The additional overhead is substantial and adds huge marginal cost for routine things and say nothing of the principal-agent problem
What are you implying with this comment?
I generally enjoy reading your comments, as they provide some interesting and often unique insight.
But this one…
Either it’s something I don’t understand, or it has the potential to be incredibly misleading in its implications.
The impact of American insurers on direct costs, indirect costs, and opportunity costs of healthcare is much more than a rounding error. The incentives amongst various actors, with insurers in the middle, are massively misaligned. I’m sure you know this.
Ask patio11 about insurance in Japan. It’s incredibly affordable, it’s quite good, and there are both public and private options. It’s not perfect by any means, but I miss the healthcare options in terms of both cost and quality that I had in Japan.
Normally, price controls would lead to shortages, but with healthcare, there's always shortages with or without price controls and every country has to, in some way or another, ration care anyway.
If you tried to implement that here, doctors would riot (read: use their ridiculously powerful lobby to kill it or get the fee schedule increased - which they did every year for a decade when medicare dared to institute cost controls. see: medicare doc fix).
Sure, it's not the actual insuring that's costing that much but the massive breakdown of incentives from increasingly vertically integrated healthcare companies (some of whom are insurers, some of whom own insurers) owning increasingly large shares of everything is clearly causing cost to spiral. The industry is making work for itself at out expense. Whether that work happens in the insurer's office or the billing office of the clinic that's owned by the insurer isn't really material. And of course everyone in the process gets a cut so they fight for their bit of it. Doctors used to drive the same crappy cars and live in the same modest houses as the rest of us. Nurse didn't used to be the "made it in life" job for people who come from poor backgrounds.
