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355 points pavel_lishin | 6 comments | | HN request time: 0.203s | source | bottom
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RobKohr ◴[] 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.

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frollogaston ◴[] No.45390102[source]
Shouldn't insurance care about the pricing though? I get why federal govt isn't sensitive, given 0 competition.
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SoftTalker ◴[] 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.
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estearum ◴[] 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

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1. NooneAtAll3 ◴[] 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

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2. estearum ◴[] 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.
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3. msandford ◴[] 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.
4. frollogaston ◴[] No.45402083[source]
But undercutting the other insurers/providers should earn you more, if it were competitive, which I guess it's just not
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5. estearum ◴[] No.45404811{3}[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.
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6. frollogaston ◴[] No.45432913{4}[source]
Ok, I get it now. No other explanation has made sense so far, it's a cartel.