from Hacker News

Insurance companies aren't the main villain of the U.S. health system

by NullHypothesist on 12/9/24, 10:10 PM with 3 comments

• by toomuchtodo on 12/9/24, 10:13 PM

  > You can see that the company’s net income — i.e., its total profit — was $23.1 billion in 2023. That’s a lot of money, but it pales in comparison to the $241.9 billion that the company spent on medical costs.2 Even the company’s $54.6 billion in operating costs — of which Brian Thompson’s own $10 million salary represented 0.018% — are dwarfed by actual medical costs.

  > What does this mean? It means that if UnitedHealth Group decided to donate every single dollar of its profit to buying Americans more health care, it would only be able to pay for about 9.3% more health care than it’s already paying for. If it donated all of its executives’ salaries to the effort, it would not be much more than that.

  Than is still tens of billions of dollars and a material amount of care being diverted to comp and shareholder returns.

  > But when we look at United Health Group’s operating costs in the diagram above, they’re only 22.6% of the actual cost of medical care.

  Only! That’s between 1/4th and 1/5th of total costs!

  The need to eliminate for-profit health insurance companies and implement cost controls (as mentioned at the bottom of the piece) can both be true.

• by legitster on 12/9/24, 10:36 PM

  I cannot second this enough. Nearly every case of bilking I have experienced from healthcare has come from the providers:

  - My insurance was billed 300k for our first child's birth because the hospital decided to bill my wife's emergency C-section twice (once for her and once for the child).

  - A dermatologist faked a surgery after my visit so they could get a higher billing code.

  - The hospital promised us services they didn't actually have, then when complications arose, forced us to use their "preferred" ambulance service to transfer. (Whose billing reputation is so bad that our insurance company automatically assigned us an arbitration firm and told us not to pay the bill).

  - Our pediatrician's office just recently swapped our appointment details with another kids with the same first name - whoops! I had to call and unscramble the billing codes for them.

  Insurance companies are powerless - they are legally obligated to respond to the billing codes provided to them. And they live in a competitive market, unlike the hospitals that have legally enforced monopolies.

  American healthcare is messed up, but part of the reason it is messed up is that the incentives are screwed up and your insurance provider is the only advocate for cost reform.