[quarterdime]

I have heard this argument before, and it made sense to me until I became a patient. First of all, if the 3rd party (insurance company) was so incentivized to guard against fraud, why would they repeatedly lose documents that had been submitted to them?

> For starters, she said bluntly, “we know everything is going to get denied.” It’s almost a given, she said, that the insurer will lose the first batch of records. “We often have to send records two or three times before they finally admit they actually received them. … They play all of these kinds of delaying games.”

Insurance companies costs come less from the first $10k of patients' spending, and much more from the next $10M. Very few, very expensive patients make up the bulk of the cost. This article (and other great Pro Publica reporting) demonstrates some of the ways that insurance companies cut these costs--ultimately by refusing to pay (or delaying) for necessary care.