Anthem (BCBS) likely to pull out of ACA markets in 2018

[travelover]

I've noticed that veterinarians are pushing pet health insurance. That can't be good for pet care costs.

 

[NW-Bound]

I just recall a song from decades ago.

 

[MichaelB]

"The cost of health care is high because insurance is there to pay it" and "The cost of insurance is high because healthcare is expensive" is circular reasoning. There is no attribution here, just a simple correlation.

 

[Chuckanut]

"The cost of health care is high because insurance is there to pay it" and "The cost of insurance is high because healthcare is expensive" is circular reasoning. There is no attribution here, just a simple correlation.

I would argue that it is a feed back loop gone wild.

 

[MichaelB]

The most comprehensive study I've seen on the cost of healthcare in the US is still the McKinsey Global Institute "Accounting for the cost of US health care: A new look at why Americans spend more " (here). Even though it's dated (from '08), the only change is that US healthcare is now even more expensive. Their conclusions point to many different factors driving up the cost, such as lifestyle, defensive medicine, legal costs, overuse, but the single biggest driver of cost differential is price, after accounting for all other factors.

In other developed OECD countries, the pricing of healthcare services is regulated, there is a greater supply of practitioners, and prices are cost based. In the US, there are fewer licensed physicians and healthcare prices are not cost based, they are value based (what's it worth to you). This is brutally evident in pharmaceutical pricing.

This is a critical difference, because value based pricing has no upper limit. This is easily observed in hospital pricing, which has become almost entirely unrelated to the cost of care. For any given stay, a hospital bill is a list of everything they are able to charge for, applying prices that are entirely unrelated to the cost of the service and what they eventually expect to collect. In other words, hospitals are revenue generating machines with cost centers, instead of care centers.

In other words, the cost of healthcare in the US is likely to continue to increase at a rate higher than GDP, inflation, and OECD average.

 

[samclem]

The price of health >insurance< in the ACA marketplaces is cost-based (or at least capped by the underlying loss ratio), and yet this has done little to stem the increases in price. Obviously, this is because the "cost" of what the insurance companies are buying keeps escalating (and, arguably, they have zero incentive to stop the escalation, since in many cases their profits are a % of these ever-increasing costs).

If we had "cost based" medical care, "somebody" would need to cap the costs of everything (otherwise we'd have exactly the same situation as we have today with health insurance--costs rise because the market will pay it). That "somebody" would need to determine what a doctor should be paid, how much an MRI machine should cost, what the proper wait times should be for a knee replacement, etc. Those types of top-down global price controls, wherever we see them, help assure scarcity and impede innovation. Real competition (which >can< be applied to health care, in a properly designed system) reduces prices while improving quality.

 

[MichaelB]

The price of health >insurance< in the ACA marketplaces is cost-based (or at least capped by the underlying loss ratio), and yet this has done little to stem the increases in price. Obviously, this is because the "cost" of what the insurance companies are buying keeps escalating (and, arguably, they have zero incentive to stop the escalation, since in many cases their profits are a % of these ever-increasing costs).
If we had "cost based" medical care, "somebody" would need to cap the costs (otherwise we'd have exactly the same situation as we have today with health insurance--costs rise because the market will pay it). That "somebody" would need to determine what a doctor should be paid, how much an MRI machine should cost, what the proper wait times should be for a knee replacement, etc. Those types of top-down global price controls, wherever we see them, help assure scarcity and impede innovation. Real competition (which >can< be applied to health care, in a properly designed system) reduces prices while improving quality.

Samclem, I agree with almost everything you wrote.

 

[joeea]

You can go North young man, go North....

You can go as far north as Massachusetts. More than one provider in our plans.

Of course we had RomneyCare before the rest of the country got the ACA.