longerthoughts

IIRC this gets gamed by patterns like refusing to readmit patients following complications to hack low readmission rates and preserve higher reimbursement rates? Feels like so much in healthcare where you have a well-intentioned patch trying to solve deep incentive alignment issues and creating more problems.

Yeah MLRs removed an incentive for payers to fight long run rate increases as long as they can model the risk effectively and pass on the cost to members via premiums, but they still tend to fight rapid increases because they break their models and retroactively misprice existing plans. Otherwise we wouldn't see contentious contracted rate negotiations between commercial insurers and providers, but we do.

Absolutely not here to praise US health insurance companies, but they're not the ones using regional leverage to negotiate higher rates - that's the providers.

Yeah absolutely re regulated profit margins (indirectly through MLRs - their actual margins are way below the cap due to expenses) but that only reinforces my point that providers are having more success growing their margins (on a relative basis, anyway).

Great point on bigger pie increasing both shares. I didn't mean to imply it's zero sum.

Oh the irony of MLRs encouraging insurers to provide terrible service (opex recovery boosts profits) and let providers push fees ever upward (bigger pie, bigger premiums, bigger net profit on constrained margin).

Yeah capitated reimbursement moves the risk but doesn't seem to effectively encourage innovation on care delivery when it's relatively easy to just cut costs at patients' expense because they have no agency and meaningful recourse.

Your criteria for when a market is (not) a good solution seem reasonable. My biggest concern is there's a fundamental problem with scaling labor-driven services that's exacerbated by entrenched interests constraining the labor supply to support wage growth. Care delivery needs to change if you want to fix both cost and quality, and I have a hard time imagining monumental changes to care delivery from a government service. Care will be expensive as long as it's constrained by scarce labor. That means either costs will balloon at the taxpayers' expense, service quality will decline to cut costs, or more likely both.

The way you fix that is either a) dramatically increasing the supply of qualified clinicians, or b) automation. Clinicians don't want more clinicians because it lowers their wages, so it will be fought at every level in the name of patient safety. But they also don't want automation to decouple care from their labor, so automation, too, will be fought at every level in the name of patient safety.

Most of this is opaque to voters who are largely under the impression that it's all health insurance executive greed, so there's not much of a political incentive to impose meaningful changes.

Where's the way out?

>I don't quite get the difference, patients pay a fixed amount for insurance, hospitals charge "fee for service" to the insurance. Both systems coexist, it's not one or the other.

I think their reference to "per capita" here is referring to a capitated payment structure where a provider organization is given a fixed amount per patient up front instead of billing for every service they provide. The software analog would be something like a flat subscription fee vs usage-based billing. While it's not the default in the US, it theoretically encourages providers to provide cost-effective care rather than just racking up bills on unhealthy patients.

The mechanism here is who bears the financial risk. The model you're familiar with is one where the payer (commercial insurance or medicare/medicaid) is the risk-bearing entity. They want more cost-effective care so they can protect their margins while the provider is incentivized to push a high volume of expensive care so they can boost their margins. Don't have it handy but the data on this shows providers are winning this battle with healthier, growing margins vs insurance companies whose margins generally aren't great.

>Observation: Most health insurance policies today, whether they are government or private corporation, national or regional, are based on the idea of paying for medical/health problems AFTER the onset of the health problem...

There's a lot wrong with health insurance in the US but this problem is largely on providers, not payers.

Insurance claims submitted by providers are effectively itemized using standardized Current Procedural Terminology (CPT) codes. Those codes are written by the American Medical Association (AMA), the lobbying group for physicians. Doctors make more money when services are expensive and require a doctor to be involved. As a result, reimbursable services tend to be reactive (i.e. more lucrative), rates have a tendency to go up, and CPT codes tend to favor reimbursing for physician time rather than patient outcomes.

In fact, there's a whole category of preventive health companies (e.g. Virta) that sell to insurers because the insurance companies bear the financial risk and benefit from a healthier member base. Insurers will pay for these programs on their members' behalf and try to get them to enroll so they don't have more expensive problems later. Providers make a lot less money when prevention works.

I don't think it's some grand conspiracy by evil doctors, just incentives gradually reinforcing bad patterns at scale.

>Safety regulations are written in blood. They exist because people died because the industries could not and cannot be trusted to regulate themselves.

This sort of absolutist rhetoric is why people waste so much time arguing against maximal regulation and zero regulation in the abstract, neither of which is actually popular or sane.

Many regulations are good, necessary, and effective. Many of them are short sighted, over-specified, or written by lobbyists against citizens' interests (shouting that rent-seeking and safety regs are mutually exclusive doesn't make it so).

>It categorically does not. It would be foolish to do so.

Foolish hardly implies categorically false. It's a well-documented incentive for other risk-bearing entities (see insurance claim denials). Why are providers under capitated contracts categorically immune to refusing treatment to protect margins?

Completely agree with your characterization of the current system but why does making healthcare a government service necessarily lead to better outcomes vs current state or a more sensibly constrained market?

Seems obviously right in terms of total cost to the median patient (less obvious for individuals in higher tax brackets), so I'm not disputing that. More curious about incentives to improve care delivery for better long-term outcomes.

Meh, I think it's fine for blog posts to assume familiarity like this if it reflects their niche. They're writing for the type of person who already knows what Duet is. It's not the NYT where there's a massive general audience.

In fact, the choice not to explain things tells me a lot about the shared knowledge of a niche when I'm looking in from the outside. I don't mind the extra digging to decode it and the implied familiarity gives me information about its importance.

>Sometimes the time it takes for an order to land on your doorstep is longer than it would have taken for you to drive to the store and pick it up yourself.

This misses the point. One is you devoting your own time and attention to doing the task, the other is delegating it so you can use your time for other things. Some people are going to burn the extra time scrolling (not great), others are going to help their kids with homework or get a workout in.

I'm all for people getting time back even with the downside that not everybody will choose to use it well. If people are choosing brainrot over living well, there's a bigger issue than delivery services.

This can all be true yet people fighting for their lives often feel like they're getting ignored, dismissed, or treated like livestock by their doctors. It's hard to see your doctor as the victim when it's you or somebody you love bearing the cost of their shortcomings.

To your point, it's hard to imagine any human dealing with the conditions a lot of doctors face then showing up the way we want them to all day, every day. But how much suffering are patients supposed to absorb to subsidize the stress budget of their doctors?

I wouldn't go as far as drawing an analogy here, but it reminds me of debates surrounding police violence in high stress situations. Is there a higher standard when you're accountable for other peoples' lives? Are you off the hook or is it on you, and not the people you serve, to fight systemic and situational problems that make it hard for you to do your job well?

The legal and political hurdles here are worse than the technical ones (at least in the US).

Not as familiar with dentistry for but for "AI doctor", FDA needs to either create new categories or approve AI care under medical device and software as a medical device (SaMD) standards, state medical boards need to relax the licensure grip on scope of care, and CMS needs to create new CPT codes (which are largely dictated by the AMA i.e. lobbying group for physicians) so there's a way to bill insurance for AI-provided care.

Unfortunately we have a much better system for maximizing physician wages than minimizing patient cost of care. Doctor demand is guaranteed by frequently tying legal, reimbursable care to physician labor, and doctor supply is limited by the number of available residency slots. Ironically it makes doctors miserable because they're ridiculously overworked due to the excess demand and constrained supply.