[rcjones]

To your first points, the system exists as it does because each party can sort of displace the onus of overspending on another party.

1. Insurers are incentivized to seek out the minimum cost to achieve maintainable health.

2. Health care providers are incentived to reap as much as possible from insurers in return for acceptable (not always exemplary) health outcomes.

3. Patients, who on average are getting older and in need of more care, are pigeonholed (sometimes good, sometimes bad) into health care decisions by their providers and insurers.

4. Device/equipment manufacturers can charge ludicrous amounts because they capture very specific pieces of markets or gain preference from health care providers. However, the risk and cost involved in creating a new/competing product and entering a market can be staggering, and so high costs become inevitable (same argument drug developers can make).

As you said, 'justified at any cost' makes this whole shebang go, especially when no single party is capable of controlling the cost. We can't point to a boogeyman we all have a part in making.

[maxerickson]

This would be more true if hospitals weren't allowed to bill patients for services that insurance refuses to cover.

But hospitals force patients to agree to be responsible for all bills their insurance doesn't cover.

So there are two large institutions, neither of which is entirely aligned with the interests of the individual dealing with them. Of course hospitals aren't trying to kill people, but good luck figuring out if the care they bill for is really necessary or not.

[bedhead]

All correct...again, no price transparency, and every single party in the chain (other than the consumer) benefits from higher prices.

[sevensor]

This has been a huge issue for me lately. Several times in the last year my family has been in the position of trying to decide whether to have a procedure done, and literally nobody can tell us how much it costs. Not the providers, not the insurance companies, not the hospital. "Probably less than $50k" is not a helpful answer. The best answers we were able to find came from other people who had already had similar procedures done at the same hospital, by the same providers. But even so, one quirk in the procedure, one extra diagnostic, one extra drug, can cost thousands of dollars. Once you've signed up for the procedure, it's very hard to say no to the extras. You might not even know they've been ordered until it's too late.

[rayiner]

That phenomenon isn't unique to medical procedures. The answer to the question "how much is this lawsuit/software project/renovation going to cost?" is almost never going to be a definite number. (It's no surprise that people complain about bills in all these areas. But it's not your contractor's fault that your subfloor rotted and his $X quote for re-tiling now needs to include $Y for replacing the subfloor.)

[sevensor]

But the contractor will at least give you an estimate and say, "this job will cost $2200 unless your subfloor is rotted out." And they can at least give you a verbal estimate of how much more it would cost if the subfloor is rotten. In the last year, I've dealt with this exact situation --- linoleum replacement with rotted subfloor. I'll take contractors over the medical industry any day for pricing transparency.

[ensignavenger]

As per 1- insurance companies justify their earnings as a percent of costs for care- so if they keep costs for care high, it actually helps them charge higher premiums. Of course, they have to ensure that costs are high for everyone.

If an insurance company were to announce record profits because they were able to better control costs than their competitors, there would be immediate pressure to lower premiums and not take the additional profits.

When it comes to health care, the idea that we have anything resembling a free-market and private competition to lower prices is a farce on a grand scale.

[pandaman]

The law actually caps their profit margin[1] so it effectively forces the insurance to pay and charge more if it wants to increase its income. Ironically, this law is called "Affordable Care Act".

1. http://abcnews.go.com/Politics/obamacare-health-insurance-re...

[ensignavenger]

I thought that was the case, but wasn't sure, so I did not include it in my original comment, so thanks for pointing it out and providing the link!