Noah Smith really, really does not understand how health insurance works or that insurance is a tug-of-war between providers and insurers. He sees insurers as a blameless mediators caught between costs and providers, principally because they do not make much obvious profit. In reality, they are a source of inflationary pressure in a continual arms race between how much money required insurance drives up de facto costs, how much providers attempt to grab, and how much they are bilked and can bilk.
It’s a multi-layered fraud combined with financial conflict and beset with huge inflationary pressures, mostly caused by insurance itself.
In other words, they are all villains and none are blameless. I’d say providers and insurance companies are about 40/40 villain, with other 20% being various other health care parasites.
The entire US medical system is a scam and insurance companies are no less evil and no less crooked than any other component.
IANAA:
That United Healthcare Group graphics numbers looks caca to me.
Noah’s argument neither accounts for the effect of extreme horizontal and vertical integration nor the anchoring effect on “costs” such an entity can create. It doesn’t account for the complete lack of transparency of costs either.
Good thing executive function theft isn’t recognized.
You’re right. He misses most of the important aspects and buys into corporate flimflam and PR. In a large company as I am sure you know, “profits” are mostly notional. Not in that they don’t exist, but that they can be massaged various ways to produce a desired outcome or to line the right exec pockets.
UHC’s “profit” is real in the sense that they made a lot of money, but even using GAAP, there is a lot of slop and fiction. And just the sheer administrative overheard (underestimated everywhere) is enormous to have a system like we do. It costs us more than anywhere in the world and the outcomes are roundly worse. (And that’s even ignoring all the mental health issues that dealing with insurance causes.)