> No one knows, do the test and insurance will decide
Oh, someone knew but the doctors office wanted to do the expensive thing and get paid (either by you or the insurance)
Not saying the blood test was unnecessary but we have no idea what communication happened between the doctor and insurance company. Did they possibly recommend a less expensive test and the doctor decided that'd make him less money so he went forward anyway?
Health insurance companies have told me, on the phone, that they will not tell me the codes the doctor needs to charge for preventative visits in order to for my visit to be covered as preventative care (meaning I don’t have to pay anything).
However, I could tell the insurance customer service person a code, then they could tell me if it was classified as a covered preventative service.
So I, the insurance company’s customer,
Googled medical procedure codes and found some on random PDFs, and checked which ones were covered, and then I asked the doctor to provide me the services for that code.
That is American healthcare.
On the flip side, I also had a doctor’s office try to bill my insurance $25 for towels used to wipe the ultrasound jelly off my wife’s belly. My insurance didn’t pay, so the doctor’s office sent me the bill for what insurance didn’t cover, so I called the doctor’s office and asked why I am being charged $25 for the few pieces of paper towel (not even linen towel), and the receptionist said they would waive the charge.
So, moral of the story is bring your own paper towel roll when you expect to get messy at the doctor’s office.
No, I assure you, it is very common for doctors' offices not to know whether a particular procedure will be covered.
This is not just because of the capriciousness of insurance adjusters, but because they have to deal with all the 273 different variations of insurance plans that people who come through their offices might have.
In general, a doctor's primary goal will be to get you good care.
An insurance company's only goal nowadays is to make as much money as possible for as little effort as possible.
> An insurance company's only goal nowadays is to make as much money as possible
How can that be true when their profits are capped on collected premiums? Look up the Medical Loss Ratio (MLR) rule to see what I'm referring to. If you wanted to squeeze money out of people, health insurance would be the least appealing industry to do that in since you're required to spend 80-85% of premiums on medical care.
The linked article is about insurers trying to reduce spending by downcoding.
So which is it? Insurers unfairly denying reimbursement for what should be valid claims, or insurers unfairly increasing spending on claims so they can increase their profits.
Also, go look at 5, 10, and 15 year returns for the big insurers (UNH/Elevance/CVS/Cigna/Humana/Molina/Centene) if you think health insurance is a good business for earning money. Spoiler alert: they’re less than desirable, stick with SP500.
The 7 publicly listed health insurers have ~2% profit margins, with the exception of UNH at 6%, but that is due to its healthcare provider business earning higher margins.
The other insurers are almost all non profit (various BCBS affiliated insurers, Kaiser, Providence, etc).
You wrote they had 25% margins. And obviously a business with 2% profit margins is incentivized to spend less, if they didn’t, they would be out of business!
Gross versus net margin. The other commenter was saying they don't have incentives to cut costs because of the MLR limit, but that limit is a 25% margin over the cost of their "product." For a product that boils down to just moving money around, 25% is pretty good.
This is illustrated by the fact that they aren't actually bumping into the legal MLR limit currently. It would make sense if they don't care about cutting costs because the law doesn't allow them to spend less, but that's not where they are at the moment. If they could cut their medical spending by 1% they could increase their profit by 40%.
> The other commenter was saying they don't have incentives to cut costs because of the MLR limit, but that limit is a 25% margin over the cost of their "product." For a product that boils down to just moving money around, 25% is pretty good.
I don’t know where you are getting 25% from. See exhibit 2:
Medical loss ratios float between 80% to 90%, leaving 10% to 20% for operating costs and profit.
Their “product” requires enormous manpower to negotiate contracts, handle customer service, lawyers for the government, and most of all, employ doctors and pharmacists to adjudicate claims.
> It would make sense if they don't care about cutting costs because the law doesn't allow them to spend less, but that's not where they are at the moment.
Of course, and the obvious fact of the matter is insurance prices are heavily regulated and there is competition, so they already have an incentive to control costs in order to control premiums. Which is literally what their customers pay them for, to negotiate with healthcare providers with whom customers usually wouldn’t have leverage against.
>If they could cut their medical spending by 1% they could increase their profit by 40%.
Sure, but in industries like insurance and retail, the low single digit profit margins indicate a more pressing need to survive, rather than increase nominal profit.
You’re right, I had the idea that you divide by cost, not revenue. So a 20% legal maximum margin. Which is still a fair bit above what they actually achieve, so there’s plenty of motivation to reduce their medical spending.
Oh, someone knew but the doctors office wanted to do the expensive thing and get paid (either by you or the insurance)
Not saying the blood test was unnecessary but we have no idea what communication happened between the doctor and insurance company. Did they possibly recommend a less expensive test and the doctor decided that'd make him less money so he went forward anyway?