How often do health insurers say no to patients? (2023)

The threatened “death panels” we heard about when ACA was being debated are actually employees of insurers who decide what they’re not going to pay for.

I was raised a die-hard capitalist and in many ways still am. When it comes to healthcare these days, I’m somewhere to the left of Marx. What we have now is a failed system. It simply does not work. The turnip has been squeezed and there’s no blood left to wring from it.

There’s no reason why this system has to exist. We can make it better any time we want.

I would like to see #1 tried but at this point I’ll gladly accept #2

The employees of the managed care organization are often just using the criteria of the payer (often times the federal or state government for Medicaid/Medicare/federal employee or other large self funded plans).

The US government leaders are in a good spot. They get the managed care organizations (MCOs) to take the heat for denying coverage, while setting the rules to deny the coverage. MCOs even get audited and fined for approvals that don’t meet criteria.

In any case, all systems with limited resources will have to have someone approving or denying payments, whether it be a government employee or someone contracted out by the government.

But the most salient metric here is all the MCOs earn only 2% to 3% profit margins. And their market caps are tiny, and returns abysmal. (Except UNH, but that is due to its significant provider and software business).

Blame MCO employees all you want, but you will be doing exactly what government leaders want you to do.

It is not at all surprising that capitalism fails miserably here, IMO.

The key insight, though, is that this is fundamentally unavoidable. Someone, somewhere has to decide how a limited healthcare budget will be allocated among all the various healthcare it could go towards.

You and I agree that it would be best to have a system where this is never the patient's problem. Someone determines a standard of care that will achieve the best patient results with the resources available, and then any patient can get whatever treatment's best for them within that framework. That's why I have and recommend Kaiser, they do a good job of presenting that abstraction.

Other people are terrified of the idea of having the standard of care determined by some centralized committee, because what if they decide a treatment that my doctor and I like isn't appropriate? I think the fear is wrong, to be clear, but it's genuine and does deserve to be addressed. Thus all the promises about "if you like your plan you can keep your plan".

(A third group of people believe that healthcare is only limited because of shenanigans, and with the appropriate reforms we could build a system where anyone is entitled to any treatment that might reasonably help them. I'm never quite sure what to tell them, since I don't think that's true but I don't know how to prove it beyond the lack of examples.)

The system is broken. It’s useless to extrapolate how things might work based on their current functionality. It doesn’t have to be like this. Everywhere else in the world manages it better than we do, and we’re not special snowflakes who require some hellish mashup out of Cyberpunk 2077 to take our kids to the doctor.

Because why would you ever only rely on some vague "US claims" instead of looking at reality?

> can’t search for my preferred cardiologist when I’m having a heart attack.

You can't search for your preferred mechanics when your breaks failed on a highway.

Yet somehow that didn't kill the competitive marketplace.

Meanwhile, this is the only heart I have, and if it’s in danger of stopping, I have approximately seconds to call 911 to get someone to come take me to the repair shop of their choosing.

Naturally, hospitals also wants prices to be higher so they can earn more money.

I would expect this dynamic to play out whenever all the buyers in the marketplace are insurance companies.

For a market to work, the buyers have to be exercising their discretion. But most health insurance in the US is provided through employers (whose interests are different from those of the employees). There are a thousand other ways that the US healthcare markets are not free or poorly designed, but this is the original sin that (I would argue) causes most of the issues: the insured don’t choose their insurer, so the insurers are not competing for members, they’re competing for employers.

See Singapore for a place that actually tried. They have a public healthcare but also a well functioning private healthcare market.

These don't preclude a free market working well. For instance, they're all apt descriptors of me when I find myself needing an Uber home. I'm not completely inelastic, since I could take a series of long bus rides to get home, or walk, but accepting for the sake of argument those aren't life-threatening, the cab companies more or less have me over a barrel. Or do they? We all know what keeps them from charging me more they do, even given the time sensitivity, lack of prediction, or inelasticity. It's competition.

The USA system doesn't work well, and I'm not necessarily saying that free market is the right solution, just pushing back on the notion that just because a good meets those criterion we are forced to throw our hands up and say the free market could never provide that.

I’ve tried on numerous occasions to get pricing quotes for healthcare both paying fully out of pocket, and for getting an estimate for what I’ll be left covering after insurance negotiates ads pays their part.

In every attempt I get absolutely nowhere price estimate-wise and wind get this or that procedure done just hoping and praying that the ultimate bill will be remotely reasonable

We’re so far off the mark for having a healthy marketplace for healthcare pricing that I just can’t see considering it dysfunctional to itself be an appeal to some purity.

Perhaps one might argue that a formerly functional healthcare pricing system will inevitably degenerate into this robber Baron situation that we’ve got currently, but otherwise I don’t see the no true Scotsman.

Arguing against any attempt at competitive healthcare pricing because medical emergencies exist is a bit throwing the baby out with the bath water.

There is no emphasis on long term planning or prevention.

Everyone is grabbing with both hands.

If that were true, why do people come to get health care in the US? (Because we have better healthcare and it’s free if you don’t have money or aren’t a citizen.)

I know that most nights I am going to want to sleep in my own bed, this is somewhat inelastic sure, but not a surprise. The apps can’t raise prices too much however because they are in competition with us making plans to use the bus or call a friend. There is not a good equivalent in the medical world, it’s webmd and herbal compresses versus licensed doctors and prescription only drugs, with your life on the line.

Most health care is not like this. Most health care is fairly routine: periodic physical exams and checkups, or getting evaluated when you have cold or flu symptoms. These sorts of things are much better provided for in a free market.

It's true that, if you have an emergency, it's probably not something that could have been forecast, and you don't have much of a choice about what care you need. That is indeed the sort of situation that insurance is intended for. But what we call "health insurance" isn't limited to those things. It also covers everything else--all the stuff above that isn't unpredictable or time sensitive. The result is a mess.

I don't know that "the US" has actually claimed this, but in any case any such claim is false. There are lots of reasons for that, but the key one is simple: the people getting care, patients, don't know how much it costs. You can't have a free market if the person receiving a good or service doesn't know the cost of what they're getting, and so can't judge whether what they're getting is worth what it costs.