LogFAQs > #931100395

emblem boy posted...

Surely there has to be a way right?

in theory the total cost of care probably can't be changed

rather, the distribution of who's paying, and how that payment is provided, is what has to change. there's a lot of money lost in that section of it, and in particular the way our current system works basically subsidizes those who least need assistance by making employer contributions for employee insurance tax deductible (this pays for something like a third of all private insurance on its own, and leads to situations where young healthy people have ultra-high quality coverage that they don't need but have no reason not to take since it's free/nearly free for them, but costs the employer+government a ton).

providers lose money on anyone who defaults, which is a lot of people, so they have to charge as much as possible for their services to make up that loss, and they do it to the insurers that are least able to negotiate with them

private insurers have to make a profit, first and foremost, but since they can't negotiate to pay the exact cost of care, the ones that cover fewer people will inherently have to pay more for the same services as the ones that cover more people. because patient defaults produce operational shocks that can break a business entirely, the net cost of services passed to payers winds up being quite a lot more than it would be if there were zero risk of nonpayment--operating with short term debts costs quite a bit more than operating in the black all the time would. paying that plus overhead sets the cost for an insurer to even operate, then they have to make a profit.

even public insurers like medicaid or the state exchanges have this problem with negotiating power and price increases to cover defaulter costs. and since they're opt-in or income restricted, the defaults continue.

single payer nonprofit would remove the defaulter issue entirely and also be able to negotiate down to the lowest price per service that the provider could accept. and by operating through a tax, the cost would be shifted to sections of the population more able to pay (realistically, it'd probably be a cost increase to the upper middle class but a cost decrease to most others)

konokonohamaru posted...

their profit margins are small because of how expensive the doctors, the equipment, and the drugs all are.

the doctors and equipment are expensive for basic market reasons and it's pretty hard to get around this.

the drugs are another story but they're not really the main cost driver for providers.

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