Explain like I’m European.
In: Other
There are a few things most posters left out.
Insurance companies have a whole lot of policies which drive up costs. First, they insist on getting discounts, but because hospitals can’t afford to (or don’t want to) discount from the real prices, this creates fake inflated prices that are often listed on bills as the official cost. But insurance companies don’t pay this much. And people who pay for healthcare without insurance normally don’t pay this either. A lot of the numbers we see for healthcare don’t really exist.
Then there’s a rule for insurance companies called the 80/20 rule. Insurance companies are legally obligated to spend 80% of the money they take in on actual healthcare. Their overhead, advertising and importantly- profit, needs to come out of the remaining 20%. So it actually benefits them to keep costs high. That allows them to justify high premiums, so the total pie is bigger, so that 20% that they don’t have to spend on medical care is bigger. They don’t set the prices directly, but they’re the main buyer, and hospitals receiving money aren’t going to complain the price is too high.
And finally, the poor and uninsured. Hospitals must treat people who come in with emergencies, regardless of their ability to pay. And a fair amount simply can’t. But they use doctor time that has to be paid for, supplies that have to be paid for, a share of machine time and expert time etc. Because the hospital knows they’ll never get paid for all those things, they have to distribute the costs associated with those services to their general overhead, which is part of every other charge.
You see, by refusing to provide universal coverage, the US creates a situation where we all have to pay for poor people’s healthcare anyway. But we pay when they’ve put off going to the hospital until it’s an emergency and much more expensive for all of us, and the poor people end up with much worse health outcomes because they waited and can’t afford followup care. And they die in debt so their whole family is wiped out. If we paid for simple coverage for all, like most developed countries, it would almost certainly cost us less when you factor everything in.
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