Hopefully not diving headfirst into shallow water here, but I'm curious what smart and number-savvy health-care professionals think about this:
As I see it, the core problem with suggesting that free market forces could streamline health care insurance is that the insurance company stands to gain far more by avoiding adverse selection than by any other improvement(s) in efficiency.
My assumptions:
1) a significant minority of patients account for the lion's share of health care expenses (whether 5/50, 20/80 or some other similar %), and
2) there are probabilistic approaches to assess (at least some) of those who are more likely to be in that costly minority
That being the case, the "rational" insurance company would be best served to put every resource at its disposal into directing the sick toward the competition (and/or attracting the healthiest).
Health care insurance competition therefore evolves into a giant game of "hot potato".
Thoughts?
As I see it, the core problem with suggesting that free market forces could streamline health care insurance is that the insurance company stands to gain far more by avoiding adverse selection than by any other improvement(s) in efficiency.
My assumptions:
1) a significant minority of patients account for the lion's share of health care expenses (whether 5/50, 20/80 or some other similar %), and
2) there are probabilistic approaches to assess (at least some) of those who are more likely to be in that costly minority
That being the case, the "rational" insurance company would be best served to put every resource at its disposal into directing the sick toward the competition (and/or attracting the healthiest).
Health care insurance competition therefore evolves into a giant game of "hot potato".
Thoughts?
Comment