> "Higher markups can also result in larger internal transfer payments from health plans to affiliated pharmacies, which may allow vertically integrated PBM-pharmacy-insurer entities to retain revenue and profits while formally satisfying the insurers' medical loss ratio ("MLR" ) requirements, but without providing the clinical care and quality improvements that the MLR rule seeks to promote. In addition, higher markups can result in significant patient cost sharing requirements because reimbursement rates are often correlated with point-of-sale prices, which can influence how much patients are required to pay."
In other words. Health insurance firms have capped profits in the US. But in this case one conglomerate can own both an insurer and a PBM, so it can just overcharge consumers for insurance and then launder its profits through the PBM.
It’s worse in practice than any system adopted by any peer nation regardless of the wide range of differing approaches to providing universal coverage.
Treating it as some uniquely complicated problem is deceptive. It’s broken because that keeps certain people wealthy and gives employers control over labor.
Most insightful comment in this thread. THIS is the crux of the issue, and we've allowed the likes of UHC to buy PBMs and other pieces of the supply chain / customer lifecycle because UHC lobbyists claim it would reduce costs across the board and also improve efficiency. Load of absolute bullshit obviously but here we are.
Is it the case that UnitedHealth and Cigna each own (or control) one of the "big three" PBMs? If so, that is a just crazy - the control insurance premium pricing, benefit decisions, AND the pricing of covered medications?
yadaebo wrote below "Medical Loss Ratio (MLR) is capped at 85% in the US which means 85% of revenue must go to patients". Does controlling a big PBM allow an insurance company a loophole?
>UHC is the largest single employer of doctors in the US.
https://www.statnews.com/2024/07/25/united-health-group-medi...
> It’s no secret that UnitedHealth is a colossus: It’s the country’s largest health insurer and the fourth-largest company of any type by revenue, just behind Apple. And thanks to a series of stealthy deals, almost 1 in 10 U.S. doctors — some 90,000 clinicians — now either work for UnitedHealth or are under its influence, more than any major clinic chain or hospital system.
>They purchase physician groups... and then pay themselves higher rates.
https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...
> UnitedHealth Group is paying many of its own physician practices significantly more than it pays other doctor groups in the same markets for similar services, undermining competition and driving up costs for consumers and businesses, a STAT investigation reveals.
UnitedHealth Group is hardly unique in this regard. They're the largest but all the major commercial payers (including the non-profit ones) are pursuing similar strategies. Essentially they're copying the existing Kaiser-Permanente model of having a payer and provider organization under one roof.
I'm not defending this system, just explaining why the current structure exists. Any major improvements will require an Act of Congress to better align the incentives with the interests of patients / consumers / taxpayers.
…except you skipped over the part where UHC billed at higher rates for the clinics they own so they could screw customers with premium hikes, take a bigger percentage of of the inflated bills, as well as profit from whatever costs they didn’t cover and people were forced to pay.
Isn't this clearly in need of trust bust?
At it's core, details are not really needed to show how atrociously inequitable the system is.
I do not like UnitedHealth, I do not like our existing crop of health insurance executives, and I might even be viscerally glad at some level that the UnitedHealth CEO was killed in a world where justice clearly takes a back seat to greed, but I wish the headline didn't say "overcharged", because there's no established amount of markup that is the correct amount of markup other than what people end up paying. Is that shitty? Yes. Does it violate a social contract? I think so. But tell me how much the right amount to charge is first. Is that cost? Cost+percentage? They've chosen their percentage. What's the correct one instead?
The article body presents the story in a more meaningful way, "UnitedHealth Group is charging patients a markup for key life-saving drugs that could easily exceed their cost by a factor of ten or more".
I don't know if I can give them the benefit of the doubt on the cancer drugs because of this.
As an European, this is mind boggling.
So it's at least plausible that they're abusing their position as the company that owns the pharmacy and the insurance plan to charge you a lot of money and provide very little coverage and also to gouge you at the very end of your coverage, because that's exactly what they did to my partner and I.
Is that clear enough for you?
1) I don't know what Medicaid pays.
2) I don't know that what Medicaid pays is a just price until we define what a just price is on its own merits. Maybe Medicaid pays more than they should.
3) What Medicaid pays could change at any time for any reason unless what Medicaid pays is based itself on some metrics that define otherwise, in which case let's just look at those metrics directly, yes?
4) If Medicaid decides to pay more, is that the new line?
2. If anything, it's a bit stingy. The negotiating power of government (and the predictability of it) helps keep reimbursements down here.
3. I mean, that's how they're set. They analyze how long and how much a particular procedure should take/cost.
4. Sure.
The negotiating power
I $truggle to think how $omething like thi$ wa$ allowed to happen.
Bastards.
This is the most absurd set of words I've read in a while.
I agree that more reform and enforcement is needed in the healthcare industry but let's at least get the facts and history right.
I have no idea what the correct margin for essential cancer drugs is. I don’t think it should be a 10x markup. Intuitively, it seems that there’s something wrong with price gouging dying cancer patients. If you have an argument why my intuition is wrong, please share it.
If you want to be quantitative of course you do. How hard is it? Margin of error is allowed. If you want to be qualitative, vague and wishy washy, that has its place too, but at some point someone is going to ask for a quantitative assertion, otherwise you get nowhere.
Just as the user of an App doesn't need to provide an alternative design when they say "this App sucks", the average user of healthcare likewise has no obligation to redesign the healthcare system when they say "this healthcare system sucks."
To be honest, I'm quite surprised you're siding with the provider here. Are you personally satisfied with healthcare pricing in the United States? Do you not share my intuition that in general, healthcare is too expensive and inefficient?
https://www.cms.gov/priorities/key-initiatives/healthplan-pr...
https://www.cms.gov/priorities/key-initiatives/hospital-pric...
https://www.dolthub.com/blog/2023-03-23-illusion-of-transpar...
> Humana published their MRFs across 11,000,000 different files, then rate-limited how fast you could download them
HN discussion: https://news.ycombinator.com/item?id=35347647
Maybe. The article also asserts their data, where available, is often also wrong. See the section titled "Cross checking with hospital data".
It is apples and oranges, though. Because 1) apps are hardly a critical need for the populace and 2) software margins are even more difficult to find that "line" to than physical resources.
I'm sure that medicine needs some higher than average markup in order to make up for R&D, ingredients, and various regulations to get it approved for human patients. But very unlikely 1000%. And only 1000% because of questionable vertical integration that lets UHC charge UHC however much it wants to itself.
We don't need to find the touchdown line when we're already outside of the stadium and the parking lot anyway.
So let's talk about it and think about it and form an idea. There's no universally right or wrong answer, but you should at least be able to decide what answer is right to you.
> I don’t think it should be a 10x markup.
What about 1x markup?
> Intuitively, it seems that there’s something wrong with price gouging
There is, but you're relying on the word "gouging", and without identifying what price you think is gouging vs reasonable profit, stopping at the point where you express that "too much is too much" doesn't get us any closer to having actionable goals.
----
But to go along with your exercise, I take a look at current market dynamics and compare it from there. Apparently, the typical wholesale markup is 20-40%, and stores will typically markup another 20-50% on top of that. So we're talking roughly a 125% markup on the higher ends from the factory into the consumer's hands as a very rough average (VERY rough, markups vary a lot per product and industry).
That's with two chains of markup, so clearly 1000% feels absurd from one part of such a chain. Outside of factors like drinks (which are easy to scale and can have markups well into the hundreds), it's pretty hard to find any part of the chain as not "overcharged" once we go past 100% markups in any given place.
on the most generous side, Costco famously has markups limited to 14% (albeit they rely on bulk purchases to mitigate that). and subsidized vehicles used to generally be a 10-15% markup price. So I'd say 15% is about the bare bottom of what to expect markups without some kind of twist. e.g. printers selling at a loss, making up for it with high markups for ink (another product that's easy to scale and marked up into the hundreds). or previously, a video game console in order to sell games (software, whose markup is hard to really determine since it's infinitely scalable and costs are more to make up for R&D).
I perceive that one of the reasons that people who want change in the devastatingly perverted system are repeatedly plowed over, cheated, and ignored when it comes to making actual policy is that as a group those with the most reason to be upset are easily swindled into engaging only vague moans about some miniscule ignorable example being bad but not being ready to articulate what should be done instead as a set of categorical rules. And it happens over and over again until the voting public are bred into helplessness, and the way out is to talk about things in actionable ways instead of in vague handwavy ways. And the path to collective dialogue shift has to start somewhere, so it can start with us. Was it painful?
I suppose so. But I have no insight of these concepts outside of the 30 minutes I spent studying various markup strategies. And I have no interest in trying to personally influence policy (especially in something I studied for 30 minutes ". I don't know how many qualified people in this community can influence such stuff (or any that will read HN specifically) , so I simply question the tactic's effectiveness.
Semicon tool builders (my industry) have margins around 50% (cost + 100%). This is considered high margin manufacturing work.
To match United Health's margins we'd need to raise prices by 5x.
Some loaves of bread are worth a dollar. Some are worth ten dollars. The exact line is hard to pin down... but a $1,000 loaf of bread is probably excessive.
One part "free market -- maximize your profits as much as you can and get rewarded by a skyrocketing share price!"
And one part, unspoken except in the PR BS put out by the insurance companies, "Try to improve the health of patients and have them not die!"
The only way the two can coexist at all is if someone draws some lines like you are suggesting. I know that there are some (probably easily manipulated) laws stating that X% of premiums have to be "spent on care" and if they get too high overall margins on your group, they have to give your employer a rebate. Of course, who knows whether you'll see that money.
If we just say "maximize your profits" (and indeed, shareholders 'should' sue them if they don't) then it's obvious that morally bankrupt scum that runs all these insurers would 100% extort people for 1000% profits on lifesaving drugs. It's the most logical course of action! People will pay infinity dollars to save their own lives/their loved ones, so let's soak them!
If it's not obvious, I believe that overall the "free market" part of this system is a failed experiment that should be abolished immediately, and not just because I want all of these companies' sickening, greedy executives to go straight to hell (where Brian Thompson is burning today).
after WW2, there was very obviously inflation. It was crazy in the EU and Japan, but the US still experienced some too. To fight this, the government made a then-common tactic of wage controls: basically cap off the maximum amount an employer can compensate workers, in order to fight the inflation spiral.
But there was an imporant exemption. This was only on wages and not any benefits given to employees in order to try and quell the inevitably angry employees. So when companies couldn't attract talent with more money, they offered more benefits. including employer sponsored healthcare. Perfect since these contributions were free from income tax.
And the modeled spiraled from there. a tax code passed in 1954 to let these contributions be business expenses, Medicaid came in the 60's, etc. It was great back then, but it was getting more expensive to navigate and companies started compromising to manage it. up to our favorite healthcare starting its vertical integration 20 years ago to come into what we know them for today.
A better approach would be to mandate that everyone purchase individual or family policies directly from insurers on open exchanges using pre-tax dollars, with subsidies for low-income consumers.
https://content.naic.org/insurance-topics/pharmacy-benefit-m...
Of course it's all subjective, but I cannot think of a single other industry that can get away with a 1000% markup on anything and expect to get away with it. In proper capitalism, that just means any competitor worth a dime can massively cut you with a 300% markup that is insane but a steal in comparison. Then it just stabilizes to some point between where competitors need more saavy to compete and more than some minimum markup to function.
I'd say overcharge is correct given the monopolistic structure of healthcare. You don't have too many choices to begin with and it's very hard to switch.
Perhaps we need antitrust action in healthcare.
To start, can anyone give some good resources that really explain clearly what the role is that PBMs actually serve, and how the whole system even functions? I've tried to understand in the past but have always thought "Why do you exist???". Like the whole way companies like GoodRX can have a viable business: if I don't use you, my prescription medication is, say, $1000, but if I do use you, it's $60. One of the pharmacies I used to go to even had a keychain with random prescription discount codes on it that the cashier would scan. I.e. I'd go to check out, and the cashier would scan the price and it would come up as $X, then she'd say "Hold on a sec", and scan the discount code on her keychain and then would say "That's better, your price is now $0.1*X".
Like how can any of that possibly make any sense?
GoodRX and other discount providers generally work in one of two ways:
1) They have relationships with multiple PBMs, allowing you to choose the one who has negotiated the cheapest rate with the pharmacy for the drug in question. This is why it might be cheaper than your insurance: another PBM has negotiated a better deal.
2) The discounts come from patient assistance programs run by the manufacturers intended to reduce patient co-pays. Lately insurance companies have started to add clauses to their plans (called copay accumulators or copay maximizers) so that these discounts don't count as part of your copay or your deductible. So these types of discounts are going to be harder to get.
This all stems from a time when pharmacies were much less consolidated and vertically integrated than they are today.
One of the frustrations of the current system is that incentivizes sky-high drug prices. PBMs like high drug prices because they negotiate rebates (some of which they keep, but most they pay back to the insurer) and because the fees they charge to insurers are a percentage of the claims that go through. Pharmacies like high drug prices because they get more money paid them in reimbursements, and because the PBMs send them most of their customers. Manufacturers like high drug prices because they net more revenue, even if they later have to pay it back in the form of rebates, and in any case being on the formulary of major insurers is an existential issue for them. And insurers like high drug prices because they can max out patient co-pays, as the money returned to them in the form of rebates gets kicked into the general fund, thus allowing them to lower premiums, which is their primary axis of competition with other insurers.
The net effect is that you have sick people maxing out their deductibles in order to lower the premiums paid by healthy people--the exact opposite of how insurance is supposed to work. If I could wave a magic wand in Congress and make only a single surgical change to healthcare markets, the change I would make is banning rebates. They were anti-customer when John D Rockefeller used them to obtain a monopoly on oil, and they are anti-customer today.
A good place to read about these dynamics in American healthcare is drugchannels.net. The author is super well informed on how these plans are implemented.
Source: ran a startup targeting pharmacies (which failed) and currently work in a starup focused on discovering and developing new drugs.
Grift all the way down.
But again, at least that one I theoretically understand. PBMs make no sense to me whatsoever.
All this on top of being a for-profit corporation whose mission is quite literally to enrich shareholders, instead of helping patients navigate the healthcare system.
RICO them.
They've essentially constructed their own single-payer health care provider, but instead of being paid for by tax dollars it's a publicly traded company whose primary goal is to increase shareholder value.
https://kffhealthnews.org/news/article/drug-companies-copay-...
I’d like to learn more about these PBMs and how they have so much power and what their purpose is.
https://www.investopedia.com/articles/markets/070215/what-ph...
Their S-1 also stated,
> In addition, HIPAA, which we believe does not currently apply to most of our business as currently operated
(I should also say that I agree with the implicit message in your comment, too.)
much shareholder value was increased, I'm sure.
I wonder if places that read right to left also chart things so that 0 is on the right side and the positive numbers are on the left.
These massive profits are because of the so-called "regulation" that has continued to keep market dynamics away, new entrants out, and the industry supremely entitled (from doctors to billing departments). The political debate continues to be sidetracked by doubling down on this mistaken idea of thinking constructive outcomes can simply be declared in law. What needs to happen is to focus on making healthcare a competitive market where patients have agency, while also providing direct financial subsidies when people need them.
Most industries are either optional things you want to have but can live without, or necessities you need on an ongoing basis that need more than a few minutes of individual attention.
There’s a lot more to medicine than emergencies and lifesaving treatments. But I think those are the original sin from which the rest flows.
The basic question is this: should people be left to die if they have a sudden life-threatening event (heart attack, hit by a bus, shot) and they can’t demonstrate an ability to pay for treatment? (Note, not the same as not being able to pay for treatment. This would potentially apply to a rich person who got mugged and left for dead, for example.)
Few will answer “yes.” And everything else flows from the “no.” The US’s universal health care system is built around it. We pretend we don’t have universal health care, but we do. It’s just tremendously shoddy and weird. The one place with universal care is the hospital emergency room. Those have been required to treat everyone regardless of ability to pay since 1986. Once you start doing that, the rest flows from there. People start saying, what if it’s not critical to survival but they’ll be crippled without it? What if it’s life critical but there’s time to verify payment?
Can we do better without removing that? No doubt. But we’ll have a hard time getting to a proper competitive market.
Other industries with these characteristics (police, firefighting, rescue, ambulance if you count that separately from medicine) are usually handled by the government or at least contracted by them.
Everything else has flowed from the "no", but I do not think it needs to have. Imagine the government being a definitive payer of last resort, instead of this unfunded mandate where hospitals have to provide emergency service for free but then receive a bunch of regulatory capture to make up for it.
That still leaves an avenue for hospitals to defraud the government about how much providing that care cost, and emergency care has that dynamic intrinsically regardless of who is paying. But that's still leaps ahead of basing the entire industry on a foundation of billing fraud shakedowns. And it would be a lot harder for emergency departments to claim exaggerated fraudulent costs when the rest of the hospital is charging much less.
The vast majority of care is not life saving emergency treatment, and this is where the brokenness of the current system gets really galling. For example I just had a specialist declare that the proper course of treatment is to follow up in 12 months. I nudged them that 12 months seemed like an awful long time, but they held fast. I would happily pay for another check in 6 months if the system would let me. But instead, the concept of patient agency has been completely scrapped in favor of top down "necessary" and "not necessary".
Eventually you’ll get something like the systems you see in most wealthy countries.
Or you can go the way we did, which is enact universal care in the dumbest way and pretend we didn’t.
For example, perhaps having a follow up after 6 months only increases the expected value of the outcome by 0.1% and then multiplied/integrated by expected lifetime earnings it's not worth the economic cost of the system paying for that earlier follow up. But being my life, I should be able to spend my resources (including my time, which this current top-down model certainly doesn't account for) to achieve an outcome with much more utility to me personally than simply how much income (/taxes) I'm expected to produce.
Most of these systems do allow that sort of patient agency for those who can afford it, though. Maybe you had a weird specialist who didn’t want to see you earlier, but there are plenty of doctors who will go beyond your insurance coverage in exchange for cash.
I’ve been on the selection side as an employer and several others will probably echo what I’m about to say.
Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable. United was quoted to me as almost 20% lower than current rate for our provider (before they are about to go up 20%).
On premium alone they will save some people close to $500 / month for what is…”on paper” the same coverage.
I’ve read all of the same stuff about United that everybody else has but the finances put employers in a very difficult position.
That is after you convince them that your procedure or exam is even needed, which can be a long protracted fight in itself.
Medicare may turn you down for an organ transplant because there are only so many to go around and you're not the best candidate. Private insurance may turn you down because "shareholder value".
https://optn.transplant.hrsa.gov/patients/about-transplantat...
But that’s not shocking. Lobbyists and campaign donations make such behavior expected.
The UK does a good job of hiding economic concerns from its users, at a cost in availability of services, especially high-end and experimental interventions. The UK makes these rationing decisions knowing that some people are going to be denied life-saving care, but in exchange for that everybody else in the system will get predictable access to their care.
The American system does a good job of getting services delivered to customers; it does a better job of that than the NHS does, if you measure in interventions performed; it does such a better job at that that it's a real problem in our system: we overprescribe and overdeliver interventions that drive costs and decrease certainty as payers work out which things to cover and which not. The flip side of that is that everyone in that system can tell themselves that the system is doing what it can to gate delivery on whether care is truly needed and will be effective, and that it's not categorically denying care because of top-down mandates.
Neither set of values is totally benign. You can prefer one or the other.
I can go all 12 rounds on this topic, but if I keep writing about this I'm not going to write the work thing I'm supposed to write, so I'll leave it there.
The American system does a good job of getting services delivered to customers;
Therein lies one of the reasons the U.S. system is immoral. There are lots of people who can’t afford to be customers.
It is immoral to profit from denying someone healthcare.
https://www.statnews.com/2024/07/25/united-health-group-medi...
> It’s no secret that UnitedHealth is a colossus: It’s the country’s largest health insurer and the fourth-largest company of any type by revenue, just behind Apple. And thanks to a series of stealthy deals, almost 1 in 10 U.S. doctors — some 90,000 clinicians — now either work for UnitedHealth or are under its influence, more than any major clinic chain or hospital system.
They purchase physician groups... and then pay themselves higher rates.
https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...
> UnitedHealth Group is paying many of its own physician practices significantly more than it pays other doctor groups in the same markets for similar services, undermining competition and driving up costs for consumers and businesses, a STAT investigation reveals.
I mean, yeah. They're doing all the work.
Medicare's rates are about a half to a third of what private insurers have managed to negotiate. Funny how that works.
Doctors are not the problem with American health care, for-profit insurance is.
In part, because dealing with insurers is immensely costly in staff and time.
(Other parts include the immense cost of twelve years of secondary education here; a million bucks in student loans isn't uncommon.)
> a lot of that work is wasteful and unnecessary (see: spinal fusion surgeries, back imaging)
Which makes the "insurers are there to reduce waste!" argument especially tough to stomach.
https://www.washingtonpost.com/business/2023/08/04/doctor-pa... / https://archive.is/ZBRMx
> Polyakova and her collaborators find doctor pay consumes only 8.6 percent of overall health spending. It grew a bit faster than inflation over the time period studied, but much slower than overall health-care costs.
> “People have a narrative that physician earnings is one of the main drivers of high health-care costs in the U.S.,” Polyakova told us. “It is kind of hard to support this narrative if ultimately physicians earn less than 10 percent of national health-care expenditures.”
Does anyone think American healthcare was thereby fixed? I don't!
Now, FWIW, I'm happy to accept that US doctors are overpaid, and that there are feasible ways to make progress on that front. It's an important conversation to have. But it has virtually nothing to do with what makes US healthcare so brutal and kafkaesque.
Last time we did this song and dance you doubled down on incorrect assumptions about how Medicare functions. So, no, it's not likely I'll come to the same conclusions as you.
What the actual f!?
That saving is double the total cost of my private health insurance in Australia!
This includes the “Medicare levy” tax I pay at the highest rate because I get an above average income.
Health insurance cost is something I just don’t think about.
My missus reminds me every few years to combine our plans because it might save us AUD 250 per… year. Maybe.
My health insurance.
(Germany, "public" insurance with one of the 150 or so "sickness funds" those of us in the 90% who have to be on public insurance can choose from)
> Virtually every insurance provider is going up 15-20% / year to the point that it’s completely unsustainable.
The elephant in the room is that healthcare costs are going up. Even if we waved a magic wand and eliminated health insurance overhead, profits, and executive pay, your rates would still be going up that same 15-20% per year.
This is the part that seems to confuse everyone. There's a common misconception that insurance companies are raking in huge profits and that prices would plummet if we could just eliminate those profits. You see it throughout this thread with phrases like "dancing on the graves all the way to the bank" and blaming "capitalism" or "corporate greed" with the implication that insurance companies are the purveyors of this greed.
Yet we have non-profit insurance companies. They're not appreciably cheaper. If you look at insurance company profits, they're actually relatively low for companies that large. If you map healthcare spending on a big pie chart, the slice that goes to insurance company administrative overhead and profits is not that big. Single digit percentage. Even companies with socialized medicine have some overhead in this same slice.
The problem is multifactorial. The challenge is that it's not politically safe to touch on some of the drivers of US healthcare costs. Everyone loves to point at insurance companies and drug pricing because it's easy, but things get much quieter when you point out that our doctors, surgeons, and providers are paid substantially more than their peers in other countries. Americans also love to consume more healthcare and many would be very upset if they were forced to accept the level of allowed care and delays in other countries. It's not just insurance companies who have decision trees about when and what care is allowed. Americans also consume medications at an extremely high rate. Again, they don't take kindly to suggestions that we limit prescribing or drug prescriptions (see outrage over the DEA limits on amphetamine production or complaints about hesitancy to prescribe opioids, even though we already consume far more opioids than most countries).
Many Americans also live unhealthy lifestyles which contribute greatly to healthcare costs, but it's taboo to mention that. Everyone has seen the life expectancy charts showing US lagging international peers, but fewer people have seen the per-state version that shows that life expectancy depends heavily on where you live (and therefore what you eat, how active you are, and the local culture). Instead, the only acceptable target of blame is our food. While we have some room for improvement, we're not going to solve the obesity epidemic and lifespan problems by banning red dyes. Lifestyles and diets need to change, but that's a difficult topic. Much easier to point the finger at insurance companies, "CEOs", and the food industry and pretend that those cover all that is wrong with healthcare.
This is why it's politically difficult to accomplish anything in the United States. If anyone tried to copy and paste the health care system of a European country, from doctor pay to allowed procedures to more limited prescribing practices, there would be riots. People want all the healthcare, they want it now, they want it how they decide, and they want someone else to pay for it.
What isn't happening is increasing cost because of either more or improved care. As time goes on it should be easier to make drugs, meaning that prices should go down. Instead the cost per gram of even very simple drugs like epinephrine and insulin are going through the roof. Doctors are paid well, but they've always been paid well, and in fact while physician pay over the past 70 years has kept pace with inflation, it has been far outstripped by the price of education needed to achieve that salary, meaning doctors today are generally worse off financially than they used to be. other medical professionals like nurses are seeing increasing workloads without commensurate increase in pay. American life expectancy is decreasing, as are numerous other measures of healthcare efficacy. While we are paying more, we are getting less than we used to.
Then there is the common argument - our high drug prices subsidize new drug development. Only issue is that new drug development has been steadily slowing down. Most drug development is in the form of minor changes to existing drugs that serve little purpose beyond resetting the clock so cheap generics don't come on the market. Where new drugs are developed, they tend to be focused on profits, for example new pills to help people maintain erections rather than treat rare diseases. When the stars align and a new drug is developed that genuinely helps people, it tends to be insanely expensive, such as the cancer drugs TFA is talking about. This is not to say that nothing at all gets done, but it's less than it used to be.
Is insurance the only problem in America? No, obviously not. But at the same time, healthcare prices dramatically higher than anywhere else in the world that are also rapidly increasing is not an inescapable fact of life. Our healthcare can be both substantially cheaper and higher quality than it currently is by eliminating purposefully inefficient systems that use anticompetitive practices to jack up prices. When the dust settles US healthcare might remain a bit pricy per capita - part of having a country with very high wealth per capita is that everything is expensive per capita - but our money will be going towards paying skilled people to do useful work for our benefit.
Not sure what exactly is meant by that, but most people did not think the killing was acceptable.
https://www.axios.com/2024/12/17/united-healthcare-ceo-killi...
That's a big number of people.
Everybody expects a higher standard of care, because now we treat things that we didn't even know about in the past. For example, I have a CPAP and went through surgery for sleep apnea. 50 years ago, who knows what would have happened to me?
Medical providers are incentivized to "find" things to bill for. For example, I went to a podiatrist for foot pain, and she tried to figure out how to have me visit monthly.
Likewise, end-of-life issues can get very expensive, because it's hard to say "no" when loved ones' emotions are fragile.
Privatization and ineffective/lobbyist-written regulation is and has been the problem from the beginning.
Adding "but before all those complex concerns, our number one priority is making a profit" is literal insanity.
Add to the mix that employers are only incentivized to provide care for accute conditions that jeopardize productivity (rather than things that improve longevity and quality of life), and I mean... what did anyone expect?
Healthcare is complex but understanding why we're living in a failure mode isn't. The fundamentals are completely incorrect.
That seems to me like the big thing you're kind of glossing over. Like I said, I don't really want to go to the mat for them, but I'm sure there's plenty of risks Big Pharma corps have taken buying up research they thought would pay off and then failed to bring to market.
Maybe it'd be better to have governments buying the research and bringing it to market, but as this subthread hints at, profit is one of the big motivations for researchers to do what they do. Hopefully the government would still be paying big bucks for the research, and hopefully the taxpayers wouldn't vote in someone who wants to gut whatever arm of the government is responsible for that after enough failed purchases.
You mean the patent system? The university of california holds patents on CRISPR, for instance.
Still, that doesn't justify insurance companies siphoning off money for their shareholders. Especially in these cases where they own/control both the insurance company and the pharmaceutical distribution.
Wasn't that what Milla Jovovich was called in to deal with?
Until COVID, insurers in my area wouldn't cover telehealth at all. They opposed it tooth and nail.
Tracking and data harvesting, excellent!
Or both.
I think the graph at the top of this article really says it all: https://www.economist.com/graphic-detail/2019/05/22/republic...
Imagine all the innovation we're missing on every day a country isn't being invaded!
You can't possibly argue in good faith that being able to provide less than 0.1% of novel treatments is somehow more valuable than providing good, standard healthcare with already existing drugs and treatment protocols to the other 99.9% at a sane cost.
Average health insurance profit margin in US is ~3%. That's not a greedy profit margin. It's the health care that's expensive, not the insurance. Health care is much more expensive in the US than in similar countries. I'm not an expert on why, but there are all sorts of misaligned incentives on IP and drug pricing that need to be fixed. It's not the insurers.
While every healthcare system has administrators, the US system with its thousands of different systems interacting with thousands of other individuals makes for a nightmarishly complex problem. Doctors in countries with socialized medicine complain about the government administrators too, but at least they only have one system to deal with.
https://www.epatientdave.com/2017/06/16/the-effectiveness-of...
So tell me, what is the relative cost efficiency of the U.S. Healthcare System vs France/GB/etc..?
People like to use the term government bureaucrat as a thought stopping term, when combined with trust me bro "assurances" it seems extremely hollow.
Give me a data/financial analysis instead of something that sounds like the advice two old dudes sitting in front of a five and dime pre-internet.
What about the CEO salary? What about his secretary? The rent they pay for the buildings they occupy? Going down that path, how much of the operational expenses of private insurance meaningfully improve patients' health?
Not sure what the total exec team costs but if the ceo was paid $10 million that’s 0.03% of revenue and 0.1% of profit.
Not defending them but I do think that people hear $10 million but don’t quite realize how huge the pie is.
I don’t think healthcare should be for-profit, but since we do have that system, what do people expect the ceo of a company (any company) that grosses $370b to earn?
It’s a bit reductive to just say something like “he makes $10 million dollars a year denying patient life-saving treatment”, just like saying the ceo of ratheon makes money from the killing of innocent Palestinians.
In the end though, I increasingly feel like the only moral solution is to have a single payer fully socialized system.
https://www.unitedhealthgroup.com/investors/financial-report...
If the market is competitive, you can trust that you're getting what you pay for. If it's not, well then that's the problem.
I don't know, people who talk about profit margins as if they mean anything in this context are either financially naive or are trying to muddy the water.
I'm not sure a low profit margin is indicative of a company providing a moral degree of service to their insured. Certainly naive profit margin percentages don't show the terptitude of overcharging cancer patients.
For someone who doesn't get this, if a company like UHC buys an entire hospital group they can use that expenditure to legally "hide" profits by reducing their "profit margin" short term while decreasing competition in the space.
If a company acquires enough debt in a given year they can "hide" nearly unlimited profit margins legally.
On a larger scale, a company (UHC) can dump money into "external" money losing ventures that just serve to hold wealth and take that money off their balance sheet, once that entity takes on enough debt the same company (UHC) can acquire it taking on that debt and reducing their profit margin yet again.
GE Capital and Amazon are poster children for having done this process in a legal fashion.
As a beginners guide, if you have access to a talented accounting firm you can ask about these approaches to get started:
1. Management & Consulting Fee Arrangements (Especially with Related Parties)
2. Transfer Pricing (in Multinational Contexts)
3. Debt Pushdown & Thin Capitalization
4. Special Purpose Entities (SPEs) or Variable Interest Entities (VIEs)
5. Intellectual Property (IP) Holding Companies
https://www.sensible-med.com/p/the-entire-healthcare-system-...
Could it be that good chunk of the profits is eaten by overinflated salaries of major execs?
You seem to be making a weird connection here, but maybe I misunderstand you.
Are you truly suggesting that countries who have socialized health care do so because they've been affected by war on their territory at some point?
[1]: https://en.wikipedia.org/wiki/National_Health_Service#Histor...
I could be misremembering pieces, but the long and short of it was that salary compensation was capped/restricted during World War 2 and so companies began offering benefits outside of salary, private health insurance among them, to retain their employees.
I forgot about the world-class healthcare the populations of Africa, the Middle East and the war-ravaged parts of Asia enjoy.
I agree there is probably a link between war and healthcare. But the link flows through civic pride and identity, and population-wide familiarity with the horrors of war, more than it does from any sense of military preparedness. (That said, I've never seen an American politician try to sell universal healthcare as a national security imperative. Hmm...)
https://en.wikipedia.org/wiki/Invasion_of_Iceland
https://en.wikipedia.org/wiki/Allied_occupation_of_Iceland
(Very politely, but still...)
> Uncomfortable with the crowd, Consul Shepherd turned to the Icelandic police. "Would you mind ... getting the crowd to stand back a bit, so that the soldiers can get off the destroyer?" he asked. "Certainly," came the reply.
> One Icelander snatched a rifle from a marine and stuffed a cigarette in it. He then threw it back to the marine and told him to be careful with it. An officer arrived to scold the marine.
> In total, there were 97 air attacks on northern Australia, though air reconnaissance was carried out over the region by Axis Powers through much of 1944.
https://en.wikipedia.org/wiki/Japanese_air_raids_on_Australi...
and
> German and Japanese surface raiders and submarines operated in New Zealand waters on several occasions in 1940, 1941, 1942, 1943 and 1945, sinking a total of four ships while Japanese reconnaissance aircraft flew over Auckland and Wellington preparing for a projected Japanese invasion of New Zealand.
https://en.wikipedia.org/wiki/Military_history_of_New_Zealan...
Sounds like https://xkcd.com/1122/
For instance, Canada, which also arguably "never had a world war on the continent" has public healthcare. What gives? What about all the central/south american countries that don't have public healthcare?
...Until Kamala Harris in 2024. Took twelve years, but...
If they kill people, they pay (small to them) fines.
Oh wait, the have special tax laws, depreciation, and deductions that real people can't use.
It's almost like he only recourse is to print out a gun and (censored)
Happy capitalism everybody.
DIRECT health care labor costs (doctor's, nurses, etc) are ~40-60% of TOTAL healthcare spending.
Smart people try to figure out ways to make our system better every day. If there was a silver bullet, we'd have already taken it.
Health insurance profits are ~1.2% of total health care spending, the cost of running it is approximately ~4% more.
It's always going to cost SOMETHING to run - whether you move it to the private or public sector is largely a rounding error.
If you take all those insurance jobs and pop them into the Federal Government - you're unlikely to see much efficiency gains (the most pro-medicare articles state it's 37% more efficient - that's an improvement of ~1.5% in total spending).
UHC had a net margin of 6.1% in 2024.
Sure, if all 6.1% of that went to spending instead of profits - health care would be slightly better.
But it's mostly a rounding error. Private health insurance profits are only ~1.2% of total spending.
Maybe you're focused on a ~6.1% margin, or ~$60B in total profits.
You're not going to get substantially better outcomes by simply having ~1.2%-2.7% more money to spend.
You'd need to bring down the actual cost of healthcare substantially - which isn't going to happen unless you pay doctor's and nurses way less money.
Pharmaceuticals are only about 9% of total US healthcare spending - even if you nationalize that (never going to happen) - you're still not getting substantially better / cheaper outcomes.
Profits on pharmaceuticals is <2% of total spending as well.
The only way you're getting significantly cheaper service is by reducing your biggest cost significantly - i.e. paying less for direct patient healthcare (doctor's, nurses, etc), and that's probably not a great strategy for getting better outcomes.
Who knows? NHS pays doctors dirt, and their system isn't obviously worse than ours. Some people think it's way better, others way worse.
The US gets a bum deal on costs and outcomes and while we can argue on which specific changes will move which specific needle I think it's clear that one of the major differences compared to the rest of the world is that running healthcare as a for profit enterprise has failed to deliver on the promise of good outcomes for as affordable a price as possible both on an individual and country wide level.
[1] https://www.politifact.com/factchecks/2017/sep/20/bernie-san...
Which has almost nothing to do with the amount of profits derived from private health insurance - that's only ~1.2% of spending.
Maybe it used to be ~0.8% - that delta is not moving the needle.
I feel like focusing on this part of my comment vs. the bum deal part is disingenuous since non-US countries have figured out how to do it for cheaper with better outcomes without the main focus being the up and to the left drive for profit that our current system mandates.
People do that literally everyday.
If there was a silver bullet, we'd take it.
Instead, because despite data linked in this thread that profit margins are only a few percentage points, Healthcare is an incredibly lucrative field that extracts a lot of money into the private market without delivering results commensurate with the cost to the public.
Add to that lobbying making it incredibly simple and cost effective to influence policy (which comes out in the P&L as a cost of doing business and so isn't tracked as profit FWIW), we are stuck with this situation despite overwhelming evidence that it's a bad deal.
Yet they are unable to provide lower premiums than UNH/Elevance/CVS/Cigna/Humana/Centene/Molina.
Kaiser is a full vertical, you buy insurance from them, you see their doctors and nurses in their outpatient clinics and hospitals, you get medicine from their pharmacies. So why is everyone not choosing Kaiser?
Edit to respond to below since posting limit hit:
UNH had $371B in revenue, not profit, therefore it is irrelevant. If the claim is UNH is excessively profiting, then profit margin is the only metric relevant to the discussion.
Kaiser's managed care organization IS non profit, so it is relevant here. It clearly shows that the managed care portion of the business is not sucking out outlier amounts of profit, because Kaiser's premiums are not different to UNH or any other MCO's premiums. Also, Kaiser's annual revenue is $100B or so, not $4B.
https://about.kaiserpermanente.org/news/press-release-archiv...
If a managed care organizations being for profit or non profit was the straw that was breaking the camel's back, then it would show up as non profit managed care organizations being able to offer much lower premiums.
>say that for profit is the way to go because if Kaiser can't do it then nobody can.
I am not claiming for profit is the way to go (or the opposite). I am saying, within the confines of the US healthcare system, for profit managed care organizations are not THE source of higher healthcare costs.
edit: I think I missed the last part of your comment in an edit, so to attempt to answer my own questions, it's not a fair comparison beyond just the almost 100x size difference to compare a different business model and scope, provider network, risk pool and geographic presence yet ignore every other developed country in the world and say that for profit is the way to go because if Kaiser can't do it then nobody can.
[1] https://www.reuters.com/business/healthcare-pharmaceuticals/....
First it's the government can't do this, then it's the government wouldn't do this because of this reason while ignoring that the US healthcare system is spending more than any other country and missing the mark on outcomes. Every other developed country in the world has figured this out. While not perfect, they're paying less and broadly getting better outcomes.
I don't know why what you're describing happens, but my money would be on some triage that needs to happen due to limited funding since so much of our spending goes into private healthcare solutions.
* Medicare would not have 2% overhead if it served 30-year-olds.
* Medicare is in fact the primary constraint on the supply of doctors in the US system.
* For profit motives get in the way of cheap, effective healthcare. Maximizing shareholder value leads to higher prices, overutilization of expensive proceedures and prioritization of profit generating services vs. preventive care or basic health care needs and improved outcomes.
* Incentives are currently heavily skewed to the point that providers and insurers are more likely to treat symptoms rather than address root causes or preventive measures leading to a cycle of chronic illness and higher long term costs.
* Access to healthcare should not be tied to socioeconomic status. Employer sponsored insurance and high out of pocket costs create significant barriers for lower income individuals and families, dragging the average down (i.e. the system is fine if you can afford it).
* Administrative complexity in the current system massively inflates cost. The fragmented nature of private insurers, billing systems and out of network shenanigans results in massive inefficiencies and expenses that contribute nothing to patient outcomes. I am confident this comes out to more in savings than the %age profit that is referenced in other places in this thread.
Medicare would not have 2% overhead if it served 30-year-olds.
Edit since responding to your prolific bad faith arguments got me throttled:
Your argument is that younger people would magically add to the overhead incurred by Medicare. My point is that Medicare's low overhead already includes younger people who are more likely to use expensive modes health care more frequently than the typical younger person. And even then Medicare denies claims at a much lower rate than for-profit insurance companies.
But somehow, adding more, healthier younger folks to Medicare would add to the overhead?
Nah.
Edit since I might as well address another bad faith argument:
Medicare rate limits the number of new doctors allowed into the system
every year, through the residency funding system.
Pharmaceuticals is ~9%.
Health insurance profits are 1.2%.
Other profits are x%.
Medical equipment, devices, hospital rents, etc are y%.
Most of the remainder is admin & insurance costs - only about ~2% of which is private health insurance operating costs (largely labor).
UnitedHealth Group is the owner of both United Healthcare (the largest insurer in the country) and Optum (the largest healthcare provider in the country).
Part of UHG's low profit margin is its liberal use of intra-company eliminations, where transactions between Optum and United Healthcare get zeroed out and don't count toward profit despite it ultimately generating more dollars in the parent company's coffers.
You eliminate ~1.2% of total healthcare spending on private insurance profits.
Then you eliminate ~37% of ~14% of ~27% total healthcare spending on insurance labor costs = ~1.5%.
* Article states medicare is ~37% more efficient.
* Insurance companies are required to spend AT LEAST 80% of premiums on actual patient care (~6% of the remaining ~20% are profits - already taken out in the previous ~1.2% of total health care spending).
* ~27% of total US healthcare spending is on private insurance premiums.
You end up with ~2.7% cheaper healthcare in the ABSOLUTE best case.
That's not moving the needle.
- Insurance companies being required to spend at least 80% of premiums on patient care logically incentivizes them to keep patient care costs high, because if costs go down then profit goes down. If your MRI costs $1000 then the insurance company is allowed to make $200 in profit. If your MRI costs $2000 then the insurance company doubles their profit to $400.
- Removing private insurance would give public healthcare far more negotiating power on costs. While there is a limit to profit margins made by insurance companies, there is no limit to the profit margins made by medical suppliers, pharmaceudicals, etc.
- Removing non-paying patients would reduce prices charged by hospitals. Hospitals are essentially sub-prime lenders making loans out where no assets are involved. They have to charge insurance companies more money to cover everyone else who doesn't pay. Moving to healthcare paid for automatically completely removes the issue of unpaid bills, collections, medical bankruptcies (how much do the salaries of bankruptcy courts, judges, lawyers remove from the healthcare system?).
- You're arguing against the established fact that all other countries besides the United States spend less on care. If the United States tried anything else it would be likely to reduce costs.
6.1% profit margins is a lot when it should not be for-profit in the first place. Why is anyone making a profit off of administering necessary services?
What is the operating profit of your local firefighter brigade?
What is the operating profit of the interstate highway system?
What is the operating profit of your local water/sewer department?
Not a single person in this country doesn't need healthcare at some point. It's not an optional for-profit good.
The fundamental problem is that we don’t have enough resources to take care of everyone. Insurance companies are faced with the impossible task of allocating resources and making care/nocare decisions.
I don’t get the “endless profiteering” angle against insurance companies. If anything it’s the providers who are screwing over patients by gaming insurance and taking more than is necessary from the shared insurance pool of money.
https://www.statnews.com/2024/07/25/united-health-group-medi...
To whom they pay higher "medical loss":
https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...
If the 85% gets larger, so does the 15%. Both sides gain when the cost increases.
But it does seem like there’s a serious prisoners dilemma type situation going on in American health care. It’s easy to point fingers at someone else.
The situation is also coupled with a toxic political environment where a Trump voter can simultaneously be against “Obamacare” and think that Trump is going to improve access to healthcare, and a Harris voter can be pro Obamacare and ignore regulatory capture by pharmaceutical companies- e.g., both sides so convinced they’re right and the other side is wrong they won’t be seen to agree on anything common sense.
My sense is that people expect too much from their health insurance. Subconsciously, we expect to experience no pain and live forever. When this inevitably doesn't happen, we blame insurance companies for not bankrolling infinite healthcare.
The easy as hell solution to this is insurance companies collude with hospitals to charge patients more. 5% of 5000 is more than 5% of 2000.
In some cases insurance companies just buy up hospital chains and then bill themselves whatever the hell they want to.
Insurance, in a vacuum, detached from an industry is a perfectly sensible way to try to spread risk. And as you say, this fair, reasonable insurance isn't about getting extremely rich, but about being the best at identifying where the risks are, and using market power to lower costs. But with healthcare, and especially with the US peculiarities, we manage to get minimal value out of it.
People getting care don't know their options, and how different the pricing can be. Insurers are capped by a percentage of services paid, so they really are happy if everything is very expensive. Providers band together into conglomerates that make sure it's hard for insurers to lower reimbursement rates. Pharmacy benefit managers build complicated schemes that let them take a bigger piece of the pie. They even purchase pharmacies, and restrict the expensive purchases for themselves, while the local pharmacy is squeezed. All in all, it gets very expensive, with minimal control of spiraling prices, and nobody that can lower costs is incentivized to do so.
We blame insurers because that's the people that get paid first, but yes, it's not really a matter of just insurers. It's a kafkaesque system that is basically impervious to significant reform. And for good reason: Every dollar we overpay is someone else's salary. A decrease in costs per person for the same care to match, say, Spain would involve a whole lot of people making a lot less money, including many losing their jobs. Not exactly a political winner, even though the country would be better off with more efficiency
Roll up to the CVS in the Target, and they tell me "Aetna doesn't cover CVS in California at this time"...
"What is good for the shareholders is good for society" will be the order of the day.
Our media organizations are still dependent on politicians, who themselves take billions in "donations" from healthcare corporations. Those same media organizations also have workers who are probably partially invested into pensions or other long-term safety nets who themselves are invested into healthcare companies.
https://www.fiercehealthcare.com/payers/industry-voices-why-...
>This past year saw a wave of mid-sized employers, unions, and health plans exploring alternatives to the Big Three, a trend that will only continue to gain momentum in 2025. In fact, a recent report found that 52% of employers are considering changing their PBM in the next 1-3 years. While 72% of employers still primarily contract with a Big Three PBM, 12% have already embraced a transparent PBM.
And let’s not forget, United Healthcare’s subsidiary Change Healthcare held the breach notifications for MONTHS from affected people. They only got sent out recently, and the company not only refuses to compensate victims in any useful way, but won’t even tell them what information of theirs was compromised (hint: medical records). This affected 100 million patients, many of whom have NEVER been customers of Change or United: https://techcrunch.com/2025/01/15/unitedhealth-hid-its-chang...
So it sounds like the report may be a bit misleading - what is being alleged here is that PBMs overpriced over the generics. So it's like if Coca-Cola set the price of their can at $50, and NoName at $0.50. So you be are being "overcharged" at the grocery store when you buy the Coke and not the NoName.
It's not actually clear from the report that the PBMs actually profited from overcharging. Furthermore, if the doctor prescribes a name brand drug, it's not always the prerogative of the PBM to switch the prescription on behalf of the customer.
The PBMs are defending it, saying that coke costs $30.
The problem is that the insurer and thus the PBM are supposed to be working on behalf of the insured, but they pay their sibling pharmacy well above the reasonable market price.
Even if they did profit, it is clear from their 10-Q and 10-K that the managed care organizations (MCO) did not tremendously profit.
https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
This kind of profit margin (<6%) would get executives in many other businesses fired. All the other MCOs actually have a sub 3% profit margin. UNH has a higher profit margin because it sells healthcare, not just managed care.
On the other hand, here are the profit margins for the companies that make medicine (20%+):
https://www.macrotrends.net/stocks/charts/LLY/eli-lilly/prof...
https://www.macrotrends.net/stocks/charts/NVO/novo-nordisk/p...
https://www.macrotrends.net/stocks/charts/NVS/novartis-ag/pr...
https://www.macrotrends.net/stocks/charts/PFE/pfizer/profit-...
https://www.macrotrends.net/stocks/charts/MRK/merck/profit-m...
Finally, search for the difference in rankings in market cap between pharmaceutical companies versus managed care organizations. There are at least 7 pharmaceutical companies in the top 100, and only 1 managed care organization. The next biggest MCO is #189.
https://companiesmarketcap.com
Edit to respond to below: It does not matter if UNH or any other MCO moves money from their right pocket to their left pocket, the SEC filed 10-Q and 10-K will reflect all revenue and expenses. Their low profit margin is evidence that the money is flowing out of the organization and away from the shareholders. If this business was as profitable as people claim, then its stock returns would indicate it, but they don't.
- When employers select insurance, providers will 100% of the time tend toward ignoring the interests of those who are insured: the incentives to do so are just too strong.
- When an insurance company also owns a pharmacy, it will 100% of the time tend toward overcharging: again all the incentives encourage this.
Unfortunately it seems most folks have little or no experience analyzing incentive structures when looking for levers to pull to improve outcomes. It'd be great to see popular discourse focus more on the environmental factors that incentivise these kinds of corporate abuse.
And, zooming out a little more, free market healthcare is just part of the problem.
We have a system where we’re only treating people once they have a disease, and not working to prevent the disease, so it would be helpful to look at the effects of for-profit companies on making healthy people sicker. Fast food, snacks, alcohol, there are so many industries that are incentivized to succeed by making people sick.
This is the system “working” according to the current rule set.
It’s time to look for a better algorithm than a purely profit maximizing one.
So while it was a pain to fight them on every bill, they did shell out for us.
Some of the biggest battles were with the hospital bill collectors.
The analysis in the comments suggests that UHC pricing is high due to cartel like price fixing. So while they “shell out” it seems like they are playing a shell game to loophole the 85% rule.
What is being alleged here is that PBMs overpriced over the generics. So it's like if Coca-Cola set the price of their can at $50, and NoName at $0.50. So you be are being "overcharged" at the grocery store when you buy the Coke and not the NoName.
It's not actually clear from the report that the PBMs actually profited from overcharging. Furthermore, if the doctor prescribes a name brand drug, it's not always the prerogative of the PBM to switch the prescription on behalf of the customer.
But I don't know that it's true. My questions regarding the US system and health insurance: Is it a truly free market or does the state regulate in ways that make it difficult for competition?
In Australia we have heavily subsidized healthcare, but it's not great. If you've got something life threatening then you'll be OK. If it's not life threatening, but just really difficult to live with then you'll wait. Sometimes years. No choice of specialist or hospital either. So many of us get private health insurance of one level or another, in order to have more choice and better, more prompt care.
So, how free is the US system?
Also, here's an X post from a guy called Devon Eriksen on the topic of socialized healthcare and free markets.
[https://x.com/Devon_Eriksen_/status/1865932424376377833]
PS: Devon wrote a great debut Sci Fi novel called "Theft Of Fire" (Orbital Space #1). It's a great read, with endorsements from John Carmack, "Uncle" Bob Martin and ESR, among others.
Without regulation it just leads to predation.
Ultimately ACA resulted in high-deductible plans and the current situation, despite temporarily insuring a higher percentage of the population.
The next solution needs to account for these factors. Will it?
The US healthcare system is an unmitigated disaster that is a cautionary tale in how capitalism only promotes rent-seeking and regulatory capture. It's done with a service with inelastic demand, meaning the threat of violence since we are quite intentionally withholding lifesaving healthcare for the sake of the profits of completely unnecessary intermediaries.
[1]: https://www.oecd.org/en/data/indicators/health-spending.html
People hear "X increase in tax, 3*X decrease in costs" as "X increase in tax!"
In other words, all patients that private insurers are likely delighted not to have on their books.
As another commenter put it, the government covers those with the highest cost of healthcare: veterans with varying degrees of disability, the elderly and the poor.
Another way to look at that is that insurance companies offload the highest cost people to the government so they can profit from the younger and healthier. How does that make sense?
You see this everywhere too, like with the push for privatization of education through charter schools and/or school vouchers. Some will point to the lower cost per student and completely ignore that the government education system doesn't get to be selective about students. State education caters to those with high-needs who are, just like with Medicare and the elderly, those that cost the most.
even from a purely neo-Liberal capitalist sense, this completely violates the shared fantasy of the "free market" and yet we still have people going on Joe Rogan saying stuff like "we need to deregulate the market further because this is all due to innovation being stifled through regulation" which is an absurd notion.
Every other country is eating our lunch when it comes to medical discovery and novel chemical compound discovery while the US spends all of its time and money evergreening medical patents to extend them indefinitely so they can maintain monopolistic control. I honestly just don't see a way out of this.
I'm sorry that your frustrations with the healthcare system have driven you to embrace evil and I really hope the day will come when you reconsider.
I'd argue that the word "murder" doesn't really apply here -- the thing in a suit that morning was not a human being, it was some kind of a carnivorous ghoul, a biological hybrid of ruthless corporate profit-seeking mandate and what used to be a person long time ago.