Most active commenters
  • estearum(5)
  • frollogaston(4)

←back to thread

US cities pay too much for buses

(www.bloomberg.com)
355 points pavel_lishin | 14 comments | 26 Sep 25 13:57 UTC | HN request time: 1.411s | source | bottom
Show context
RobKohr ◴[26 Sep 25 19:11 UTC] No.45389953[source]▶
"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder."

Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing.

Kinda like how expensive healthcare is since it is paid for by insurance.

Or how you don't care how much you put on your plate or what you choose to eat at an all you can eat buffet.

The second you detach the consumer from the price of something, even through an intermediary such as health insurance, that is when they stop caring about how much something costs, and so the price jumps.

replies(20): >>45390099 #>>45390102 #>>45390229 #>>45390477 #>>45390502 #>>45391244 #>>45391491 #>>45391504 #>>45391644 #>>45392090 #>>45392563 #>>45392764 #>>45393765 #>>45393899 #>>45394500 #>>45394523 #>>45394762 #>>45396032 #>>45396171 #>>45414686 #
frollogaston ◴[26 Sep 25 19:25 UTC] No.45390102[source]▶
Shouldn't insurance care about the pricing though? I get why federal govt isn't sensitive, given 0 competition.
replies(5): >>45390166 #>>45390501 #>>45390566 #>>45390942 #>>45391793 #
SoftTalker ◴[26 Sep 25 19:31 UTC] No.45390166[source]▶
Insurance profit is limited to a percentage of what they pay out. So the more they pay, the more money they make.
replies(3): >>45390267 #>>45390640 #>>45391606 #
1. estearum ◴[26 Sep 25 20:20 UTC] No.45390640[source]▶
Also the largest insurers increasingly own the doctors you’re seeing too.

Also the pharmacy you get your drugs from.

Also the entity that negotiates prices between pharma companies and your insurer.

More healthcare consumption = better, across the board

replies(3): >>45390979 #>>45391447 #>>45392727 #
2. hibikir ◴[26 Sep 25 21:01 UTC] No.45390979[source]▶
Even when it's not the insurer, it's at least a hospital. Many a doctor around me that used to have a private practice sold to one of the hospital chains, as they promised more money than by owning, solely due to superior collective action advantages. A large insurer can bully a private practice into cutting costs, but a hospital network that handles 40% of ERs in the metro area? The insurance company can lose. So everyone makes more money but the people paying insurance.
replies(1): >>45392376 #
3. NooneAtAll3 ◴[26 Sep 25 22:00 UTC] No.45391447[source]▶
> More healthcare consumption = better, across the board

no

more paid money for less healthcare consumed = better for insurence

thus all the declined treatments

replies(2): >>45392571 #>>45393034 #
4. dnissley ◴[27 Sep 25 00:25 UTC] No.45392376[source]▶
On top of that the ACA prevents new physician owned hospitals from being established and placed restrictions on expansions of existing ones
replies(2): >>45392590 #>>45392712 #
5. estearum ◴[27 Sep 25 01:11 UTC] No.45392571[source]▶
Not quite true. If you own the providers, getting people to pay deductibles and copays (i.e. getting treated) will yield way more money than just having them pay premiums.
replies(1): >>45402083 #
6. estearum ◴[27 Sep 25 01:19 UTC] No.45392590{3}[source]▶
To be fair, this is because there's long-standing [but disputed] evidence that healthcare providers drive up costs/utilization when they can refer to hospitals they have equity stakes in.

Messy business!

7. MostlyStable ◴[27 Sep 25 01:54 UTC] No.45392712{3}[source]▶
Are you talking about Certificates of Need? Those have been around for a lot longer than the ACA [0]

[0] https://en.wikipedia.org/wiki/Certificate_of_need#History

8. doctorpangloss ◴[27 Sep 25 01:58 UTC] No.45392727[source]▶
Uh, no… they want to deny claims. The best situation for insurers is that you are healthy for a while, then abruptly die of something that cannot be treated.
replies(2): >>45392809 #>>45432982 #
9. estearum ◴[27 Sep 25 02:20 UTC] No.45392809[source]▶
Uh no, they don't. Not if they're also the ones who provide healthcare. Simply denying claims isn't even remotely close to the financially (and obviously not the politically) optimal strategy.

The optimal strategy if you own both the insurer and the provider is a combination of premiums, copays, deductibles, and maybe even some totally unnecessary care to drive up volume.

Lower margin on dramatically higher volume is still dramatically more money. Lower margin actually provides political cover for your $400 billion revenue years.

10. msandford ◴[27 Sep 25 03:33 UTC] No.45393034[source]▶
The insurers are legally obligated to pay out 80-95% of their premiums for treatment. So the only way to grow profits is to spend 2x and much and charge 2x as much. Sure you only make the same 5-20% margin, but it's on 2x the revenue so it's 2x the gross profits.
11. frollogaston ◴[28 Sep 25 05:54 UTC] No.45402083{3}[source]▶
But undercutting the other insurers/providers should earn you more, if it were competitive, which I guess it's just not
replies(1): >>45404811 #
12. estearum ◴[28 Sep 25 14:58 UTC] No.45404811{4}[source]▶
Correct, which is another reason why they are buying the healthcare providers. It allows the insurers (“pay-viders”) to strong arm independent doctors and smaller insurers out of the market.
replies(1): >>45432913 #
13. frollogaston ◴[01 Oct 25 00:19 UTC] No.45432913{5}[source]▶
Ok, I get it now. No other explanation has made sense so far, it's a cartel.
14. frollogaston ◴[01 Oct 25 00:31 UTC] No.45432982[source]▶
They are accepting claims that are way more expensive than in any other country, so I don't think this is their game