With the horrible reputation US insurance gets, is there some reason why smaller insurance companies aren't popping up to deliver better quality (i.e. less denials)? Is the field simply heavily protected by lobbying and regulatory capture?
In addition to the other responses, I'd add that I don't believe the "free market" adequately incentivizes insurance companies to "deliver better quality". If it did, I don't know that we would've seen a collective, "Oh, yeah, we get it," response to the recent shooting.
My faith in things is so entirely shot that if I saw a company like the one you suggested, my immediate, heels-dug-in assumption would be, "That's cute, and in five years they'll be just like the rest of them".
Well there is also the fact the calling the US healthcare market a "free market" stretches the term beyond all comprehension.
Due to a weird, historic tax incentive, people get mostly get insurance through their employers. Their interests are not in opposition to, but are still different than those of the people actually being insured. So you have a situation where the people doing the insurance "shopping" aren't the ones using the insurance.
Then on the actual healthcare side, for no coherent reason, almost all prices are hidden from the patient, totally inscrutable, or highly variable. Providers and insurers collude to keep these prices astronomically high so the providers they can overcharge medicare (which is not allowed to negotiate prices) and the insurers can "give" their customers "negotiated prices."
A more normal free market would be something like: people buy their own insurance or pay providers out of pocket. This would incentivize people to make price conscious decisions and evaluate insurers and providers for quality. Providers would need be required to set and publish fixed prices for different procedures and services so the market could actually function, but this seems pretty simple.
Systems drive human behavior and determine human performance. Individual exceptionalism doesn't scale. The default of course is ineptitude, which is why it's so important to design systems that yield exceptionalism.
In the case of healthcare I don't think we are capable of building a system this large, prescribing every detail, while getting it right. It's like trying to plan an economy.
> why smaller insurance companies aren't popping up to deliver better quality
I am no expert, but my impression is that it would be very hard for the insurer's customers (e.g. employers) to know an insurer was better, and many might not care. There's so much opaqueness and indirection in the system, it's not surprising it's both inefficient and heartless.
That said, all systems ration in some way or another. We need to come to grips with that.
Probably a combination of heavily regulated, the lack of choice for employer provided plans, and the difficulty in building out a network of doctors and other facilities. Would you sign up for an upstart health insurance with a tiny network?
If those providers were local to where I live and I don't travel much or at all, yes I would - if I were an American that is. I'm a Dutchman living in Sweden so I'm used to two totally different systems.
Insurance is made in the margins of charging a healthy population more than you will use for them in the year. The reason "Single-Payer" is "the answer" to everyone's woes, is that in order to make anything close to a reasonable amount of money on insurance you need to have an actual population to insure. This typically works because insurance companies are big.
This also means that any new insurance company needs to pick up a ton of customers. This is really hard to get off the ground in a way that will make you money. You would ideally pick up a healthy population (younger folks), and then you'd have to get lucky on your actuarial tables for the population of people you pick up insurance plans for.
like all the other capitlism things, monopolies drive the wheel, and because no one typically shops for it but rather has to take whatever companies give them.
Because insurance is one of the most nakedly capitalist business models around. The goal of of insurance companies is to make as much profit as possible by paying out as few claims as possible.
jjulius|1 year ago
My faith in things is so entirely shot that if I saw a company like the one you suggested, my immediate, heels-dug-in assumption would be, "That's cute, and in five years they'll be just like the rest of them".
jaredklewis|1 year ago
Due to a weird, historic tax incentive, people get mostly get insurance through their employers. Their interests are not in opposition to, but are still different than those of the people actually being insured. So you have a situation where the people doing the insurance "shopping" aren't the ones using the insurance.
Then on the actual healthcare side, for no coherent reason, almost all prices are hidden from the patient, totally inscrutable, or highly variable. Providers and insurers collude to keep these prices astronomically high so the providers they can overcharge medicare (which is not allowed to negotiate prices) and the insurers can "give" their customers "negotiated prices."
A more normal free market would be something like: people buy their own insurance or pay providers out of pocket. This would incentivize people to make price conscious decisions and evaluate insurers and providers for quality. Providers would need be required to set and publish fixed prices for different procedures and services so the market could actually function, but this seems pretty simple.
datavirtue|1 year ago
In the case of healthcare I don't think we are capable of building a system this large, prescribing every detail, while getting it right. It's like trying to plan an economy.
getnormality|1 year ago
I am no expert, but my impression is that it would be very hard for the insurer's customers (e.g. employers) to know an insurer was better, and many might not care. There's so much opaqueness and indirection in the system, it's not surprising it's both inefficient and heartless.
That said, all systems ration in some way or another. We need to come to grips with that.
yencabulator|1 year ago
bragr|1 year ago
hagbard_c|1 year ago
KittenInABox|1 year ago
buffington|1 year ago
xracy|1 year ago
This also means that any new insurance company needs to pick up a ton of customers. This is really hard to get off the ground in a way that will make you money. You would ideally pick up a healthy population (younger folks), and then you'd have to get lucky on your actuarial tables for the population of people you pick up insurance plans for.
cyanydeez|1 year ago
krapp|1 year ago