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Insurance companies often have a parent company. That parent company owns healthcare providers and pharmacies. So it goes something like this United Health Gr

Insurance companies often have a parent company. That parent company owns healthcare providers and pharmacies. So it goes something like this United Health Group -> United Health Insurance United Health Group -> Sunshine Hospital. United Health Insurance has a profit cap, it’s a % of revenue. Sunshine Hospital has no cap. So Sunshine Hospital charged United Health Insurance X$ and that profit rolls up to United Health Group.

gruez 21d ago
>United Health Insurance has a profit cap, it’s a % of revenue. Sunshine Hospital has no cap. So Sunshine Hospital charged United Health Insurance X$ and that profit rolls up to United Health Group. That doesn't really work as a strategy unless UHI cornered the insurance market within a given region, otherwise they'd lose business to competing hospitals. You might then say "hospitals aren't competitive, they're (regional) monopolies!", which might be true, but if that were the case, you'd expect them to raise prices anyways. They're profit maximizing companies after all, not operating out of altruism.
- estearum 21d ago
  Uhh...? We know for a fact that this is how it works. It's actually far more insidious. The payer will have non-owned providers on their network, and by virtue of processing those claims they will understand a lot about the provider. They use this info to decide which providers to acquire. If the provider declines acquisition, the payer will use their member population (i.e. customers/patients of the provider who are covered by the payer) as leverage in negotiations against the provider, effectively crippling their business. Once a practice is sufficiently maimed, they come back with another acquisition offer, and ta-da, the big player gets bigger. Yes, all of this only works if the payer is large relative to other payers. There was a period of history where this was a caveat, now it's just an observation about history. Now, there is 1 or 2 mega-players in each region. They've divvied up the country into their own territories and will extract rent henceforth. It's very important to understand that this model also eliminates all incentives to reduce costs of care. There is not a single player in the entire ecosystem who is incentivized to reduce cost of care except patients, but even there, most patients' health insurer is selected by their employer. Then what is an employer going to do? Select a health plan that doesn't have any local healthcare providers?
  - gruez 21d ago
    >Yes, all of this only works if the payer is large relative to other payers. There was a period of history where this was a caveat, now it's just an observation about history. Now, there is 1 or 2 mega-players in each region. They've divvied up the country into their own territories and will extract rent henceforth. ...which is specifically what I acknowledge in my original comment: >... unless UHI cornered the insurance market within a given region, otherwise they'd lose business to competing hospitals. For all the words you wrote, it doesn't seem like you're disputing this point, and you're not providing any evidence that UHI has monopoly/monopsony powers, only postulating that it's probably true.
    - estearum 21d ago
      So your very substantive contribution to "they're abusing market power" is the observation "they could only do this if they have market power?" And you're wanting someone else to go demonstrate to you that the single entity that is both 1) largest health insurer and 2) largest health provider in the country has significant market power? I'll assume that this is legitimate ignorance and not a bad faith attempt to muddy conversation, and I'll direct you to a few resources where you can read several years of extensive investigative reporting on the myriad ways the pay-vider structure enables acquisition and exploitation of market power: https://www.economicliberties.us/data-tools/unitedhealth-group-abuse-tracker/ https://www.economicliberties.us/data-tools/unitedhealth-gro... https://www.statnews.com/unitedhealth-group-investigation-health-care-colossus-series/ https://www.statnews.com/unitedhealth-group-investigation-he... https://www.wsj.com/us-news/unitedhealth-medicare-fraud-investigation-df80667f https://www.wsj.com/us-news/unitedhealth-medicare-fraud-inve... https://www.wsj.com/health/healthcare/medicare-health-insurance-diagnosis-payments-b4d99a5d https://www.wsj.com/health/healthcare/medicare-health-insura... https://publicintegrity.org/topics/health/federal-programs/medicare-advantage-money-grab/ https://publicintegrity.org/topics/health/federal-programs/m... You can also read the public filings of the payviders to read them bragging about their use of these techniques. Here's direct reporting on the concentration itself: https://www.ama-assn.org/press-center/ama-press-releases/ama-report-health-insurance-giants-tighten-grip-us-markets https://www.ama-assn.org/press-center/ama-press-releases/ama...
- FireBeyond 21d ago
  > That doesn't really work as a strategy unless UHI cornered the insurance market within a given region, otherwise they'd lose business to competing hospitals. Welcome to the Certificate of Need. A legal requirement in most states for creating a new healthcare facility. Ostensibly to make sure that the population in that area has adequate healthcare options. But lobbied for by healthcare facility and hospital owners, it actually surveys other providers (your competitors) in the area and asks if their revenue would be adversely affected by you opening up. Too much of this (i.e. "we're worried that a hospital might reduce coverage or shutdown if there's too much risk to their profit"), and no CoN for you. And this is to say nothing of Pharma Benefits Management. Steering you towards their own more expensive pharmacy (which isn't profit-capped). Mine does it by saying "you want a more convenient >30 day prescription? Only through our wholly owned mail-order subsidiary". 30 day scripts at your local pharmacy. 90 day for the same med? Denied.
  - gruez 21d ago
    >which might be true, but if that were the case, you'd expect them to raise prices anyways. They're profit maximizing companies after all, not operating out of altruism.

gruez 21d ago

>United Health Insurance has a profit cap, it’s a % of revenue. Sunshine Hospital has no cap. So Sunshine Hospital charged United Health Insurance X$ and that profit rolls up to United Health Group. That doesn't really work as a strategy unless UHI cornered the insurance market within a given region, otherwise they'd lose business to competing hospitals. You might then say "hospitals aren't competitive, they're (regional) monopolies!", which might be true, but if that were the case, you'd expect them to raise prices anyways. They're profit maximizing companies after all, not operating out of altruism.

estearum 21d ago
Uhh...? We know for a fact that this is how it works. It's actually far more insidious. The payer will have non-owned providers on their network, and by virtue of processing those claims they will understand a lot about the provider. They use this info to decide which providers to acquire. If the provider declines acquisition, the payer will use their member population (i.e. customers/patients of the provider who are covered by the payer) as leverage in negotiations against the provider, effectively crippling their business. Once a practice is sufficiently maimed, they come back with another acquisition offer, and ta-da, the big player gets bigger. Yes, all of this only works if the payer is large relative to other payers. There was a period of history where this was a caveat, now it's just an observation about history. Now, there is 1 or 2 mega-players in each region. They've divvied up the country into their own territories and will extract rent henceforth. It's very important to understand that this model also eliminates all incentives to reduce costs of care. There is not a single player in the entire ecosystem who is incentivized to reduce cost of care except patients, but even there, most patients' health insurer is selected by their employer. Then what is an employer going to do? Select a health plan that doesn't have any local healthcare providers?
- gruez 21d ago
  >Yes, all of this only works if the payer is large relative to other payers. There was a period of history where this was a caveat, now it's just an observation about history. Now, there is 1 or 2 mega-players in each region. They've divvied up the country into their own territories and will extract rent henceforth. ...which is specifically what I acknowledge in my original comment: >... unless UHI cornered the insurance market within a given region, otherwise they'd lose business to competing hospitals. For all the words you wrote, it doesn't seem like you're disputing this point, and you're not providing any evidence that UHI has monopoly/monopsony powers, only postulating that it's probably true.
  - estearum 21d ago
    So your very substantive contribution to "they're abusing market power" is the observation "they could only do this if they have market power?" And you're wanting someone else to go demonstrate to you that the single entity that is both 1) largest health insurer and 2) largest health provider in the country has significant market power? I'll assume that this is legitimate ignorance and not a bad faith attempt to muddy conversation, and I'll direct you to a few resources where you can read several years of extensive investigative reporting on the myriad ways the pay-vider structure enables acquisition and exploitation of market power: https://www.economicliberties.us/data-tools/unitedhealth-group-abuse-tracker/ https://www.economicliberties.us/data-tools/unitedhealth-gro... https://www.statnews.com/unitedhealth-group-investigation-health-care-colossus-series/ https://www.statnews.com/unitedhealth-group-investigation-he... https://www.wsj.com/us-news/unitedhealth-medicare-fraud-investigation-df80667f https://www.wsj.com/us-news/unitedhealth-medicare-fraud-inve... https://www.wsj.com/health/healthcare/medicare-health-insurance-diagnosis-payments-b4d99a5d https://www.wsj.com/health/healthcare/medicare-health-insura... https://publicintegrity.org/topics/health/federal-programs/medicare-advantage-money-grab/ https://publicintegrity.org/topics/health/federal-programs/m... You can also read the public filings of the payviders to read them bragging about their use of these techniques. Here's direct reporting on the concentration itself: https://www.ama-assn.org/press-center/ama-press-releases/ama-report-health-insurance-giants-tighten-grip-us-markets https://www.ama-assn.org/press-center/ama-press-releases/ama...
FireBeyond 21d ago
> That doesn't really work as a strategy unless UHI cornered the insurance market within a given region, otherwise they'd lose business to competing hospitals. Welcome to the Certificate of Need. A legal requirement in most states for creating a new healthcare facility. Ostensibly to make sure that the population in that area has adequate healthcare options. But lobbied for by healthcare facility and hospital owners, it actually surveys other providers (your competitors) in the area and asks if their revenue would be adversely affected by you opening up. Too much of this (i.e. "we're worried that a hospital might reduce coverage or shutdown if there's too much risk to their profit"), and no CoN for you. And this is to say nothing of Pharma Benefits Management. Steering you towards their own more expensive pharmacy (which isn't profit-capped). Mine does it by saying "you want a more convenient >30 day prescription? Only through our wholly owned mail-order subsidiary". 30 day scripts at your local pharmacy. 90 day for the same med? Denied.
- gruez 21d ago
  >which might be true, but if that were the case, you'd expect them to raise prices anyways. They're profit maximizing companies after all, not operating out of altruism.