alt Hacker News> Unfortunately these discussions almost never go well, because it seems that most people have at best a surface level understanding of what insurance is and how it works, and everyone is convinced that it's a full scam and insurance companies are fabricating everything
I have the exact same experience when discussing anything insurance related: People have wild assumptions about how much profit insurance companies are making.
When I ask people how much cheaper they think their insurance (health, home, etc) would be if we forced insurance company profits to zero they usually have some extreme guess like 50%. When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs they just don’t believe it. The discourse is so cooked that everyone who just assumes insurers are making unbelievable profits without ever checking.
Like you said, when I try to bring numbers into the discussion I get accused of being a shill (or a “bootlicker” if the other person is young).
The environment this creates has opened the door for some really bad politics to intervene in ways that aren’t helpful. I wouldn’t be surprised if the eventual outcome in a lot of these places is that politicians pass legislation putting the local government on the hook for insurance after they squeeze regular insurers so hard they have to back out to avoid losing money in those markets. The consequences won’t manifest for several years, potentially after the politicians have left office, but could be financially burdensome. Similar to how many local governments were very generous with pension plans because politicians knew the consequences would only be felt by their successors.
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> When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs they just don’t believe it.
Meanwhile, the health care providers:
> But if you look at the list of companies with the highest [return on equity], you see health care providers or suppliers like HCA Healthcare (272%), Cencora (234%), Abbvie (84%), Mckesson (84%), Novo Nordisk (72%), Eli Lilly (59%), Amgen (56%), IDEXX Laboratories (53%), Zoetis (46%), Novartis (44%), Edwards Lifesciences (43%), and so on. If you want to know which shareholders are making the real money in the health care industry…well, it’s the shareholders of those providers and suppliers.
* https://www.noahpinion.blog/p/insurance-companies-arent-the-...
> When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs they just don’t believe it.
When you consider that single digit percentages of trillions of dollars is still an obscene amount of money it makes sense. People making tens of billions by applying formulas to spreadsheets and shuffling other people’s money around doesn’t sit right with most people.
The profit margin doesn't include things like CEO salary, correct? I could see a scenario where the issue is still corporate greed just not greed that's measured by profit.
>When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs
Do you have any source for this?
I’m assuming (because HN) that you had the USA in mind, and it doesn’t pass the sniff test for me given that US insurance fees are more than single digit percentages higher than other high quality care countries with privatised healthcare systems
When you point out that, for example, health insurance profits are low
single digit percentage of overall healthcare costs they just don’t
believe it.
You ever think it's curious that for-profit insurance companies pay out 2–3x what Medicare does for the same procedures?
You do realize health insurers have federally mandated caps on their profits, which simply incentivizes creative accounting to make money in more oblique ways, right?
>When you point out that, for example, health insurance profits are low single digit percentage of overall healthcare costs they just don’t believe it.
It's not that I don't believe it, it's that this figure is completely unrelated to the damage and waste caused by the system of healthcare and health insurance we have in the US.
I mean, in a system of chattel slavery, you see above-normal profits competed away, but that in no way means the system isn't exploiting anyone, because that's not how the harm shows up! And yet still we'd see that argument get batted around in comments like yours:
"No, your owner can't possibly be exploiting you because, when you consider your purchase cost, he doesn't actually make much profit!"
Health Insurance IS a huge racket. Insurance profits are only a small slice. Executive compensation isn't part of profits. The profits of the required sole source medical supplies company isn't part of insurance profits. The contracts, salaries, benefit packages, overpayments, and waste of healthcare systems and pharmaceutical companies aren't reflected in insurance profits. Just looking at the raw profit percentages returned to shareholders is absolutely meaningless.
You have to look at the entire healthcare picture and realize that insurance is the system driving the exorbitant costs. There is no legitimate reason for healthcare prices to be so insane.
Health insurance's issue is probably how it induces pure waste everywhere as everyone has to play this dance of ever escalating paperwork which consumes a lot of labor. It's not profit, it's waste. Same with the ever increasing amount of admin. Why is that admin increasing? I estimate insurance or requirements created by insurance is part of the cause.
There is also a lot of other smells of a lack of a competitive market. Very opaque pricing, limits to how many hospitals can be opened in a region, needing paperwork to push against that limit, limits in residency slots, the entire hazing ritual of residency in the first place, limits in opening medical schools, ever escalating requirements to become a doctor, restrictions against doctor owned hospitals or clinics, the fact something like an epipen is still not out of patent and not having many clones by now, large barriers to make medical devices and medications, while simultaneously having great issues with generic drug quality, a horrible food system compared to Europe, while simultaneously having a much harder regulatory state medically compared to europe, etc.