Health insurers/PBMs

[rogermunibond]

Are the Republicans really going to back Direct Payment for providers, eliminating PBMs in formularies, etc. Dr. Oz discussed this is at an AMA meeting back in November.

 

 

[Cod Liver Oil]

It is an epically bad idea to have a profit taking enterprise between consumers and healthcare providers.  The incentive structure is totally perverse; both doctors and patients are, of course, miserable. Crappy health outcomes and unrealistic costs erode American morale. Sorry to be Debby Downer but this is a bitch in our system.

Edited December 16, 2025 by Cod Liver Oil

[dwy000]

20 minutes ago, Cod Liver Oil said:

It is an epically bad idea to have a profit taking enterprise between consumers and healthcare providers.  The incentive structure is totally perverse; both doctors and patients are, of course, miserable. Crappy health outcomes and unrealistic costs erode American morale. Sorry to be Debby Downer but this is a bitch in our system.

This. Everyone loves to hate on the health insurers but they are the only ones who are actively trying to reduce excess costs and unnecessary spend. 

[dwy000]

Oh there's plenty of blame to go round. But every time I go online the insurers take all the blame like making them non profit will suddenly cut health costs in half. And its sooo wrong. 

[Spekulatius]

7 minutes ago, Cod Liver Oil said:

@dwy000 you must not be a user of our system. It is tuned to optimally frustrate everyone involved. If anyone wants to share their happy experiences with it, please do. 

Try to do with and without health insurer and let us know what works better for you.

[Spekulatius]

14 minutes ago, dwy000 said:

Oh there's plenty of blame to go round. But every time I go online the insurers take all the blame like making them non profit will suddenly cut health costs in half. And its sooo wrong. 

The health care providers deserve much more blame than the insurers.  Margins and salaries don’t lie. For example, Atrium Health care is not a for profit organization:

https://www.northcarolinahealthnews.org/2025/11/28/gene-woods-ceo-atrium-advocate-49-perecnt-pay-boost/
 

Staff got 2-2.5%.

 

 

 

Edited December 16, 2025 by Spekulatius

[Cod Liver Oil]

@Spekulatius having no health insurance is not a realistic option either. But having an intermediary which is in direct conflict with both the customer and the provider makes no structural sense. The problem is big enough that Buffett and Bezos tried to tackle it and gave up after a couple of years. As a thought exercise, I invite you, @Gregmal, @Parsad, @Marco Van Basten, @Luke and @MMM20 to help design a schematic which is less bad.  It's a glowing red low bar, but I bet we could do better. DM me if you want to try. 

Edited December 16, 2025 by Cod Liver Oil

[DooDiligence]

Pharmacy benefit management seems like it would be a normal business function for an insurer. Doesn't matter whether the insurance company is the actual payer, or is working under contract for a self insured business. They have the data to determine efficacy, negotiate prices and create formularies. The current administration wants to eliminate PBM's? Does this mean that insurance companies will have to vaporize a business function?

 

As a Novo Nordisk shareholder, I hate to say it, but the problem seems to be that 80% of prescription drug spend goes into 20% of prescription volume (branded), while 20% of spend goes into 80% of prescription volume (generics). It's going to be a delicate balancing act to allow the pharmaceutical industry to make a profit and continue innovating. Patent thickets are likely to be weakened and margins are going to be challenged. Big pharma needs to get competitive with their own generic programs.

[nsx5200]

This has been mostly 'solved' by a parallel system known as medicare, a single payer system.  There is simply not enough political will to apply it to everyone.  Obamacare is the closest we've gotten so far.

 

For those that wants to nitpick, yes, there are room for improvement but it's worlds better than our current system.

[Marco Van Basten]

3 hours ago, dwy000 said:

This. Everyone loves to hate on the health insurers but they are the only ones who are actively trying to reduce excess costs and unnecessary spend. 

No, what they do is force people to buy insurance.  I have surgery and I pay cash?  Hospital charges $40K.  I have surgery and I have insurance, insurance says no the bill has to be $10K, and insurance pays $8K and I pay $2k.  @Cod Liver Oil, First thing that I would mandate is that every hospital publicly lists all of their prices for each and every service, and charges everyone the same price.  

[Cod Liver Oil]

Pricing obfuscation is a feature, not a bug of the conflicted incentive structure.

[Gregmal]

It’s all really simple. The second you try to make something one size fits all for everyone you fuck it up. Regulation strangles innovation. The government makes sure there’s fraud and waste by inserting itself. 
 

Nip Tuck style would work just fine. You want something done? You pick your service, your doctor, and agree on price. Just like everything else….

[dwy000]

54 minutes ago, Marco Van Basten said:

No, what they do is force people to buy insurance.  I have surgery and I pay cash?  Hospital charges $40K.  I have surgery and I have insurance, insurance says no the bill has to be $10K, and insurance pays $8K and I pay $2k.  @Cod Liver Oil, First thing that I would mandate is that every hospital publicly lists all of their prices for each and every service, and charges everyone the same price.  

How is that forcing you to have insurance?  It looks like having insurance just saved you $38000!

 

The real question should be why the hospital is charging $40k for a surgery.

 

Public list prices are nice but what are you going to do when you have a car crash or heart attack, call around and price shop?

[Marco Van Basten]

2 hours ago, dwy000 said:

How is that forcing you to have insurance?  It looks like having insurance just saved you $38000!

 

The real question should be why the hospital is charging $40k for a surgery.

 

Public list prices are nice but what are you going to do when you have a car crash or heart attack, call around and price shop?

Not if that insurance costs me $50K a year.  Price transparency will force price reductions.  

Edited December 17, 2025 by Marco Van Basten

[dwy000]

9 minutes ago, Marco Van Basten said:

Not if that insurance costs me $50K a year.  Price transparency will force price reductions.  

According to the NAIC, the entire US health insurance industry had profit margin of less than 1% last year.  You are paying $50k in insurance because surgeries cost $40k not because there's no price transparency. 

[LC]

5 hours ago, Cod Liver Oil said:

@Spekulatius having no health insurance is not a realistic option either. But having an intermediary which is in direct conflict with both the customer and the provider makes no structural sense. The problem is big enough that Buffett and Bezos tried to tackle it and gave up after a couple of years. As a thought exercise, I invite you, @Gregmal, @Parsad, @Marco Van Basten, @Luke and @MMM20 to help design a schematic which is less bad.  It's a glowing red low bar, but I bet we could do better. DM me if you want to try. 

 

One potential solution: We need more doctors in the system. So lower the bar to train doctors.

[dwy000]

21 minutes ago, LC said:

 

One potential solution: We need more doctors in the system. So lower the bar to train doctors.

I think it goes beyond that. Having health care provided by people and companies who are incentived to make money off of people who dont understand the treatments and are often in no position to negotiate or price shop is just a system fraught with disaster. 

[LC]

I agree, I figure flood the market with supply and also reduce malpractice awards...drive the costs down and make it so cheap to provide care that insurance does not have a chokehold on the industry. If that doesn't work, you need regulation  

[Luke]

I think a base layer of care should be set by the government that is accessible to everyone regardless of job situation. This only covers emergencies and life threatening care. Routine visits should be paid out of pocket by a fund you have that is paid by your wage similar to whats going on in singapore to make healthcare consumers price conscious. Private insurance should only exist at the extra level of care - care that is not proven effective yet, extra luxury rooms, alternative treatments etc. This maintains some budget for RnD and pharmaceutical innovation while presevering a healthy workforce and demand for goods. So yeah, the US system is dysfunctional and we need to take the best from countries like the netherlands, singapore and northern european countries whil adding a small private insurance layer on top. This is my personal political belief, i live in a country where healthcare is mandatory and guaranteed also to jobless types and it is relatively affordable. 

Edited December 17, 2025 by Luke

[DooDiligence]

You used to be able to get your appendix taken out by a barber for next to nothing.

[Marco Van Basten]

10 hours ago, LC said:

 

One potential solution: We need more doctors in the system. So lower the bar to train doctors.

You don't need to lower the bar.  What you need is more medical schools, the number of doctors who graduate from US medical schools has not changed in 80 years while the population has tripled and aged.  

[Cod Liver Oil]

My understanding is that nurse practitioners can address 75% of common medical issues. 

[Gregmal]

28 minutes ago, Cod Liver Oil said:

My understanding is that nurse practitioners can address 75% of common medical issues. 

Yup. $100-200 a visit straight cash. 

[dwy000]

39 minutes ago, Cod Liver Oil said:

My understanding is that nurse practitioners can address 75% of common medical issues. 

Hence the rise of all the Urgent Care clinics too.  No need to go to emergency room (unless its a real emergency) and no need to book a GP visit if its something you want looked at quickly.  

 

All of this goes to the supply increase which is expected when prices are through the roof and demand is high.  

 

Ultimately its the disconnect between consumers, providers and the payers who have to bridge the other two. 

[rogermunibond]

Nothing against NPs, but the whole expanded scope of practice thing is largely to preserve doctor pay/scarcity.  We don't need more NPs, but need more MDs providing primary care.