[bcooke]

This project reminds me of a book I highly recommend called An American Sickness. It sheds a lot of light on the same sorts of issues.

One underlying, perverse incentive behind many of the problems is that insurers are regulated based on percentages of spending rather than total costs.

The US passed laws meant to limit marketing and overhead that tied insurers economics to the size of the overall medical bill... which means as healthcare spending rises, the dollars they’re allowed to retain can rise too, which basically means they're incentivized to drive costs up rather than down.

Here's a link to the book: https://www.helmpublishing.com/products/an-american-sickness...

[Taikonerd]

> The US passed laws meant to limit marketing and overhead that tied insurers economics to the size of the overall medical bill... which means as healthcare spending rises, the dollars they’re allowed to retain can rise too, which basically means they're incentivized to drive costs up rather than down.

Yes, this is an important piece of the puzzle. The "medical loss ratio" for large insurers (the kind we all know and love) is set to 85%. So they can keep up to 15% of their revenue as profit.

As you said, if total spending goes up, they get 15% of a larger number.

[hattmall]

It's almost as if the insurance companies wrote those regulations. The same ones that required everyone to purchase their product and implemented government subsidies to pay them. Legitimately no way anything other than price increases and insurance profits could happen.

[yeahwhatever10]

So same as realtors and most other brokers.