Insurance is really not the issue, it’s provider cost. And just the total cost entirely of the system of insanity. If you look closely into it there is no single (or few even) knobs you can tweak to fix the system. Not even Medicaid for all, at least as it’s currently designed.
No argument from me that insurance is not competitive enough. But they are almost all public corporations that are highly regulated so the numbers on profit and expense ratios are easy to get for yourself to prove the point. No need to take my, or anyone with an agenda word for it. Almost everyone wants a simple answer to a complex interdependent problem that does not have one.
If there was a single solitary answer of “what is the problem with US healthcare” I’d have to go with it being a principle agent problem. If everyone who consumed healthcare had to pay up front very few services would cost what they do. Even changing it so people were billed directly and then had to submit insurance claims later like how pet insurance or car insurance works would go a long ways. But even that doesn’t solve the problem entirely, as it leaves massive gaps. Second answer would be “administrative class bloat” like in all areas of the US today.
Single payer is certainly a major part of the answer, but in isolation it’d solve almost nothing and potentially make things even worse as all the inane cross-subsidy comes crashing down overnight.
Edit: the point is medical loss ratios, admin overhead, etc. is public information not hidden behind some private company firewall. The fact non profits haven’t captured 100% of the market by being crazily cheaper should be telling on its own.
Trying to understand why healthcare in the U.S. is so expensive is like trying to understand why building subway in New York is so expensive: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-.... The issues lend themselves to facile explanations ("insurance companies are greedy," "NYC's government is wasteful") but those are driven by ideology not analysis.
What we can say for certain is that heath insurance companies in the US stuff their pockets with tens of billions in profits each year and that Americans are paying far more while getting less for their money than other developed nations. I don't think those two things are unrelated.
U.S. healthcare spending is over $5 trillion a year. That’s $5,000 billion. So the “tens of billions in profits” you’re pointing to accounts for very little of what people spend on healthcare.
That’s what I mean when I refer to facile ideological reactions. For many people, “profits” are the problem, and they don’t care that health insurers on average are less profitable than Subway franchises. It’s just the mirror image of people who say the New York MTA is a disaster because the government is running it, and don’t care that governments in other countries manage to run cost-efficient train systems.
What is the profit margin of a health insurance company? Google suggests 2-4%, with United at about 6%. This does not seem that extravagant.
Something around half of UnitedHealth Group (UHN) profits come from other business units that aren't directly related to UnitedHealthcare insurance plans. They have a huge software business under the Optum brand that would be one of the top 20 largest US tech companies if it was broken out separately.
That means the insurer part makes even less profit.
> they are almost all public corporations that are highly regulated so the numbers on profit and expense ratios are easy to get for yourself to prove the point
Big players like United just shuffle money around because they own the entire vertical market. Their insurance arm is regulated so they just move the money to to their service provider arms like Optum which are unregulated with uncapped profits.
Many of the largest health plans are non-profit, not publicly traded corporations. This includes most of the Blue Cross Blue Shield Association licensees as well as some other large payers such as EmblemHealth.
Blue Shield/Cross is a federation, and Emblem is regional.
The real players are big corps like United and CVS, who control the whole vertical of provider and payer. They own the doctors, the pharmacies, and the insurance.