, so she has to see specialists quite often. The quality of care she receives is similarly excellent to the one I received, and due to her disability her healthcare is partially covered as well.
It's not perfect of course, but it sure does beat all the horror stories you often hear coming from across the pond of people ending up in lifelong medical debt should, God forbid, something happen to them that they realistically have no control over. So I'm sorry, but I don't buy that the for-profit fucked up system you guys have going on over there is the best of the lot, especially if you're an average Joe and not someone from SV earning obscene amounts.
"Healthcare that isn't for profit" doesn't mean just a national health insurance. Just that as a random citizen you are shielded from seeing all the same issues underneath. The pharma companies, test providers, equipment makers and personnel are all making profits. I bet the total amount paid is higher that 130 euros a month. There's profit all through the system, so claims that healthcare should not be for profit are silly.
Now, what happens is that the profits have to be kept in check, either via price controls or sufficient competition. It's not hard to argue that the choices made in the US are quite suboptimal, but it's far more of a regulatory problem than purely a matter of people making money. If nobody makes money, there's no healthcare.
Not to mention EU pharma makes 50-70% [1] of their money from the US, an unregulated market. I'd challenge them to shut down that 800USD/shot revenue stream and still give subsidised insulin locally and remain profitable. Hint: they can't. Their shareholders would shut them down in a week. Good luck manufacturing the next new drug then.
[1] https://www.novonordisk.com/content/dam/nncorp/global/en/inv... https://www.marketscreener.com/quote/stock/GSK-PLC-9590199/f...
Edit: I too agree the US healthcare system is flawed, I'm just saying you cannot compare it against EU's results without considering the above fact.
Profit is what's left after everyone is paid for their work. No profit doesn't mean nobody gets paid - it means nobody's trying to simultaneously maximize revenue and minimize costs just so they can pay themselves the difference.
Speaking of tax-funded healthcare, did you know that US residents pay more tax towards healthcare than residents of any other country? And in return for that, they don't get any healthcare so they have to pay a second time to buy their healthcare.
> so far all of the other ones have failed horrifically.
Uh, what? Other systems have their problems, but they're varying levels of functional, and the health and life expectancy of the populations in most other developed countries is higher than the US, all the while spending a fraction.
Most other developed countries have a mix of public and private insurance and/or delivery, with the better run systems being better rationalized in dealing with costs and having an actual market where it makes sense to form one (eg you can't practically shop around for ER care, but you can for elective or planable services). The French system is held in high regards in particular (though it isn't really replicatable due to their unique civil service setup).
how about copying the exact thing that works in literally almost every other country in the world
What do you mean failed horrifically? Yes, some countries have long queues. That's because there are actually people getting served. That's just the latency/throughput tradeoff being tilted farther towards throughput - which is what you want, and it's not like people who come in with heart attacks don't get to skip the queue. In America, people get heart attacks and just choose to die so their family won't get bankrupted by an ambulance ride.
Are you possibly getting this information (that healthcare is a horrific failure in every other country) from propaganda sources, instead of information sources?
> so far all of the other ones have failed horrifically.
Have they?
i live in neither country but i know i'd rather have cancer in the UK than the US.
That Breaking Bad meme about Walter getting lung cancer in the UK comes to mind.
The US has higher 5-year survival rates for most types of cancer than the UK. In general the US is the world leader in cancer care.
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Exactly. Glad you agree it shouldn't be for profit, either.
I have no problem with it being for profit. The issue is the alignment of interests and the thumb on the scales by government and vested interests. If health insurance worked like car insurance I think we'd be in a better state.
I wish health care worked like veterinary care. Except, now, veterinary care is becoming more like human health care, and it sucks.
Vets are really the most amazing doctors and I hate to see what is happening to their industry. Hopefully in exchange for dealing with the bullshit of human health care, at least maybe the money is getting a little better for them (a lot of them are just criminally underpaid).
Find some doctors, nurses, researchers, manufacturers etc etc who will work for no money and we can remove money from the problem.
> Find some doctors, nurses, researchers, manufacturers etc etc who will work for no money and we can remove money from the problem.
Not being for profit doesn't mean you don't pay people.
Further, I wonder how the Sixth Amendment works then? So many non-profit people working for... no money?
This "work for no money argument" is so incredibly weak, I had to make sure I quoted the argument so the person wouldn't change it.
Eventually everyone works for profit if they get paid. Spending time only is pure profit in money.
Most people do not profit off their labor. 2/3rds of people are living paycheck to paycheck, which means that they are being paid approximately the same amount that their labor costs to produce. That makes their wages an exchange of equal value, and thus not profitable.
> which means that they are being paid approximately the same amount that their labor costs to produce
No, "living paycheck to paycheck" means you're spending everything you get each month. There can be all sorts of reasons for that.
> That makes their wages an exchange of equal value, and thus not profitable.
This is true for all profit. If you lend me money and profit off the interest, we've decided between us that the time value of that money is worth that interest, and so it's an exchange of equal value.
A reasonable wage or salary isn’t usually considered “profit” in a legal sense. This is why nonprofits can still pay employees. Any money that is left over after costs (including wages/salaries) needs to be reinvested, spent on the organizational mission, or held for future use, not distributed through dividends or other distributions as in a for-profit enterprise.
Have you spent much time looking inside non profits? A lot of hospitals in the US are non profits. Some are part of non profit universities too. This in no way leads to superior cost controls, or those universities being cheap. What it does mean is that they get some significant tax advantages (for instance, no property taxes), and that there's fewer optimization incentives. When you limit yourself to the US definition of a non profit company, it doesn't make care better or cheaper.
Studies have shown both a decrease in care outcomes and higher costs for private hospitals: https://pmc.ncbi.nlm.nih.gov/articles/PMC419772/ https://www.buffalo.edu/news/releases/2002/05/5712.html
> reasonable wage or salary isn’t usually considered “profit” in a legal sense
This is a semantic punt to the word “reasonable.”
The IRS has some guidelines that they use to decide what is “reasonable” but they don’t give out whatever actual formula or process they use to determine this. It’s supposed to be based on industry averages (more or less) but in reality it’s hard to determine what exactly that means. Generally you are “safe” paying in an industry average range, but if outside that range you need legal and accounting support to back up your own assessment.
> you are “safe” paying in an industry average range, but if outside that range you need legal and accounting support to back up your own assessment
What? The IRS doesn’t regulate wages. They just care about getting their money. If I pay you $10bn a year to yell at my cat, the IRS is fine so long as I pay payroll and you income taxes.
Actually as a nonprofit you are required to pay at or below a reasonable wage/salary or you may face sanctions: https://www.nolo.com/legal-encyclopedia/how-determine-reason...
Similarly as an S Corp (maybe other corp types too) then officers must take at or above a reasonable wage/salary to limit the tax advantage: https://www.irs.gov/pub/irs-news/fs-08-25.pdf
This is intended to prevent people from, for instance, setting up a “nonprofit” where they just funnel all gains into their pocket while gaining all the other tax benefits of being a nonprofit. You can’t overpay people, you can’t engage in transactions where you intentionally overpay a supplier for materials/services and then they compensate you for the extra amount, etc.
I'm not saying profit in that sense. I'm just saying that it's monetary profit all the way down when it comes to paid work. People work for profit. People invest for profit. People bet for profit.
The person you were replying to seemed to be discussing profit in the sense of tax law, not whether or not people should be paid at all. I don’t think anyone here is saying that doctors should not be paid.
I was thinking the same thing. Would it be permissible to bring each underpayment to small claims court as a separate case? If enough doctors did this, it would very quickly be a legal DDoS attack, like we've seen happen with mandatory arbitration.
When providers join payer networks they generally waive their right to sue over issues like this.
good luck suing when lawyers cost the doctor 2k/hour and the insurance companies have armies of in house counsel.
It's truly fucked up.
Most insurances won't publish their fee schedules. So doctors don't know what they will pay. So what they do is bill insanely high knowing the insurance will come back with "Nah, we only cover $X". They'll collect $X, then write off the remainder. Because the fear is not getting the maximum money possible. If the doctor would bill $100 and the insurance pays up to $200, then the doctor "lost" $100.
Regardless of how much it actually cost the doctor to provide the service.
It's also why the "cash price" is usually much cheaper, because it's closer to what it costs the doctor to provide the service.
Ah, but this has also lead to many private practices getting bought by hospital groups, at which point they have superior pricing power. The doctor makes more money, and the insurance company pays more, as it's harder to strongarm a company that owns 8 hospitals than a 3 doctor practice. Either way, the price goes up.
Health plans are legally required to publish their rates and they all comply with this now. You can literally just go to any payer web site and download the MRF. There are occasional data errors but overall the numbers are generally accurate.
https://www.cms.gov/priorities/healthplan-price-transparency...
https://github.com/CMSgov/price-transparency-guide
As of 2022, that explains it. It’s been a bit since I’ve worked in the field.
It’s good that it’s changed
Sure but imagine you hire a landscaper and they send you a $40 invoice for $20 of law cutting and $20 of leaf cleanup. You go look outside and see a ton of leafs so you just send them $20.
That's the insurance companies' stance. The work you performed is this and so our agreed upon rate is this.
But in reality, the landscaper bills you for $100, you say you’re only going to pay $90, and then you write them a check for $31.50.
(That’s because you’re a major, well-known insurer and pay an industry high 35%. The guy who mows the Medicare yard might pay 40 cents on the dollar. The person mowing the Medicaid yard has to file 87 forms to get paid his $6.)
Source: I’ve co-owned doctors offices.
but the landscaper has a photo of the clean yard after they finished. They send it to you but you ( as the insurance company) say they need to call a specific time and speak to your 12y/o who is the yard representative of the house.
The 12 y/o say ‘no you stink’ and hangs up. Then you send the landscaper a letter saying ‘sorry your peer to peer was denied’
( I know this is exaggerating a bit and made to sound funny but it mostly works like that in healthcare )
It's pretty obvious to everyone that doctors have been abusing these levels. See doc for 20 minutes for a low complexity item but get charged for a 30 minute medium complexity. The insurance companies aren't blind. They've got the stats in hand for each doctor. I mean some of the ranking data is already built into the portal tools they give consumers for finding a doc.
It's a huge system with a lot of people involved so no doubt there is abuse, but there is also natural and expected levels of variation in the complexity of patients that doctors doing notionally the same job will actually encounter. If you're doing an honest job and happened to have seen more complex patients than average I think you'd rightly be pretty angry if you were then forced to do more paperwork to justify yourself to an insurance company who starts downcoding your patients.
the health insurance industry needs to be razed to the ground and rebuilt from scratch. there's no saving something that is ostensibly designed to help people get healthcare but realistically denies them what they're entitled to for years (in some cases, they just try to keep the ball in the air until the patient dies, then there's no one to appeal) and then once the care is approved steals from the service provider by automatically altering the bills without any evidence of fraud or theft.
If you keep the same regulatory environment then the same industry will arise.
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>Wagner's office estimates he lost over $3,000 to downcoding in the first half of the year, but other doctors across the country have fared far worse.
That's...not a lot of money.
Doctors are probably raising alarms over growing practice. It’s 3000 this year, but becomes 10000 next year and 50000 the year after.
Yep. Frog, boiling water, etc.
If they get away with it for a few offices and a little money, it just becomes how they do business and grows.
I went to the dentist a couple of weeks ago and had the shortest dental visit I've had. They did the X-rays, then the dental assistant spent five minutes cleaning my teeth and pronounced them good. The dentist came in and looked for about one minute and said they were fine. I was sent on my way.
They billed my insurance for over a thousand dollars.
Indeed. Part of the problem is news vendors will only tell one side of the story. If that dentist only billed, say, $150 ($40 per x-ray including time, wear, consumables), $20 for teeth cleaning time, $50 for rent, property rates, taxes, profit) then you'd pay far less in insurance. They all bill more because they can.
I'm on the side of the insurance companies. they are likely the only "responsible adults" keeping providers in check. Providers are extremely wasteful and "creative" with their billing. Staff are generally idle, and staff-to-patient ratios are 10-20:1 if not more. There is little urgency around the clinic, staff take off at 4pm and are impossible to catch on a Friday. Every procedure bills a redundant and pointless "consult"-- a $1500 meeting that could have been an email.
Providers benefit from possibly the best PR of any industry. Insurance companies are the "Ticketmaster" of the healthcare industry. Their entire objective is to be the punching bag for wasteful healthcare providers.
Most doctors don’t do their own billing. It’s too complex. They have specialists who take their notes and turn them into bills.
while you're right most of the billing pressure is likely coming from administrators and boards, doctors do participate with petty / pointless consults , excessive testing & procedures, absurd hour restrictions, and indirectly through medical boards reducing capacity, among other factors
>indirectly through medical boards reducing capacity
My wife has served on government medical advisory boards, and handles resident education. I've heard plenty of virtual meetings in the background. I've never once heard anyone discussing adding requirements for any unnecessary reason whatsoever. Not even a hint anything that would reduce capacity. If anything it's "how can we add capacity without reducing quality?"
>absurd hour restrictions
What do you mean by hour restrictions? The only hour restrictions that are enforced are on Residents and that is 80 hours per week.
If you're talking about doctors choosing to work less than 40 hours per week, that's general because they'll completely burn out. My wife is a pediatric ER doctor, she works less than 40 hours per week, but she has no set schedule and could be working 7a-4p one day, 1p-11p the next, and 10p-7a the next. For many of those shifts she's the only doctor there, and is responsible for the life and death of every single patient that walks through the door. She's the one who gets to tell a young mom that her 3 year old has a brain tumor, she's the one who has to code an already dead 5 year old found face down in a pool victim for an extra 15 minutes so her parents can get there because studies have shown it helps them process grief if they can see people doing everything they can to save their kid. And to top it off any mistake she makes could literally cost us our house because it's relatively common in our state for people to awarded judgements that are larger than malpractice insurance limits.
If she worked 40 hours a week she'd be completely burned out in 6 months.
>excessive testing & procedures
You can 100% blame fear of litigation for that. My wife is constantly balancing her desire to save patient's parent's money with her desire to get answers and her fear of legal liability.
>petty / pointless consults
You can blame fear of litigation for that one too. Calling in a specialist for a consult works the same as testing. It's a balancing act.
I know a lot of doctors, some of them are assholes, but I don't know a single one who even consider changing their treatment recommendations based on how much money it nets them.
I'm sure there is a noble excuse for every one of these problems. But the providers have the most leverage in reducing costs, so they must also accept the blame.
My complaint is two parts really. Providers are wasteful, and policy makers are not able to pressure them to optimize, because of the incredible PR.
In other words, there's no hope to reverse healthcare insolvency because cost growth will continue to explode with this combination.
I mean aside from the fact that insurance in healthcare don’t provide any value at all, and healthcare providers provide, you know, actual healthcare, then sure.
Healthcare insurance companies are completely pointless because healthcare is a human right. All other developed countries have figured this out and provide healthcare universally. We could fully socialize “healthcare insurance companies” and have exactly zero negative repercussions. The only outcome would be eliminating a useless industry and saving ~$500 billion a year.
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For what it's worth, this sort of gaming works both ways.
Many medical administrations do everything they can to upcode in order to bill for more money.
The whole system is a mess.
It's beyond our control, says only country where this happens daily.
IT is beyond our control because we have setup a system where the people who are paying don't want to control things.
My boss wants insurance to be expensive - if I could afford it I would be more willing to quit (retire early).
Finding cheaper services isn't in my interest - I'm not paying any bills anyway.
Insurance companies like the complexity because it means I can't understand the system and so I have to use them.
Doctors don't really care as they just have administrators play the game for them. Once in a while they look at the game and say something, but really this is just they don't understand how the game is played (they shouldn't - they are doctors, they should be looking at medical issues not administrative ones).
Doctors have also spent a lot of time lobbying to make becoming a doctor harder so that the fewer doctors will be able to command better salaries. It sounds like they are attempting to reverse that and open up more spots for residencies but I imagine that there is a lot of momentum to overcome.
There's an old mechanics saying "if X was covered by insurance it'd cost what Y does" where X is some routine thing (tires/brakes/etc) and Y is autobody or glass services typically covered by insurance.
This proverb seems to also apply to health insurance and the things they do/don't cover.
Putting routine stuff under the purview of insurance is stupid regardless of context. There are other cheaper, faster, simpler and more transparent ways of doing that.
Pretty sure fraudulent billing practices exist in a variety of nations and industries.
Other countries are making efforts to keep things in check though https://www.npr.org/2025/01/04/nx-s1-5246231/potential-fraud.... The US for some reason can’t even address blatant fraud. One example is the stuff insurers do with Medicare Advantage. There is fraud and Congress knows about it but besides some hearings nothing is happening.
It does.
And having lived 10 years in Canada and 10 years in the US and used both their healthcare systems quite a bit, I have seen both sides. Let me just say I moved to the US for healthcare 10 years ago and we do not regret it one bit. The US is easy to point and laugh at, but that just comes from ignorance.
Are you wealthy?
But shitting on the US gets you lots of Internet upvotes, and isn’t that the important thing?
It's a system that supports two set of clients, doctors and patients, and fails them both. Yet, Congress has considered it sacred and infallible for a hundred years. Democrat's most earnest attempt ended up strengthening and expanding that system, and Republicans for their part have fought tooth and nail to stack the system even further against the people it's supposed to serve.
Congress has considered that the employees of this industry are wealthy enough to contribute generously and often to their "re-election campaigns." They couldn't care less if your medical bills bankrupt you or not.
This would all be well and good if the doctors weren't also profiteering. When you visit one, you still don't know if their recommendations are good for me or for them. I have seen allergists which are no less slimy than used car salesmen. See also studies on dentists and their varied recommendations for the same patient.
The US insurance system doesn't seem to be giving us low prices, but let's not pretend it's all their fault. It's just a complex market where it's hard to compare providers, and therefore is prone to a lot of inefficiency.
I'd argue the problem is that doctors and insurance companies are two for-profit entities fighting it out for every penny, whereas the people who ultimately pay for the services aren't part of that conversation. If making me an afterthought makes you (the doctor) more money, I become an afterthought (assuming I don't have other options, which most people don't). I can't imagine it working any other way, aside from magical altruism.
The dental industry gets no defense from me as I've been subject to attempts at swindling and coercion more times than I can remember, as if it's standard practice.
What, if any, alternative framework other than single payer could be put into place instead of our current hellscape?
Have health sharing plans been successful? Those require a religious affiliation IIRC.
I exclude single payer solely because it’s impossible with our current leadership.
I’m surprised there isn’t a Costco like medical group that’s nationwide, has a membership, and works solely to provide care efficiently.
The real problem is the billing model we have, where every individual act a clinician performs is separately billable... and separately haggle-able.
One model that has shown promise is "bundled payments." For example, imagine that a certain insurance company switches to a bundled model for childbirth. They say, "we will pay a hospital $X to cover everything related to this patient's childbirth. Maybe it will be a very simple birth and the hospital will make a lot of money on it. Maybe it will be more complex/expensive, and the hospital will make less money. In some rare cases, the hospital will actually lose money."
Why is this a better model? Well, 2 reasons:
1. the hospital has an incentive to provide care efficiently, rather than trying to churn out as many procedures as possible so they can bill more
2. there's just fewer numbers for providers and payers to haggle over
> I’m surprised there isn’t a Costco like medical group that’s nationwide, has a membership, and works solely to provide care efficiently.
What you are describing is an HMO, which hasn't had that much lower costs historically. Theoretically, you pay once and then they take care of you, but in practice costs haven't been that much lower.
Where I live, we have three major hospital chains. Imagine one of them is Kaiser Permanente. My primary care is through Kaiser. When I needed to see a podiatrist to get a toenail removed, they were through Kaiser. When I went to an ER a few years ago for some abdominal pain, it was a Kaiser ER.
It is beyond me why my employer is paying an insurance company anything at this point. Kaiser should be selling me an annual plan where everything at Kaiser is covered, maybe up to a point, and then they have insurance-like network relationships with e.g. other ERs in the area, if you need them, plus out-of-area addons for when I'm traveling.
This is, fundamentally, in Kaiser's interest to sell (again, I don't live near Kaiser Permanente, I'm just using them as an example; every population center has networks of healthcare providers like this). They hate dealing with insurance as much as their patients do. But only recently have these healthcare mega-conglomerates achieved so much monopolistic integration that they could actually do this and people would be interested.
Also, interestingly: My dentist does not accept insurance; direct pay. My eye doctor also does not accept insurance. This is also a new thing; it wasn't long ago that I recall them actually asking for it, but nowadays they just bill directly. It hasn't gotten more expensive (beyond the fact that my employer is paying for useless dental and vision insurance, but at least those are only like $1-$4/paycheck).
Idk, my point is, I think things are changing and will continue to change faster than you might think. I'd love to see government-ran single-payer, but even admitting that is very unlikely to happen on the near term, there's just so much excess, waste, and bureaucracy in the medical system that some kind of short-circuiting direct-to-consumer play, by someone, will happen. Once a major healthcare provider chain can prove that this D2C model works (and it would work), the dominoes will fall.
> It is beyond me why my employer is paying an insurance company anything at this point. Kaiser should be selling me an annual plan where everything at Kaiser is covered, maybe up to a point, and then they have insurance-like network relationships with e.g. other ERs in the area, if you need them, plus out-of-area addons for when I'm traveling.
Well, then you are beholden to Kaiser. Kaiser will not pay for any treatment or medication for weight loss other than gastric bypass surgery. Kaiser will not pay for many medications for mental health, especially for adolescents. Will not pay for medications that could be used for ED, even if not being prescribed for that.
And the most annoying, recently: My partner got a couple of root canals, and was in significant pain and discomfort as you'd expect. Dentist sent her prescriptions for antibiotics and pain management to Kaiser, and we go after her surgery to pick them up at the Kaiser UC/ER hybrid.
No pain meds for you. "We will only fill that through mail order - you'll get it in 5-7 business days". Very helpful for that post-surgical pain now. The irony being that they absolutely had those drugs in stock and available, they were just only for their UC/ER inpatients.
> Kaiser should be selling me an annual plan where everything at Kaiser is covered, maybe up to a point, and then they have insurance-like network relationships with e.g. other ERs in the area, if you need them, plus out-of-area addons for when I'm traveling.
If you’re trying to solve them problem, why on earth do you propose such an expensive, convoluted and strange solution?
Two dozen countTies have solved this. It works very, very well. People pay less and get better outcomes. What more do you want?
What I want is simple: For change to actually happen. You don't need to convince me; your choice is either to convince 100M+ unreasonable people, or make a reasonable path. Direct to consumer billing is that reasonable path; that's why we're seeing it take hold in the dental, vision, and pharmaceutical industries. Core medical is next. Specialty medical will follow. Emergent medicine might never change, but that is absolutely an area where insurance does make logical sense.
The real problem is that the insurance companies will find reasons to charge the same amount even though they have no providers in network.
I don't understand your comment. Kaiser Permanente health plans already work that way. If you go to an out-of-network provider then they can still submit a claim to KP, although prior authorization may be required in some circumstances.
Does your dental insurance not reimburse you? My dentist is also direct pay but submits for reimbursement on my behalf. They get paid up front and I get a check a few weeks later.
For those looking for a fix to US healthcare I think it's something like this:
- (user incentive to reduce cost) insurance is structured as co-pay of [20+]% on all expenses, no exceptions
- (price transparency) require healthcare providers to quote upfront for care, via API/website/phone/in-person. Price paid by anyone is the same except for expenses related to billing. E.g
https://surgerycenterok.com/
- (create competition) enable creation of small scale clinics, testing facilities, and laboratories
And for God's sake, get the government out of it!!
One (social) system that may work well is the South Korean one: private provision of healthcare services; government run insurance scheme with mandatory payments by those that can afford to pay
https://en.wikipedia.org/wiki/Healthcare_in_South_Korea
I love markets, but health insurance really is a tough one given the govt can't seem to let people make their own mistakes on healthcare, so I think it might make sense to make it govt run.
Edit: the thing to acknowledge here is that it probably won't push the frontier of healthcare as much as the current US system does, but at least it would be high quality and affordable (not people's largest or second largest expense item).
You don’t need to attempt something that has never been done before with no guarantee of the outcome.
This is a solved problem in two dozen countries and it’s been working for many, many decades.
>"And for God's sake, get the government out of it!!"
But then you suggest using the South Korean system where the government runs the insurance.
And you say; "so I think it might make sense to make it govt run."
So which is it?
> More than half of societal work is pointless, both large parts of some jobs and five types of entirely pointless jobs:
> Flunkies, ...
> Goons, who act to harm or deceive others on behalf of their employer, or to prevent other goons from doing so, e.g., lobbyists, corporate lawyers, telemarketers, public relations specialists; <-- YOU ARE HERE
> Duct tapers, ...
> Box tickers, ...
> Taskmasters ...
One time I got a test done because my doctor recommended it, but insurance refused to cover it. I spent hours making calls, but no one could give me a clear answer.
That’s when I started to wonder if I was actually getting medical care, or just stuck in a system no one really understands.
Good startup idea would be to work with medical practices to use AI to automate the disputing of the "downcoding" by insurers.
Man this is a hellscape.
I can quickly see something like this turning in an AI arms race between insurance and the provider with each auto-approving/denying/disputing the other. All the while locking out smaller players because they can't afford the 3rd party disputotron.
In fact, you could take out an insurance which will help with the Disputotron costs, should they arise. No you can't know the costs in advance.
I already have a solution to the downcoding practices of these health insurance carriers.
I recently created an application called EMpowerAI that uses AI to analyze clinical notes and assign appropriate billing codes based on medical complexity or documented time. It also can enhance the Assessment/Plan to justify higher billing codes if the note content supports it.
I presented it at the HRX conference in Atlanta on 9/4/2025 in the top 5 abstracts session. Here is the abstract: https://www.heartrhythmopen.com/article/S2666-5018(25)00291-...
As a Cardiac Electrophysiologist, I optimized the application for cardiology and EP, though it is scalable to other specialties. I am looking for beta testers and would appreciate any feedback. Here is a link to the app:
http://em-billing-assistant.onrender.com/
Leave your name and email here if you would like to receive updates:
https://forms.gle/MoVhdna81pq9F45NA
The result will be that doctor AIs will be fighting insurer AIs and the loser will be the patient. As always.
Already working on this, let's connect if you are interested: https://forms.gle/cxQZg5Q27PsT65d97
You would have to leverage the law (if you have one) that involves the state resolving the dispute because otherwise the automated disputes would probably be dropped on the floor. The insurance company has the leverage because they're actually in possession of the money and the contract that gives them stupidly high discretion on how much to pay out.
Doing nothing but flipping the burden, doctors get paid whatever they invoice and insurance have to claw it back would make a lot of this stonewalling bullshit go away. But with an openly corrupt government paid by insurance it'll never happen.
Its a terrible business.
The data is a disaster. Turnover is high, errs everywhere. Disputing is the easy part. Hard part is finding the contracts lol.
The business will be very quickly bought up to kill the product.
If they can afford it. What's Mark Cuban been up to lately?
Edit: in case the reference isn't clear -- https://en.wikipedia.org/wiki/Cost_Plus_Drugs
And I think it is a sad state of affairs when the government has been so villified that we have to depend on billionaires for basic public good works.
> the government has been so villified that we have to depend on billionaires
https://knowyourmeme.com/memes/were-all-trying-to-find-the-g...
Hate it, thanks
Downcoding is listed as a problem.
But who is to say that it should cost $175? What if it really should be $125?
It’s the people and patients caught in the middle
I wonder how this plays out with Kaiser and other integrated practices.
They try to convince you that you're fine and don't need any treatment.
The author lost me in the first sentence calling Deutsche Bahn a well-liked company. I don't know which planet they are from.
I wonder how this sentence ended up with so many commas.
> The problem, doctors say, is that lower and lower reimbursements mean reliable community doctors, like Wagner, could have to make choices that are inherently bad for patients, like cramming more patient visits into a single day to make up for lost revenue, dropping patients on certain insurance plans, or selling their practices altogether.
There need to be more companies solving this from first principles like Yuzu Health.
They have a cool blog at https://yuzu.health/blog that gets into the dynamics of this stuff. Legacy insurance is cooked.
Don't you mean "we" have a cool blog? Looks like you work there.
These sorts of projects always seem to end up with the worst doctors. At the end of the day, seeing a good doctor is all the patient wants.
What would the Austrians say?
All of this happens because so many drink the free market koolaid. Insurance, in general, is glorified paper pushing and legalized gambling.
Yes lobbyists exist but I don’t understand why so many regular people support this broken middle-man system.
Translation: Insurance companies intentionally injecting bugs into their own software to make requests that don't respect user input.
Despicable.
Ah yes, this is a fight between the practices (sometimes not the doctors!) upcoding their visits and the insurance companies wanting to push back and downcode the visits to what they actually entailed.
Healthcare practices want to maximize revenue and push up the “level” of a doctors visit and they can do it with just adding one or two extra little questionnaires or an extra test or two that you might not pay attention to so they can get an extra several hundred dollars a day for billing higher level cases daily.
I never understood why insurers get all the flack while the providers get a pass.
Because the common interaction people have with their insurers is "We are denying this because of <REASON>" which they have to fight to get healthcare.
When a provider rips off an insurer it's invisible to the general public.
Also, incidentally, when people talk about fraud in Medicare/Medicaid, the providers are almost always where that happens (yet that's often not pointed out).
> Because the common interaction people have with their insurers is "We are denying this because of <REASON>"
Of the multiple times my insurance has declined to cover one thing or another, not once have I ever gotten a reason. The claim is just billed to the patient, directly. I'm then left wondering things like "Hey, your plan documentation says 'preventative care is 100% covered'. This was preventative care. Why is it being declined?"
If I want to know, it's an hour of my time, at least, going back & forth with insurance to learn "Oh, '100% covered' … except in these cases."
FWIW I hate most medical billing departments (and hospitals are the worst) about as much as I hate insurance.
They're at least as likely to fuck something up (curiously, always in their favor, not yours) as insurers, from what I've seen. And they're almost as unpleasant to deal with—at least they don't generally keep you on hold for literal hours, but it's still not great.
And one of the ugliest public-facing roles in all of American medicine has to be the insurance-vultures whose job is to hover about emergency rooms pestering very-sick people for their billing information. Fucking gross.
In years of working in the medical industry it is rare for health systems to purposefully upcode a patient's visit (this is taken extremely seriously) while insurers attempting not to pay the bill and sticking it to the patient and health system is standard practice
Because it’s only human nature to complain about the people who aren’t in the room. Insurers are not only absent, they are economically adverse to the two parties making decisions in the room.
Every party at every point in the system is various shades of complicit in fleecing us. That's the magic of the system. It's all divided up in so many ways and so many of the feedback loops touch through the people getting screwed that it's impossible to build a "these guys might not be wholly responsible, but they're responsible enough things will get better if we push them off a cliff or legislate them into poverty or whatever" consensus you need to build to change things
17% of the US GDP is healthcare, now obviously there's a lot of nurses and random courier drivers and all sorts of other stuff in there, but they would all need to take some amount of haircut for us to get fleeced less.
The GDP contribution of slavery was ~13% just preceding the civil war and credible moves (i.e. electing Lincoln) to make them take a haircut caused, you know, the civil war.
There is likely no "clean" way to fix this problem other than a century long frog boiling exercise
You think nurses and couriers are the ones who need to take pay cuts to get healthcare expenses under control??? Lm, and I cannot stress this enough, fao.
The size of the haircut the whole industry needs to take is so large that in all likelihood nobody will be unscathed.
There is immense pressure on insurance companies to lower costs, as they get blamed for the "American health care system". The only one on the side of the payer is the insurance company, they're the only one who wants to keep costs down for the consumer. Given the massive amounts of fraud in government health insurance (medicare) it would of course be prevalent in the private insurance market.
https://www.azcentral.com/story/news/local/arizona-health/20...
“ they're the only one who wants to keep costs down for the consumer.”
They don’t. They want to increase profits by pushing more and more cost to the patient while squeezing providers. The patient is always the loser in this system. One reason is that most patients don’t even have a choice of insurance because their employer picks the insurance that’s best for the employer.
My employer switches insurance carriers every 4 years or so because another carrier has a more competitive rate. "What's best for the employer" is also what's best for me -- I can walk across the street and get a new job if I become unhappy. They want to keep their healthcare costs down so they can keep my salary high as dollars lost to my healthcare compensation are invisible to me.
Except that the insurance plans charge the employer and so the cheaper plans mean more haggling and potentially out of pocket for you later
why dont other countries have similar amounts of healthcare fraud in their single-payer systems?
They do. Billions are lost in Germany every year due to fraud.
As long as providers have an incentive to overtreat and overcharge, I don't see how we can control costs without an adversarial system, as infuriating and dysfunctional as it is. I never had to deal with any of this while enrolled in a nonprofit HMO (there must be some internal adversarial dynamics there, though).
People who have always lived in the USA have no idea how many things about life in the USA are batshit crazy. This is probably the top of the list. At least before we turned to fascism...
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The obvious solution: doctors need to start upcoding their cases by default.
Upcoding for services not actually performed is fraud. Providers who do this may be dropped from the health plan's network, and in extreme cases referred for criminal prosecution.
People get annoyed at insurers who will deny treatment but most of the time you can just pay it yourself. The government has decided that everyone should pay for health insurance but you'll never be denied care if you pay for it yourself.
So if you think you do require some care, just ask the medical practice whether they accept self-pay and then you can decide if it's worth paying or not. If you think it's not, it's unlikely someone else will if they have to pay on your behalf.
Essentially, place yourself in the role of each participant:
- patient: wants to maximize care, money no object since it isn't theirs
- medical practice: wants to maximize money spent on care
- insurer: wants to minimize money spent on care
Normally, the first two would be happy to collude to charge the third any amount of money since they'd both get what they want. And that is indeed what happens. So you get the natural result that the insurer doesn't want to support certain payments even if they were kind and pure-hearted. That they don't want to when they're neither should then not be a surprise.
You can remove that pressure by turning the interaction into:
- patient: wants to maximize care with minimized cost
- practice: wants to minimize care with maximized cost
The pressures between the two parties are now opposite and you can find the market equilibrium. With this opposition you'll suddenly find that patients start complaining about doctors ordering unnecessary procedures and so on, just like insurers claim in the other model.
You can also work through with the other versions to model where equilibrium will set in and see if it's where it does. Most of the time you don't need to assume any moral valence for the participants. They might as well be machines. It is their roles that determine how they act, not their personalities.
>So if you think you do require some care, just ask the medical practice whether they accept self-pay and then you can decide if it's worth paying or not. If you think it's not, it's unlikely someone else will if they have to pay on your behalf.
Ok, hear me out for a minute.
What if I wanted to pool with several people, so that if any of us had unexpected medical needs, it wouldn't bankrupt any of us. Knowing that most of us would not need it.
And then, since we're all on the hook for each other's general health, we also agreed to share the cost of preventative care, because it was literally cheaper for us to all pay for preventative care than to try to just solo it and then hit the group with the cost of terminal cancer care instead of catching it early and doing a small excision. (and other such examples.)
And then what if we made the pool HUGE, to even further spread out the costs?
Sure wish there was a system that just did that, without trying to also generate insane profits off it.
> Sure wish there was a system that just did that, without trying to also generate insane profits off it.
Health insurance companies in the US must pay 80% of premiums to providers. All their overhead (e.g. their accountants and actuaries and so on) comes out of the remaining 20%. What's left is their profit. People have this fantasy that all the money we spend on healthcare is secretly going to greedy insurance companies while doctors struggle to get by. But insurance company profits are a drop in the bucket.
The real villains are the doctors who recommend expensive MRIs and act like it's a complete surprise that the bill they give you is so high. And then go lobby the government to limit their competition. I would love to have a doctor in france look over my radiology and tell me if I have cancer. But that's illegal, I need to hire an American. Coincidentally, the average radiologist in San Francisco makes $660,000/year (about $400/hour).
It's almost as if, then, providers know they can push their rates up, and reimbursement rates go up, since all that means is that premiums go up. And by a stunning coincidence, how much that 20% is goes up.
And then they buy/create PBMs which aren't covered by those limitations, and then force their customers into using them. "Oh, you want a convenient 90 day refill? Sure. If you go through our wholly-owned mail order pharmacy. From your pharmacy? No. You can keep going there every 30 days for your meds."
Their overhead (e.g. their accountants and actuaries and so on) spend a lot of time inserting paperwork and delays in between hospitals and patients, fighting hospital invoices and fighting patient claims, doing marketing, and any profit the insurance company makes is money customers "spent on healthcare" which didn't end up being spent on anyone's healthcare.
> "Health insurance companies in the US must pay 80% of premiums to providers."
How was that figure decided upon, and why isn't it higher? Why isn't it "pay overheads and salaries, and return the rest to the customers"?
The benefits of allowing people to make money by starting businesses are a separate discussion. I only meant to say that insurance companies are already legally prohibited from making "insane profits".
But to answer your question, there are many people looking to invest their time and money into profitable enterprises. Because insurance is a good that is very beneficial for society, we want people to invest in making it a thing. Therefore, we set up a system where the people who invested in its creation get a tiny fraction of the benefit it generates. There are many areas of life where this works great, like providing food and shelter, and I guess it wasn't obvious that insurance would be an exception for some reason.
The actual minimum medical loss ratio is 85% for most large health plans. In practice most of the large payers are at a higher ratio due to competitive pressures. As to how that figure was decided upon, when Congress passed the Affordable Care Act (Obamacare) they just picked a number that seemed reasonable — it wasn't based on a quantitative economic analysis or anything like that.
https://www.cms.gov/marketplace/private-health-insurance/med...
Yes, you can do that. HealthPartners[0] is such a consumer-governed non-profit. It is entirely opt-in. It is not illegal in America to do that and, as you can see, others have done that.
In HealthPartners' case, they do deny claims despite having the structure you mentioned. I think if you wanted to run such a pooled insurance company that advertised that it would pay any and all claims made to it and would deny precisely zero claims, you could and you would find it very easy to onboard both patients and providers to it, at least so long as its fund was solvent.
0: https://en.wikipedia.org/wiki/HealthPartners
There's nothing stopping you from starting your own non-profit health insurance company. If greedy health insurance companies are really the root of the problem, you should be able to out-compete them fairly easily.
You are correct that health insurance companies aren't the problem here. But there are a lot of things stopping you from starting your own non-profit health insurance company. Medical insurance is heavily regulated at the state and federal levels. Launching a new one takes years of work just to get through the paperwork and legal compliance issues.
That assumes the humans will do their best to take care of themselves but given the ability they will be bailed out, they let their health go knowing they don't need to actively take care of themselves.
The outliers drain the coffers
Aren't these basically mutual healthcare providers? We have them in Europe.
How about this one:
- patient: wants to maximize care, money no object since it isn't theirs
- medical practice: wants minimize care since money is based on number of patients not care
- insurer (government): wants to minimize money spent on care while maximizing care because money comes from healthy citizens who pay taxes
There are two differently behaving conforming things in reality of these I think. Both Medicare and the UK/CA NHS in my knowledge conform to your description.
In Medicare, this incentivizes maximizing patients on 'recurring revenue procedures' like dialysis.
In the UK NHS (which I know better), it leads to the government denying certain kinds of care depending on the Adjusted QALYs / pound spent that the intervention will provide.
TANSTAAFL after all, but yes, perhaps the interesting thing about the government being in that model is that patients can control government in a way that they cannot control insurance companies (i.e. they're not strictly oppositional) and consequently when the insurer is the government you get spend-bias in the direction of who has government power. In the US, that turns out to be old people. Additionally, governments have non-health-related sources of revenue so a government health plan can be used as a redistribution mechanism.
But I think it leads to these outcomes predictably with a splitter placed on how much control the government exerts over the practice and how much control the patients exert on the government.
> but you'll never be denied care if you pay for it yourself.
If you can pay. You're still required to have insurance anyways. Which is a regressive tax and harms the people most in need of these services. It's a cruel joke.
Those living paycheck to paycheck are screaming at you right now.
Not true, I've been denied certain tests even though I offered to pay in cash if the doctor thought it wasn't medically necessary.
The problem is that patients are usually not in a position to determine if the care the doctor says is needed is really needed or not. This is the same as taking your out-of-warranty car to the mechanic. How do you know if the mechanic is telling the truth?
Still, this would be better than the current system. Even when you don't know if the doctor is telling the truth you can go by their reputation for telling the truth. Reputations will matter more, and doctors will care about maintaining their reputations in their community.
Reputation is pretty much worthless. Patient reviews are largely based on how nice the doctor seems (bedside manner) and have no correlation with actual clinical outcomes.
That's with today's system not the proposed system.
The proposed system makes no sense. People have no way to accurately determine whether a clinician was telling the truth.
yup. So if you decide you want to have a child, you just get ready to fork out 40-80K for the birth.
Because anyone can afford that, right?
Oh, and by the way, if you are in Texas abortion is illegal. In case you didn't actually __decide__ to get (yourself, your partner) pregnant.
So it's either 40-80K or 40 years. Easy choice.
No one with health insurance pays $40K for a birth. Even for high-deductible health plans the current family out of pocket annual maximum is $21K.
https://www.healthcare.gov/glossary/out-of-pocket-maximum-li...
I'm not trying to defend Texas healthcare policies here but at least get your numbers right.
The ones who can't afford it (<200% federal poverty level) are covered in Texas. Friend who gave birth in Austin, TX talked to other mothers in the ward and one was having her second under that. There's lots of programs that cover this. Abortion should be legal, yes, but you won't be out that amount if you don't make enough.
System seems fine, though I think I'd prefer if we completely subsidized childbirth and 12 months after for all (because those are people who will keep us solvent in the future).