Originally Posted By: sini
#1



You are confusing two different issues here.

Ideally insurance wants to operate by providing coverage for any and all conditions, with minimum co-pays and deductibles and at the same time denying every single claim. This is rough model to maximize profit in ideal (to them) business environment.

We are not talking about denying claims here. We are talking about coverage. Coverage that insurance competes on. As such, I still stand by my assertion that chasing latest-and-greatest regardless of cost-effectiveness is forced on insurances by customer demands. This is mostly because customers are detached from individual purchasing decisions.



No, though they also deny claims- insurance companies often negotiate pricing.

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If you are paying directly, and in position to pay outright before the treatment, then yes, prices could be negotiated. Otherwise, not so much. Often times, the fact that you have insurance, even if they denied or only partially cover the treatment, locks you into inflated price due to how contracts for 'preferred provider' operate.

Anecdote - couple years back I had to get a treatment done. Insurance would only cover 50%. Doctor was not able to go down on the price as long as insurance paid any part of it. I negotiated direct payment deal that ended up saving me money over insurance coverage.


Here is where it gets complicated. It depends on the nature of the ailment, the medical institution in question, what govt policy is regarding the ailment (ex: if there is a possiblity of govt picking up the tab if patient does not have insurance able to cover cost). In your case, while I have no idea what your ailment was (or need to know) , since you have indicated you are a high income individual - the health provider likely had a policy of not negotiating the price where insurance covered part because a lower income individual would have been able to have govt pick up the remainder of the cost.

Also, additionally it can also partially reflect the overall costs of doing business with govt. A dollar in hand better than 10 in the future and all.. knowing when and how much you will actually get paid carries a value as well. Especially when compared to govt payouts, which the medical facility probably institutionally expects during the majority of those cases - and hence writes policy around it.

I have a similar anecdote, where costs were entirely negotiated based on the amount of insurance payout available.

So, it just depends. In most cases its the govt that makes it complicated, though you can also find bureaucratic inefficiency and general human error on the part of providers as well.

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There is no reason a person, often in conjunction with their primary care physician, should not be able and expected to make educated decisions regarding both insurance, and health options.


You can't claim this. Cost of individual coverage reserved to well-off and healthy. Majority of people are at the mercy of employer-provided health insurance plan. Your only choice is to opt in or opt out. As such, given that you are on the plan and have no choice about what this plan is, it is natural to consume up to the maximum within limitations of this plan and your personal health situation.


Sure I can claim this. Especially if we add in tax deduction for individual insurance purchases. Nixon just screwed the pooch with his HMO laws. People just got used to the idea of employer provided health insurance, because at the time employers thought it sounded like a good recruitment/retention tool because instead of paying $X more to employee to support insurance purchase, they could spend $X instead on insurance directly and recieve tax deduction.

It became so widespread, that some people have come to the mistaken conclusion that this is somehow the natural order of things - and how things should be. It isnt. Falling incidence of employer provided health is just a byproduct of falling real wages in general - and needs to be addressed with the wages issue, not with the health issue.

Just put individuals on the same tax terms as companies, and see people start demanding additional monetary compensation and pursuing their own health plans.


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If we step back, and look at the entire picture - from a birds eye perspective of society as a whole, it should be clear that using private insurance as a delivery means for social services is silly.


I agree. This why I see single-payer as an improvement over existing system. I also think that pure market driven system will happen to be improvement over status-quo (if you only consider monetary costs and ignore human costs).


The human costs would be negative in terms of USA living standards - as in would be reduced in a free society. Simply opening up reimporting of patented items would serve as a huge boost to cost competitiveness as well. Companies wouldnt be able to overcharge us in the USA while low balling the cost to poorer parts of the world. Of course, prices would rise for people in poorer parts of the world - but my aim is not to subsidize the rest of the world, but rather to keep the USA sane.

In a single payer world with no market mechanism, it become impossible to calculate relative value. How much should a hip replacement cost? How much should a new drug cost? How much should phsyical therapy cost? Bureaucrats , no, any humans, are incapable of determining this.


For who could be free when every other man's humour might domineer over him? - John Locke (2nd Treatise, sect 57)