Only if you ignore value.
Can you elaborate?
Yeah.
Like- I have heart failure. I have some choices. I can continue with treatment or just go about my own.
If I decide to go on my own, it will save a lot of money. Virtually zero cost. Also very little value. Probably none.
If I follow the Drās orders, take my meds, and show up for appointments its gonna (it does) cost a pretty penny, but my quality and quantity of life will be much greater.
Real life example- A woman I knowās husband had a much less severe heart attack than mine. Went to the same hospital, even treated accutely by the same Dr. But he decided to go on his own. Didnāt like or want the copays, denial of condition etc. But there he went.
Five years later, Iām doing ok. Canāt really complain.
Five years later- he has been dead for 3 years.
Value. Drs. Arent just cost. They bring value. To the people they treat and the insurers they participate with.
How many policies would an insurer sell if the bottom line/up front stated āWe do not cover X Y or Z.ā. For the sake of practicality lets say thats Cardiology, Cancer Treatment, or Diabetes.
Thereās value. Insurers donāt dangle the big 3 as loss leaders.
Looking only at cost is looking at only one factor of a much bigger equation.
Gotcha. Sure quality of care is important, and it comes with cost. You get what you pay for. I still donāt understand how this changes the dynamic. The money has to come from somewhere, and healthcare systems earn profit too recycling back in to the broader conversation.
The āvalueā of insurance is always speculative, whether it is health, home or auto.
Ideally, it is money that goes completely down the drain without ever needing to file a claim against your insurance policy.
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Yes, itās proactive risk mitigation. To @SkyzykS point there are many overlapping points at play, but at the end of the day insurance exists to offset healthcare costs. As an optional service.
If insurers didnāt cover these things, they wouldnāt sell policies.
This is true. Maybe I didnāt read for context and Iāll go back through later, but the cost of insurance to cover those things is directly tied to the cost of those things to begin with.
But its not a drain. Its various other financial instruments that are used to make more money, dividends, pockets.
I donāt fault them for optimizing in this regard, but its not a drain.
I had heard insurance explained that you are betting that you will get sick, they are betting that you wonāt get sick, and youāre hoping they win the bet
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Bingo.
With the added factor that they have all the stats that show the probability of your getting sick, and can price accordingly. (actuarial science)
Theyāre pretty heavily invested in a mix of stocks, bonds and treasury bills, usually the lower risk stuff as it all recycles back to the regulated ratios they manage, and frankly on a tight rope. Itās all part of the managed revenue.
Yeah. I used to get updates on that stuff when I owned a bunch of shares of AIG.
The money people pays goes into many other things, increasing in value. The real profit is derived from these funds and their yield, not the amount people pay monthly.
Absolutely. If they donāt do it, the amount they would have to charge would cost almost as much as healthcare itself.
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Iāve heard it explained (didnāt research myself) that Obama"Care" mandates a certain percentage payout of premiums received. So two things -one, the only way they make more money is by having more customers (i.e. keeping more people sickā¦); two, a sick personās request might, just might, be analyzed through the lens of where a particular "health"care provider might be in terms of their % payout situation if that makes any sense (and admittedly pure speculation on my part).
Three, premiums go up 5x - 12x what they were.
Iāve paid cash for a lot of stuff earlier in life. Most doctors & dentists actually really appreciated it. Theyād give a huge break on the price.
āRising tide lifts all ships, from a different dimensionā.
Increasing the money available increases prices. The cost rises to meet what the market will bear. So, by growing the industry/hybrid of healthcare insurance and creating a much āhigher tideā the price is one of the ships being lifted. Now we have insurers battling providers for trillions instead of billions, and the only real avenue providers have to those trillions is through the billing department.
Four, doctors care less and less because itās all about volume of care, since quality of care is now irrelevant to āthe systemā.
Absolutely.
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