Why (health) insurance companies must go

[werepossum]

they took a baseball-sized piece out and didnt even give me anything to replace it with!

unfortunately it was word memory too... my pomes would probably be twice as good if i still had a whole brain :\

No Robocop? That sucks.

She's not in the right age range for one and her supplemental deductible is too high for the other.

It's the insurance companies that set these restrictions.

Nope, it's the doctors who set the restrictions. Doctors with established practices and/or very expensive overhead don't accept the lower-paying types of insurance because they are below break-even. Doctors just starting out usually don't have that luxury, so they take a corporate job rather than establishing a private practice. I've seen it with my own. Our HSA policy skyrocketed when it became Obamacare-compliant, far beyond what our company could afford, so we had to step down to a cheaper plan. That plan simply covers less AND pays providers less. Consequently it is accepted by fewer doctors. I was fortunate that all my doctors except one accept it for existing patients, but every one of those has posted signs that they do not accept new patients with that insurance.

Nonetheless, I agree with your conclusion than insurance companies need to go. Obamacare's obvious aim is to drive them out of business, and people like me are going to be crushed in that struggle. As for health care providers, they'll simply have to adjust to less income. Older doctors will retire as it's not worth their time. It will remain a well-paid field, it just won't attract the very brightest as it does now. Those people can move into law, to make the big bucks suing doctors. lol

 

[jhu]

I'm in business school and we actually learned about insurance effects on pricing of medical procedures in my basic econ class. They used the example of appendectomies vs. breast augmentations (in non post-mastectomy cases). The latter's price has increased about 20% over the past twenty years. For appendectomies it was like a 120% increase.

Two issues here.

1) Appendicectomies are usually not elective.
2) Breast augmentation, being fee for service, the surgeon gets paid money now vs. appendicetomies, which not only pay much less, but then require dealing with insurance companies.

 

[Craig234]

bradly, you're right. The purpose of health insurance companies is to make money. They don't really add value, they add cost and bureaucracy.

Why do we put up with it? Because like many things, they spent the money to buy Congress and protect their interests against the public interest.

Back when laws were passed that would have help, health insurance was given an exemption - at the time it was a small industry, no idea the effect it would have.

 

[poofyhairguy]

The thing is is that with insurance companies in control there's so much more unnecessary overhead. I think that's a big part of the reason health-care is so outrageous

Obama campaigned on having a 'government option' that would presumably bypass high profits, but he later lied and when it came down to negotiating the bill with the powerful insurance lobby he said he never campaigned on that. I saw it right there on his website during the Democratic primaries.

The government option exists, it is called Medicaid.

 

[poofyhairguy]

As for health care providers, they'll simply have to adjust to less income. Older doctors will retire as it's not worth their time. It will remain a well-paid field, it just won't attract the very brightest as it does now. Those people can move into law, to make the big bucks suing doctors. lol

I don't see that happening. The number of doctors is so locked down, and the costs of med school are so locked in, that the sheer number of baby boomers alone will keep them afloat. The government will try to cut their rates, and doctors will push back by leaning on those boomers more (aka less Medicaid and more concierge services). There is no incentive to play ball with a bureaucrat wanting to cut your pay.

The only way I see doctors taking a huge pay cut is if the government gets so desperate for Medicare/Medicaid coverage that they tie acceptance to licensing. At that point doctors become super sized social workers.

What is much more likely than that, given the power of the AMA, is that Americans will have to get used to getting care from PAs and nurses. These groups have less labor controls, which means they are the perfect place to squeeze margin out of the system.

 

[Muse]

I'm helping a friend navigate her healthcare, and the obstacles that keep getting in the way are the insurance companies. Short version: her doctor only accepts two insurance plans. We've been trying to apply, but she doesn't meet the requirements of either plan, which will force her to lose her doc.

I understand their requirements are to keep costs down in deference to the shareholders but in doing so they have created a system of 'locked down' providers and facilities. In universal healthcare systems you can go to any doctor anywhere and be fully covered. Those systems are paid for via taxes which have the ability to capture enough money from everyone and if you can afford more expensive things, you pay more into the system.

Insurance companies only exist to make money, they have no other function in the process of providing healthcare, and they rake it in. Why do we put up with these middlemen? And why is 'taxes' such a dirty word? We all saw how the creators of Obamacare avoided naming any of it 'taxation.'

Obamacare wasn't universal coverage, it just forced people to get insurance plans, making them provide permanent profitability for these useless and costly (in many ways) companies.

We failed.

Edit: added '(health)' to title

You could see this coming. The reason it happened is that the insurance companies are huge, have gigantic war chests and can afford to lobby and endorse and finance politicians (contribute bigtime to their campaigns) who will look out for their interests. Yes, the insurance companies are middlemen, unnecessary middlemen, but getting that recognized and acted upon in America is difficult. I have figured from the beginning, when Obama and the Democrats began their big campaign to institute universal healthcare in some fashion that the insurance companies were going to resist, or at least insist that they remained in the equation. I also figured that things would change, probably change a lot before the dust settled, and it has NOT settled, I didn't expect it to settle, and there are going to be changes.

Maybe at some point they will do away with the insurance companies in the health care arena. I think the logic says that should be where we're going, but it won't be easy to get there, there may be many rivers to cross.

 

[Engineer]

No heart or brain surgery?!

Nah, just do that stuff overseas where it's cheap enough to pay out of pocket (as has been a growing trend -not only by regular consumers but by insurance companies too).

 

[smackababy]

You could see this coming. The reason it happened is that the insurance companies are huge, have gigantic war chests and can afford to lobby and endorse and finance politicians (contribute bigtime to their campaigns) who will look out for their interests. Yes, the insurance companies are middlemen, unnecessary middlemen, but getting that recognized and acted upon in America is difficult. I have figured from the beginning, when Obama and the Democrats began their big campaign to institute universal healthcare in some fashion that the insurance companies were going to resist, or at least insist that they remained in the equation. I also figured that things would change, probably change a lot before the dust settled, and it has NOT settled, I didn't expect it to settle, and there are going to be changes.

Maybe at some point they will do away with the insurance companies in the health care arena. I think the logic says that should be where we're going, but it won't be easy to get there, there may be many rivers to cross.

Insurance companies aren't middlemen, in the way the word is normally used. A car salesman is a middleman. Insurance companies aren't buying goods and reselling them to consumers. They are providing a service that will cover a large portion of the costs of medical care, should the need arise. It allows someone to make reasonable (in most cases) payments on a monthly, quarterly, yearly, whatever basis for a fraction of the cost of most medical procedures. Is the cost of medical care inflated? Sure. But, would a race to the bottom to have the most bargain care be something we should strive for? Certainly not. We already see this in cosmetic surgery. Wonder why there are so many awful looking boob jobs? Because, for most people, paying $1000 is better than $10000, and you get exactly what you pay for.

Health insurance is a need just like car insurance. Cars are sold freely in the market, yet most are more expensive than the majority of people can afford to put down in a single payment. So, we have lenders that are willing to lend (some) of us the money to make this large payments and they require some kind of way to recoup their money in the event the car is destroyed.

 

[xeemzor]

Insurance companies aren't middlemen, in the way the word is normally used. A car salesman is a middleman. Insurance companies aren't buying goods and reselling them to consumers. They are providing a service that will cover a large portion of the costs of medical care, should the need arise. It allows someone to make reasonable (in most cases) payments on a monthly, quarterly, yearly, whatever basis for a fraction of the cost of most medical procedures. Is the cost of medical care inflated? Sure. But, would a race to the bottom to have the most bargain care be something we should strive for? Certainly not. We already see this in cosmetic surgery. Wonder why there are so many awful looking boob jobs? Because, for most people, paying $1000 is better than $10000, and you get exactly what you pay for.

Health insurance is a need just like car insurance. Cars are sold freely in the market, yet most are more expensive than the majority of people can afford to put down in a single payment. So, we have lenders that are willing to lend (some) of us the money to make this large payments and they require some kind of way to recoup their money in the event the car is destroyed.

Health insurance companies aren't as big of an issue as the large health systems. The amount of waste and absurd administrative salaries is just insane. They act in irrational ways because of a lack of competition and the need to maintain a non-for profit image. Why is it that every health system claims to be losing money and yet is continually building out and acquiring new facilities? For the past 4 years much of the commercial developments in Chicago has come for medical centers even though the market is one of the most saturated in the country.

Innovators like Mobile Anesthesiologists have figured out how to bypass health systems by packaging mobile anesthesia units for physician offices. Physicians using their services are able to dramatically increase the amount of procedures that can performed outside a traditional ASC/Hospital settings. This translates to a roughly 1/6th cost savings over going to a traditional hospital, even when using traditional payer networks.

Doctors need to wake up and realize that they are being used. New models are coming out that fix a lot of issues but they need to be willing to take risk.

 

[halik]

My cell phone plan doesn't have unlimited data and I want unlimited data, but I don't want to pay extra on top of my plan. Therefore a government solution is needed.

Here's a clue: first world problems like the one described can always be solved with (your) money.

Insurance companies aren't middle men, anyone that claim that doesn't understand economics. Insurance is simply a risk pool.

 

[brianmanahan]

Nah, just do that stuff overseas where it's cheap enough to pay out of pocket (as has been a growing trend -not only by regular consumers but by insurance companies too).

i would not have wanted to outsource my brain surgery

 

[xeemzor]

My cell phone plan doesn't have unlimited data and I want unlimited data, but I don't want to pay extra on top of my plan. Therefore a government solution is needed.


Insurance companies aren't middle men, anyone that claim that doesn't understand economics. Insurance is simply a risk pool.

In theory you would be correct. However, the market has been significantly distorted so that health insurance is much more than just a risk pool. I would recommend that you look into PPO repricing as a start.

 

[SunnyD]

Oklahoma county has already saved thousands.

I'm going to ignore most of what you said because it's flawed on several levels, but I don't want to take the time to address it. I just want to poke fun at this one little bit.



Thousands!!! Heh... a county has saved thousands Jerry!!!

Wake me when a county has saved tens of millions and then we'll be talking.

 

[xeemzor]

I'm going to ignore most of what you said because it's flawed on several levels, but I don't want to take the time to address it. I just want to poke fun at this one little bit.



Thousands!!! Heh... a county has saved thousands Jerry!!!

Wake me when a county has saved tens of millions and then we'll be talking.

They saved $573,000 in 5 months and are on track to save millions this year. But hey, feel free to ignore away.

 

[Slew Foot]

http://www.nytimes.com/2014/05/18/sunday-review/doctors-salaries-are-not-the-big-cost.html

has a nice graph in the middle that for some reason i cant link. Shows how badly admin costs are screwing you.

 

[smackababy]

http://www.nytimes.com/2014/05/18/sunday-review/doctors-salaries-are-not-the-big-cost.html

has a nice graph in the middle that for some reason i cant link. Shows how badly admin costs are screwing you.

Do you have any data to support this is exclusive to the insurance industry? Looks like business as usual for US corporations to me.

 

[JMapleton]

http://www.nytimes.com/2014/05/18/sunday-review/doctors-salaries-are-not-the-big-cost.html

has a nice graph in the middle that for some reason i cant link. Shows how badly admin costs are screwing you.

If they are only paying the CEOs of insurance companies $500k a year, that is a steal.

Are you another one of those guys who think CEOs should make $150k, tops? Give the class warfare a rest.

$500k is a pittance to run a multibillion dollar insurance company when Lebron James can make $60m a year.

 

[smackababy]

Lebron James makes like $20 million a year playing basketball. His shoe contract with Nike was 7 years $90 million. So, unless he makes an additional $28 million from Sprite and whoever else, he isn't make $60 million a year.

But, your point that the CEO only making $500k is on point. Executives, in the US at least, make money to run companies.

 

[JMapleton]

Lebron James makes like $20 million a year playing basketball. His shoe contract with Nike was 7 years $90 million. So, unless he makes an additional $28 million from Sprite and whoever else, he isn't make $60 million a year.

But, your point that the CEO only making $500k is on point. Executives, in the US at least, make money to run companies.

That was his old contract shoe contract. Durant is getting $20m from his new Nike contract, Lebron has to at least be getting $30. Jordan gets 80-90m.

And my mistake, he makes $70 million. But I've never once heard anyone complain about how much he makes, if that's what Slew Foot is implying.

http://www.forbes.com/profile/lebron-james/

Kobe makes $60. Mayweather made over $100m.

http://www.forbes.com/athletes/list/

I don't hear anyone complaining about them.

 

[smackababy]

I didn't think they renewed his contract for that much.

He still hasn't learned from Jordan. Trademark your likeness! Jordan still gets paid for every Jordan brand product sold.

 

[JMapleton]

I didn't think they renewed his contract for that much.

I'd bet anything they did. It was reported Durant got $20m a year for 10 years and Rose got a $200m lifetime contract. No way Lebron, who outsells both Durant and Rose combined in shoes, wouldn't get at least $30m.

 

[Slew Foot]

If they are only paying the CEOs of insurance companies $500k a year, that is a steal.

Are you another one of those guys who think CEOs should make $150k, tops? Give the class warfare a rest.

$500k is a pittance to run a multibillion dollar insurance company when Lebron James can make $60m a year.

People were wondering why health care costs so much more here than in other countries, I put up one of the reasons, that is all.

 

[JMapleton]

People were wondering why health care costs so much more here than in other countries, I put up one of the reasons, that is all.

One guy's $500k salary does not effect the billions and billions of dollars in healthcare claims. That's like saying one man peeing in the ocean is killing off the sea turtles.

You just see a big number (it's actually not that big) and react emotionally. For most people $500k a year is a lot of money. I would guess Anand was making more than that with this website when he owned it. That's not a lot of money.

 

[smackababy]

One guy's $500k salary does not effect the billions and billions of dollars in healthcare claims. That's like saying one man peeing in the ocean is killing off the sea turtles.

You just see a big number (it's actually not that big) and react emotionally. For most people $500k a year is a lot of money. I would guess Anand was making more than that with this website when he owned it. That's not a lot of money.

A quick Google search turned this up: Forbes speaking on average fortune 500 company CEO pay "Forbes magazine reported that the average total compensation for a Fortune 500 CEO as of the 2012 Fortune survey was $10.5 million. This broke down as $3.5 million in salary and bonus, $3.8 million in other compensation such as personal perk packages and $3.2 million from exercising vested stock options and awards. The combined compensation for the 500 CEOs was $5.2 billion."

Yeah, $500k is pennies in terms of CEO compensation.

I'd bet anything they did. It was reported Durant got $20m a year for 10 years and Rose got a $200m lifetime contract. No way Lebron, who outsells both Durant and Rose combined in shoes, wouldn't get at least $30m.

And the top selling basketball shoes year after year are still Jordan brand. >_> Lebron just don't have what it takes.

 

[Jeff7]

If they are only paying the CEOs of insurance companies $500k a year, that is a steal.

Are you another one of those guys who think CEOs should make $150k, tops? Give the class warfare a rest.

$500k is a pittance to run a multibillion dollar insurance company when Lebron James can make $60m a year.

They just keep making more and more while the wages of the people they manage have pretty well stayed put despite large increases in productivity.

So you get things like "Profitability this year was higher than it's ever been in the company's history. Yes, I received a substantial bonus and pay increase. Unfortunately, there's nothing available for anything more than a 1% raise for any of you this year; it just wasn't in the budget. But please, do continue to work harder next year so that I can get an even more substantial paycheck."