Private enterprise bankrupting America?

[Hawker]

So it once again comes down to someone who wants data vs someone who wants a narrative that makes sense to them. If you are uninterested in the data just say so from the beginning from now on.

By "want data" you mean that you want to discuss the article without reading it.  That hardly seems useful.

[FirstAscent]

So it once again comes down to someone who wants data vs someone who wants a narrative that makes sense to them. If you are uninterested in the data just say so from the beginning from now on.

By "want data" you mean that you want to discuss the article without reading it.  That hardly seems useful.

Hawker, you must understand that bitcoinbitcoin113's research strategy is to scan and search for phrases in documents, so he can parse some special meaning from some particular phrase. I've noted this over and over in the discussion related to climate change. A solid and deep understanding of any topic is often counter to his goals.

[Hawker]

So it once again comes down to someone who wants data vs someone who wants a narrative that makes sense to them. If you are uninterested in the data just say so from the beginning from now on.

By "want data" you mean that you want to discuss the article without reading it.  That hardly seems useful.

Hawker, you must understand that bitcoinbitcoin113's research strategy is to scan and search for phrases in documents, so he can parse some special meaning from some particular phrase. I've noted this over and over in the discussion related to climate change. A solid and deep understanding of any topic is often counter to his goals.

Maybe.  Its a bit of a cheek to ask me to copy paste bits of an article that he is too lazy read.

[bb113]

No, I don't want to discuss the article. I want to discuss the data the discussion found in the article is based on.

So then the question is why are the insurers losing out so much.

This is not answered in the WaPo article. Unless I am missing something that article seems pretty dumb.

"Medical care costs so much in the US because prices are so high."

[Hawker]

No, I don't want to discuss the article. I want to discuss the data the discussion found in the article is based on.

So then the question is why are the insurers losing out so much.

This is not answered in the WaPo article. Unless I am missing something that article seems pretty dumb.

"Medical care costs so much in the US because prices are so high."

Read the article.  Its answered in there. 

[bb113]

I just read it. The answer is not there.

[Hawker]

I just read it. The answer is not there.

I take it you missed this part then:

“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” Anderson says. They do this in one of two ways. In countries such as Canada and Britain, prices are set by the government. In others, such as Germany and Japan, they’re set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail.

In America, Medicare and Medicaid negotiate prices on behalf of their tens of millions of members and, not coincidentally, purchase care at a substantial markdown from the commercial average. But outside that, it’s a free-for-all. Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured.

Really, how hard would it be to have actually read the article instead of childishly saying "I read it but can't find the answer."

[bb113]

That doesn't answer the question. Why are US insurer's at such a disadvantage?

[Hawker]

That doesn't answer the question. Why are US insurer's at such a disadvantage?

Think a little how a small insurer is going to negotiate against a multinational company that has a patented drug the patient needs.  The insurer can't go elsewhere for the drug and can't walk away if it doesn't get a good price.

[bb113]

That makes sense, except some insurer's are pretty huge:

The Blue Cross Blue Shield Association (BCBSA) is a federation of 38 separate health insurance organizations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 99 million Americans

http://en.wikipedia.org/wiki/Blue_Cross_Blue_Shield_Association

[Hawker]

That makes sense, except some insurer's are pretty huge:

The Blue Cross Blue Shield Association (BCBSA) is a federation of 38 separate health insurance organizations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 99 million Americans

http://en.wikipedia.org/wiki/Blue_Cross_Blue_Shield_Association

But they can't walk away.  If they refuse to pay, the patient dies and that sort of defeats the object.

[bb113]

Why can't they walk away (I mean at the point of offering a coverage plan)? In principle, any given insurance company can just refuse to cover certain eventualities they deem non-profitable. This may lose them some business, but that's what actuaries are for.

[Hawker]

Why can't they walk away (I mean at the point of offering a coverage plan)? In principle, any given insurance company can just refuse to cover certain eventualities they deem non-profitable. This may lose them some business, but that's what actuaries are for.

They will lose all their business if they are letting patients die.  People will pay every cent they have for an extra year of life and if 1 company can't offer it, that company will lose market share.

You can picture the adverts now.  "Insure with BigCostly Inc because unlike, SlighlyLessCostly Inc, we won't let you die." 

[bb113]

Why can't they walk away (I mean at the point of offering a coverage plan)? In principle, any given insurance company can just refuse to cover certain eventualities they deem non-profitable. This may lose them some business, but that's what actuaries are for.

They will lose all their business if they are letting patients die.  People will pay every cent they have for an extra year of life and if 1 company can't offer it, that company will lose market share.

You can picture the adverts now.  "Insure with BigCostly Inc because unlike, SlighlyLessCostly Inc, we won't let you die." 

On the face of it this seems true, and it is probably impossible for the average person to make an informed decision regarding which medical care would give the most bang for the buck (hell, most of the time doctors are just making informed guesses). But would people really drain their children's college funds, etc if a doctor told them it would give them a 80% chance to stay alive an extra year?

[Hawker]

Why can't they walk away (I mean at the point of offering a coverage plan)? In principle, any given insurance company can just refuse to cover certain eventualities they deem non-profitable. This may lose them some business, but that's what actuaries are for.

They will lose all their business if they are letting patients die.  People will pay every cent they have for an extra year of life and if 1 company can't offer it, that company will lose market share.

You can picture the adverts now.  "Insure with BigCostly Inc because unlike, SlighlyLessCostly Inc, we won't let you die." 

On the face of it this seems true, and it is probably impossible for the average person to make an informed decision regarding which medical care would give the most bang for the buck (hell, most of the time doctors are just making informed guesses). But would people really drain their children's college funds, etc if a doctor told them it would give them a 80% chance to stay alive an extra year?

The answer is yes but its off topic.  Google "usa medical expense last year of life" for stats if its a subject you are interested in.

The topic is why is private enterprise causing the expense.  As you say, its true that the insurance companies cannot negotiate as their marketing pitch requires them to offer the drugs and the manufacturers have patent protection.

In better run systems, the government sets the price. 

[Rassah]

You're forgetting that, likewise, the drug and medical companies will lose ALL their income on some procedures if insurers chose not to cover it. So both, the insurers AND the medical providers will need to agree on a price. There's also the issue of all insurance companies declining some treatment if they feel it's unnecessary, so all of them let some people die. Finally, if it's just one medical procedure that isn't being offered, like, say, treatment and possible cure for Leukemia, if one insurance company advertises that they cover it while another doesn't, everyone who doesn't have leukemia won't care, and will stay with whatever coverage they had before, but everyone who does have leukemia will flock to this one company, and will likely bankrupt them as they are forced to treat more leukemia patients and raise their premiums to afford it, pushing everyone who doesn't have leukemia out.

[Hawker]

You're forgetting that, likewise, the drug and medical companies will lose ALL their income on some procedures if insurers chose not to cover it. ...snip...

That's the point.  They don't lose a cent.  The patient has to have the drug.  If the insurer can't get it, the patient will sell his house.  The drug company charges people buying without insurance even more so they win no matter what.

That's why the vendors are on 25% margin. 

[Rassah]

if that's the case, then the ONLY option is government mandated prices, but that will very likely result in shortages; everyone can afford it, but it's not available because no one wants to make it. I just don't see how this can happen without going outside the bounds of market laws.Maybe if the goverment makes it using government owned factories and sells it only within the country borders...

[bb113]

In the US, the average cost per person is $7k/year, but look at the distribution of that cost:


http://www.ahrq.gov/research/ria19/expendria.htm

[Hawker]

if that's the case, then the ONLY option is government mandated prices, but that will very likely result in shortages; everyone can afford it, but it's not available because no one wants to make it. I just don't see how this can happen without going outside the bounds of market laws.Maybe if the goverment makes it using government owned factories and sells it only within the country borders...

Correct.  National mandated prices are the only rational option.  Its the normal way of doing things in all advanced economies.

Oddly, the only country where the shortages that worry you occur is the USA.  And now you have looked at the economic incentives, you know why the US has drug shortages and other countries do not.