As I said elsewhere, insurers are legally required to spend no more than 20% on overhead. Profit margins run about 3% on a good year. The other 80% is required to be spent on actual medical care; doctors, hospitals, pharmaceuticals. If in a given year it turns out that the overall medical costs for an insurer were less than 80% of their premium charges, the insurers are required to refund the excess to the members who paid them. This is a regulation which is stringently enforced. If you’ve ever looked inside the insurer industry, it’s not a wealthy business. CEOs can make a bundle, though not by corporate giant standards, but in general salaries are low, and so are perks. Ironically, employees of insurers don’t get the most generous insurance plans. Those go to giant clients and unions. If you want to see a business with big overhead and big profits, that’s the pharmaceutical business. But in contrast to the relatively stable insurance business, pharmaceuticals are a very risky business, and people wouldn’t invest in it if they got the same return as the low risk 3% of insurers; so pharmaceuticals typically run a 20-25% profit margin. That’s profit, not overhead. As always, higher risk, higher return.
Indeed. And there’s a degree of uncertainty; it’s better now that a lot more electronic communication has been implemented, but it used to be a medical provider couldn’t be sure of getting paid for any procedure. They have to account for that in their charges.
Even at the time he said it, I didn’t expect he meant that if your company decided it didn’t want to sell that product, the government would step in and force the company to. I’d be surprised that you’d want that kind of government dictating your healthcare.
I also didn’t expect he meant you could keep your plan if the company went broke, or if you moved to Australia, or if you went to jail, or if you died. Now I know why hair driers have to say “do not use in shower”. you just can’t count on common sense being common…
When I look at that I see a strong incentive for insurers to pressure the country into having the most expensive healthcare possible, since their absolute profits are proportional to the cost of healthcare. Conversely I would think that a public system would have a strong incentive (and capability) to pressure the healthcare industry into delivering greater value at a lower cost.
Yeah, all the studies show maybe a 5% increase for malpractice and defensive medicine. We don’t really want doctors to stop being extra careful if they are free from lawsuits.
In Canada, btw, malpractice suits are a real minor issue. Since medical costs are covered by the same plan no matter what, there is no need to sue for medical costs, whereas in the US, for instance if you have a baby delivered with serious birth defects and are looking at a lifetime of high medical bills, you’re going to be motivated to sue the doctor, and will probably actually convince yourself it’s his fault, rather than lose your house, your life savings, and your other kids’ college funds. And they don’t allow malpractice suits for mental anguish or punitive awards, so all that leaves is suits for actual costs, such as lost wages or having to buy a handicapped van or such; and since this is relatively small financially speaking and the cases are usually pretty clear cut rather than fishing expeditions, they are usually just settled without court.
There is still a 2 to 1 difference in non-administrative per capita costs between your country and mine. The numbers you are running here don’t do a very good job of explaining it.
It is not a different topic at all. If the doctor is told that henceforth s/he’ll be paid for every single patient at the Medi-Cal rate, what do you think will happen?
oh yeah, i was just talking about the insurance side. elsewhere in the thread we were talking about the paperwork on the provider side of dealing with multiple insurers with differing rules, different forms, different formularies of what drugs they will covet, which can change at any time. plus the uninsured patients, who often pay late or not at all. and this drives the doctors out of private practice into group practice so they can share the costs.
Yes, many insurance companies deny in the very same way. They often take their cues from Medicare.
The difference is that the worst thing an insurance company can do is not pay. Medicare can and will criminally prosecute if a doctor does things for his patient which don’t follow Medicare’s coverage rules. And as I said, my experience is that our physician community believes that template will be carried over to a single payer system.
In fairness, there are some government prosecutions for real fraud against the program and the patients. Here’s an example -
- and I am totally in favor of going after that sort of scum. But that’s very different from punishing a physician for performing a life saving and life enhancing procedure on a patient.
The last time I went to the ER, it cost me $250 after insurance (and I have good insurance). Now, I had a hole in my hand so this was ok but then I have a good job and can afford $250. I know plenty of folks that wouldn’t eat for a month if they had to pay that.
I can also think of quite a few people in my life who would be in the exact same boat…
I’m thinking my younger brother did something like that to his hand about 35 years ago. Of course, getting it cleaned, stitched and dressed didn’t cost a thing, but I suppose the cost of socialised medicine was that a young resident did the cleaning and stitching (under the supervision of an ER internist, of course).
The resident must have been really talented, though:
My brother, while being stitched: Will I be able to play the piano?
Resident: I don’t see any reason why not.
My brother: Excellent! I never could before!
I gather that the internist, once he got over his coughing fit, threatened my brother with bodily harm if he said anything more… The dangers of socialised medicine, you know.
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