By NextBestFitHealth insurers, brokers, and their shareholders
Companies that sell, administer, and broker private coverage.
Under your mix of paths
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Problems that hurt them
Paths that fix these help them.
- Facility fees: the same service costs more in a hospital-owned building: Hospital ownership adds a facility fee to the cost of the same clinic visit.
- Brand-name drug prices far above production cost: Market exclusivity sustains drug prices far above production cost.
- Patent thickets and evergreening delay generics: Extended monopolies keep them paying monopoly prices longer.
- Low-value care and overtreatment: They pay for tests and treatments with little benefit.
- Transition disruption: jobs, companies, and familiar coverage: Insurers lose their core business, and shareholders lose value.
Problems they gain from
Paths that fix these cost them.
- People lose coverage when their life changes (churn): Insurers avoid the long-term costs of members who leave.
- Job lock: people stay in jobs to keep insurance: Insurers and brokers sell group coverage through employers.
- Underinsurance: covered, but can't afford to use it: They benefit from lower premiums.
- Narrow networks and out-of-network surprises: Narrow networks let insurers offer lower premiums.
- Premiums are a large, flat, hidden tax on wages: Premiums are insurers' revenue.
- Claim denials: Denials lower insurers' medical spending.
- Prior authorization delays and blocks care: They control treatment approval through prior authorization.
- Medicare Advantage overpayments and coding intensity: Plans receive larger payments when enrollees look sicker on paper.
- Insurer overhead and profit: Overhead and profit are insurers' income.
- Pharmacy benefit managers profit from opaque drug pricing: Rebates and opaque pricing generate revenue for benefit managers and their insurer parents.
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Mental health care is hard to get: They benefit from avoiding behavioral health costs.
- Dental, vision, and hearing are mostly uncovered: Private Medicare plans market extra benefits missing from traditional coverage.
- Slower access to new drugs and technology: Strict value assessment lowers payment for new products in the short run.
- Paying a fixed amount per patient rewards doing less: They keep the difference when care costs less than fixed payments.