What Happens When a Healthcare Startup Leaves You With the Bill(omnifeed.com)
omnifeed.com
What Happens When a Healthcare Startup Leaves You With the Bill
http://omnifeed.com/article/valleywag.gawker.com/what-happens-when-a-healthcare-startup-leaves-you-with-1598186714
95 comments
I think that's an overly generous assessment. Oscar's founders have invested incredible sums of money into the company and are very well connected. If they've not hired people who know the insurance industry, it's safe to assume it's because they chose not to. This is not a small scrappy startup. This is a company started by powerful people looking to get into an opening they saw.
I have Kaiser. It's vastly simplified because the people paying for my care are the same people who are providing my care. They also seem to have a real "get you up and running so you can get back to work" kind of attitude, which meshes well with my own values.
I mean, consider for a moment how much of a pain in the ass it is to get an insurance claim on your house or your car or whatever filled. Multiply that by the complexity of medicine, and... yeah. You can see how it would get complex fast.
Maybe this is an area where horizontal integration is the order of the day?
I mean, consider for a moment how much of a pain in the ass it is to get an insurance claim on your house or your car or whatever filled. Multiply that by the complexity of medicine, and... yeah. You can see how it would get complex fast.
Maybe this is an area where horizontal integration is the order of the day?
> how much of a pain in the ass it is to get an insurance claim on your house or your car or whatever filled.
I have had nothing but excellent experiences with both my car insurance company and my homeowners insurance company.
The trick to having a good relationship with your insurance company is to have a good insurance company.
I have had nothing but excellent experiences with both my car insurance company and my homeowners insurance company.
The trick to having a good relationship with your insurance company is to have a good insurance company.
Have you ever filed a claim that would would send the expected value of your account negative? Since that's a tricky calculation, here's an alternative: have you ever made a claim that (even momentarily) sent the value of your account negative?
Insurance companies are always polite, efficient, and tolerant when they're taking your money (including making small payouts). Why wouldn't they be? But that's not where they add value to the equation. If it was, everyone would just self-insure. They add value when they have to pay out a lot of money for an unlikely adverse event. By definition, only a small fraction of customers ever get to judge this part of their insurance company, even though doing so is really the only way to judge the quality of the product they were paying for.
Insurance companies are always polite, efficient, and tolerant when they're taking your money (including making small payouts). Why wouldn't they be? But that's not where they add value to the equation. If it was, everyone would just self-insure. They add value when they have to pay out a lot of money for an unlikely adverse event. By definition, only a small fraction of customers ever get to judge this part of their insurance company, even though doing so is really the only way to judge the quality of the product they were paying for.
They should force sales and claims to be the same person. Problem solved. Right now, its good cop/ bad cop. Insurance only works in this framework if you have a lawyer to advocate for you...otherwises its endless dark-pattern fighting. Its truly atrocious.
Kaiser is great. The problem is with Kaiser is that it's not available nationwide. If I remember, it's only available in big metros.
> I have Kaiser. It's vastly simplified because the people paying for my care are the same people who are providing my care. They also seem to have a real "get you up and running so you can get back to work" kind of attitude, which meshes well with my own values.
I'm glad that was your experience with Kaiser, because it certainly wasn't mine.
I had herniated disc that ultimately required surgery. It was bad enough that I couldn't sit at all & couldn't stand for more than a few a few minutes.
Laying flat would take away some pain but not all. It would roughly 8 weeks before I would know again what it was like to be pain-free.
During that time obviously I couldn't go into work. Even the basics -- showering & going to the bathroom -- were a challenge. I quickly found vicodin didn't do anything for my pain, but I continued to take it simply because it kept me constipated. (One bad bathroom trip was better than several.)
I saw 4 different doctors in my first weeks. Initially I was giving a variety of pain killers & muscle relaxers. We asked about an MRI each time & was told it was unnecessary.
Eventually we worked our way through the Kaiser system & started to get to specialists who knew more about what they were talking about. Each one regarded my situation as one of the most severe they'd seen & refer to the specialist that was the next level up.
We finally got one to request an MRI. That request was "lost." We called several times, each time being told they'll take care of it & to call back in 24 hours. Finally the next doctor sent in another request, and told us to personally contact her in 24 hours (giving us her cell!) if it wasn't scheduled.
One of the biggest challenges was that each specialist was in a different department. Meaning it would be 1-2 weeks of waiting for the next appointment in that department. Absolutely no consideration is given to the length to how long I'd had my current condition.
Eventually we did to a surgeon -- a really good one. He took pity on both the severity of my situation & the length to move things around & fit me in earlier. The crazy thing being, it could have been even longer if he hadn't.
Without question, the worst 8 weeks of my life.
When an entity like Kaiser can't control costs by deciding what claims they'll approve, it seems they'll instead control costs by deciding what access to care you'll receive.
Honestly, I'm not sure that's much better.
I'm glad that was your experience with Kaiser, because it certainly wasn't mine.
I had herniated disc that ultimately required surgery. It was bad enough that I couldn't sit at all & couldn't stand for more than a few a few minutes.
Laying flat would take away some pain but not all. It would roughly 8 weeks before I would know again what it was like to be pain-free.
During that time obviously I couldn't go into work. Even the basics -- showering & going to the bathroom -- were a challenge. I quickly found vicodin didn't do anything for my pain, but I continued to take it simply because it kept me constipated. (One bad bathroom trip was better than several.)
I saw 4 different doctors in my first weeks. Initially I was giving a variety of pain killers & muscle relaxers. We asked about an MRI each time & was told it was unnecessary.
Eventually we worked our way through the Kaiser system & started to get to specialists who knew more about what they were talking about. Each one regarded my situation as one of the most severe they'd seen & refer to the specialist that was the next level up.
We finally got one to request an MRI. That request was "lost." We called several times, each time being told they'll take care of it & to call back in 24 hours. Finally the next doctor sent in another request, and told us to personally contact her in 24 hours (giving us her cell!) if it wasn't scheduled.
One of the biggest challenges was that each specialist was in a different department. Meaning it would be 1-2 weeks of waiting for the next appointment in that department. Absolutely no consideration is given to the length to how long I'd had my current condition.
Eventually we did to a surgeon -- a really good one. He took pity on both the severity of my situation & the length to move things around & fit me in earlier. The crazy thing being, it could have been even longer if he hadn't.
Without question, the worst 8 weeks of my life.
When an entity like Kaiser can't control costs by deciding what claims they'll approve, it seems they'll instead control costs by deciding what access to care you'll receive.
Honestly, I'm not sure that's much better.
There is, sometimes, a tendency on the part of young, ambitious entrepreneurs, to be overly optimistic and assume that they can gatecrash an industry they know nothing about, set up a slick website and disrupt the big, bloated, uncool incumbents.
Also, disrupting American health insurance is like "disrupting" terrorism. (It took 10 years to get one guy.) It's not something you can pull off in an afternoon. You're facing evil. Not irritating inefficiencies, but an adversary with a history of killing people to further its own ends.
Startup people think that the natives in whatever they want to "disrupt" are stupid. That they're facing accidental inefficiency instead of malignancy. In fact, the bad guys have just as many smart people as we do in tech. It's just that their smart people have been focused on building relationships, people-hacking, negotiation, litigation and loophole-finding, while we've been reading papers about category theory. Underestimating them is a bad call. Engineers turned founders make the same mistakes with "dumb" VCs and lose their shirts.
Also, disrupting American health insurance is like "disrupting" terrorism. (It took 10 years to get one guy.) It's not something you can pull off in an afternoon. You're facing evil. Not irritating inefficiencies, but an adversary with a history of killing people to further its own ends.
Startup people think that the natives in whatever they want to "disrupt" are stupid. That they're facing accidental inefficiency instead of malignancy. In fact, the bad guys have just as many smart people as we do in tech. It's just that their smart people have been focused on building relationships, people-hacking, negotiation, litigation and loophole-finding, while we've been reading papers about category theory. Underestimating them is a bad call. Engineers turned founders make the same mistakes with "dumb" VCs and lose their shirts.
I think that it's generally a good assumption, anywhere in business (and most places in life), that whoever you're talking to is self-interested. Not evil, not even necessarily selfish, but it's a good bet that their world revolves around them.
And once you've got this principle ingrained in your mind, navigating the big scary world of business, or VC, or Google, or health insurance, or any other industry becomes much easier. Because you start to look for what people's incentives are, and don't ask them to do things that are against their own incentives. People are much more inclined to cooperate with you when it doesn't hurt their own interests.
People who actually "disrupt" industries, rather than just talk about it, do so by finding loopholes in other folks' incentive structures. They figure out other ways of doing things that incentivize everybody involved to cooperate with them, and that's how they revolutionize things.
And once you've got this principle ingrained in your mind, navigating the big scary world of business, or VC, or Google, or health insurance, or any other industry becomes much easier. Because you start to look for what people's incentives are, and don't ask them to do things that are against their own incentives. People are much more inclined to cooperate with you when it doesn't hurt their own interests.
People who actually "disrupt" industries, rather than just talk about it, do so by finding loopholes in other folks' incentive structures. They figure out other ways of doing things that incentivize everybody involved to cooperate with them, and that's how they revolutionize things.
+1.
The parent talked about fighting evil but the vast majority of people who work in industries like health aren'e evil - they're merely acting in their own self-interest within a system/industry that has evolved, over time, to exploit the vulnerable.
The parent talked about fighting evil but the vast majority of people who work in industries like health aren'e evil - they're merely acting in their own self-interest within a system/industry that has evolved, over time, to exploit the vulnerable.
"So I went to my new Oscar-approved doctor, who recommended routine blood work. The hospital called up Oscar and Oscar's operations department assured both the in-hospital labs and administrators that this blood work would be covered by my plan so we went ahead with it."
Urgh American health care is just so weird. It makes my skin crawl.
Urgh American health care is just so weird. It makes my skin crawl.
It's evil, inconvenient, and (amazingly) it's even less efficient that its government-run counterparts both inside and outside the US: http://healthcarereform.procon.org/view.resource.php?resourc...
What will it take to convince people of this? Our society already accepts that markets aren't a suitable medium for every human endeavor, how long must we continue to experiment with private (basic) health insurance before we add it to the list of exceptions?
If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.
http://healthcarereform.procon.org/view.resource.php?resourc...
What will it take to convince people of this? Our society already accepts that markets aren't a suitable medium for every human endeavor, how long must we continue to experiment with private (basic) health insurance before we add it to the list of exceptions?
If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.
http://healthcarereform.procon.org/view.resource.php?resourc...
> If our health sector ran as efficiently as everyone else's (as a fraction of GDP/capita), the money we currently pay for medicare and medicaid would suffice to provide universal coverage for every single person in the US.
This isn't an apples-to-apples comparison for several reasons (some which overstate the amount of money, some which understate).
One, there are a number of things which fall under Medicare's budget which you and I wouldn't think of as the "main" purpose of Medicare in this context (ie, providing medical insurance to the elderly).
On the other hand, look at the profit margins of any hospital broken down by insurance status. Virtually any hospital hemorrhages money on uninsured patients, Medicare patients, and Medicaid patients. They make this up by charging patients on private insurance, and in the end eke out low single-digit profit margins if they're lucky (most aren't). If you're on private insurance, you're essentially subsidizing the medical care of the aforementioned groups (whether you pay it in the form of your deductible, or in the form of your premiums[0]).
As the largest payer, Medicare has the leverage in order to decide what it will and will not pay for, and providers have very little choice but to accept that, whether or not it's economically feasible for them. (This is the exact inverse of the situation most of us are in with our ISP/cable providers (we have an essential monopoly on broadband access in most parts of the US). When there is a single purchaser, this is known not as a monopoly but as a monopsony[1])
It's easy to say that "costs are too high" - that's fine, but where are they too high?
The easy response to this is that hospitals and doctors are making too much money. But in reality, most hospitals are struggling just to say solvent, which is why we've seen massive consolidation in hospitals in the last several years as hospitals go out of business. The same is true of doctors, who are selling to these larger hospitals because their private practices are now financially unsustainable[2]. Of course, this really just pushes the problem up the food chain, because those same hospitals are already struggling to keep the lights on.
I don't really have an answer to this, by the way... I just want to relay an appreciation of why the situation hasn't been fixed yet - it's very complex, and nearly every option involved has significant, serious tradeoffs that nobody really wants to address (whether for political reasons, ethical reasons, or otherwise).
[0] Remember that the size of your premiums are (loosely) linked to the expected value of providing medical care for you. Mathematically this is trivial to show - in reality, the market isn't so efficient, but it's simple enough to say that if your insurers' costs go up, in the long run, your premiums will as well.
[1] https://en.wikipedia.org/wiki/Monopsony
[2] This 116-page report gives a very extensive analysis of the economic state of physicians. Don't be fooled by the title - this trend began long before the ACA, even though the scope of this study was the impact of the ACA specifically (which has contributed to the trend which previously existed): http://www.physiciansfoundation.org/uploads/default/Health_R...
This isn't an apples-to-apples comparison for several reasons (some which overstate the amount of money, some which understate).
One, there are a number of things which fall under Medicare's budget which you and I wouldn't think of as the "main" purpose of Medicare in this context (ie, providing medical insurance to the elderly).
On the other hand, look at the profit margins of any hospital broken down by insurance status. Virtually any hospital hemorrhages money on uninsured patients, Medicare patients, and Medicaid patients. They make this up by charging patients on private insurance, and in the end eke out low single-digit profit margins if they're lucky (most aren't). If you're on private insurance, you're essentially subsidizing the medical care of the aforementioned groups (whether you pay it in the form of your deductible, or in the form of your premiums[0]).
As the largest payer, Medicare has the leverage in order to decide what it will and will not pay for, and providers have very little choice but to accept that, whether or not it's economically feasible for them. (This is the exact inverse of the situation most of us are in with our ISP/cable providers (we have an essential monopoly on broadband access in most parts of the US). When there is a single purchaser, this is known not as a monopoly but as a monopsony[1])
It's easy to say that "costs are too high" - that's fine, but where are they too high?
The easy response to this is that hospitals and doctors are making too much money. But in reality, most hospitals are struggling just to say solvent, which is why we've seen massive consolidation in hospitals in the last several years as hospitals go out of business. The same is true of doctors, who are selling to these larger hospitals because their private practices are now financially unsustainable[2]. Of course, this really just pushes the problem up the food chain, because those same hospitals are already struggling to keep the lights on.
I don't really have an answer to this, by the way... I just want to relay an appreciation of why the situation hasn't been fixed yet - it's very complex, and nearly every option involved has significant, serious tradeoffs that nobody really wants to address (whether for political reasons, ethical reasons, or otherwise).
[0] Remember that the size of your premiums are (loosely) linked to the expected value of providing medical care for you. Mathematically this is trivial to show - in reality, the market isn't so efficient, but it's simple enough to say that if your insurers' costs go up, in the long run, your premiums will as well.
[1] https://en.wikipedia.org/wiki/Monopsony
[2] This 116-page report gives a very extensive analysis of the economic state of physicians. Don't be fooled by the title - this trend began long before the ACA, even though the scope of this study was the impact of the ACA specifically (which has contributed to the trend which previously existed): http://www.physiciansfoundation.org/uploads/default/Health_R...
>This isn't an apples-to-apples comparison.
It really is, and has nothing to do with the current state of Medicare and what it covers. Our per-capita government health care expenditures are far higher than systems that both have better outcomes and that also don't charge at the point of delivery.
Our doctors make twice as much as everyone else's doctors, and that is only sustained because they are both protected from competition from foreign doctors, and also restrict supply domestically. Our drugs are 10x the prices paid in other countries. Our broken patent system contributes to massively bloated prices in medical devices.
We wouldn't have a government budget deficit if our system was as efficient as any other system in the developed world. The saddest thing is that in after our government spends more than everyone else, we as individuals then go out of pocket even more, and the majority of our bankruptcies and foreclosures are a result of medical difficulties. I would go on, but all of this is as boring and obvious as it is ultimately unsustainable.
http://www.cepr.net/calculators/hc/hc-calculator.html
edit: http://www.cepr.net/index.php/blogs/cepr-blog/fixing-our-fis...
It really is, and has nothing to do with the current state of Medicare and what it covers. Our per-capita government health care expenditures are far higher than systems that both have better outcomes and that also don't charge at the point of delivery.
Our doctors make twice as much as everyone else's doctors, and that is only sustained because they are both protected from competition from foreign doctors, and also restrict supply domestically. Our drugs are 10x the prices paid in other countries. Our broken patent system contributes to massively bloated prices in medical devices.
We wouldn't have a government budget deficit if our system was as efficient as any other system in the developed world. The saddest thing is that in after our government spends more than everyone else, we as individuals then go out of pocket even more, and the majority of our bankruptcies and foreclosures are a result of medical difficulties. I would go on, but all of this is as boring and obvious as it is ultimately unsustainable.
http://www.cepr.net/calculators/hc/hc-calculator.html
edit: http://www.cepr.net/index.php/blogs/cepr-blog/fixing-our-fis...
The statistics on medically-related bankruptcy are usually flawed, and overstate the extent of this problem. They usually assume that if you owed more than $(small amount) in healthcare debt, (exact amount varies by study,) the bankruptcy was caused by this debt. Some of the better studies use healthcare debt as % of total debt accumulated in year(s) before bankruptcy, and come out with much lower figures.[1]
It makes sense that if you owe a lot of money, some of it would be to a sector which makes up a large part of the economy, and an even larger part of consumer spending. To put it another way, if you measured the impact of car debt the same way that most studies measure the impact of healthcare debt, you would see that cars cause many, if not most bankruptcies (which is an absurd result, as most people can easily liquidate a car and move to a lower cost option).
[1] will get a citation when I have a little more time
It makes sense that if you owe a lot of money, some of it would be to a sector which makes up a large part of the economy, and an even larger part of consumer spending. To put it another way, if you measured the impact of car debt the same way that most studies measure the impact of healthcare debt, you would see that cars cause many, if not most bankruptcies (which is an absurd result, as most people can easily liquidate a car and move to a lower cost option).
[1] will get a citation when I have a little more time
Your drugs are expensive because the rest of the world freeloads by artificially restricting the selling price of drugs, leaving the US to bear the brunt of the R&D costs.
Your FDA and legal system pushes up the price of medical devices.
But yes, you have the most unnecessarily complex and convoluted health care administrative structure known to man.
Your FDA and legal system pushes up the price of medical devices.
But yes, you have the most unnecessarily complex and convoluted health care administrative structure known to man.
Often times there are very good reasons for those restrictions, especially when pricing for a drug deviates dramatically from actual R&D / operations costs. Take the case of orphan drugs:
http://www.forbes.com/sites/johnlamattina/2013/10/05/are-300...
Besides runaway pricing, many drugs for which companies are given patents and sole-distribution rights, have already been on the market for decades, just never with proper FDA approval. There are other tax incentives and grants provided as well for reintroducing "new" drugs that were already on the market.
http://apps.seattletimes.com/reports/pharma-windfall/2013/no...
Makena scandal:
http://en.wikipedia.org/wiki/KV_Pharmaceutical#Makena_pricin...
Many many other drugs with runaway pricing as well:
Armodafinil and Sodium Oxybate for instance
Europeans decide to enforce price controls? Can't say i blame them.
http://www.forbes.com/sites/johnlamattina/2013/10/05/are-300...
Besides runaway pricing, many drugs for which companies are given patents and sole-distribution rights, have already been on the market for decades, just never with proper FDA approval. There are other tax incentives and grants provided as well for reintroducing "new" drugs that were already on the market.
http://apps.seattletimes.com/reports/pharma-windfall/2013/no...
Makena scandal:
http://en.wikipedia.org/wiki/KV_Pharmaceutical#Makena_pricin...
Many many other drugs with runaway pricing as well:
Armodafinil and Sodium Oxybate for instance
Europeans decide to enforce price controls? Can't say i blame them.
>It's easy to say that "costs are too high" - that's fine, but where are they too high?
I have two (totally anecdotal) answers, from my own experiences and those of my former partner, who spent 15 years working in hospitals:
1 - Administrative overhead. Especially with billing and insurance. 2 - Practices, procedures, and policies to prevent lawsuits. Needless waste, lack of reuse of items that could be cleaned, and safely reused, high premiums for malpractice insurance, training efforts and refusal to make decisions out of fear of suits.
I have two (totally anecdotal) answers, from my own experiences and those of my former partner, who spent 15 years working in hospitals:
1 - Administrative overhead. Especially with billing and insurance. 2 - Practices, procedures, and policies to prevent lawsuits. Needless waste, lack of reuse of items that could be cleaned, and safely reused, high premiums for malpractice insurance, training efforts and refusal to make decisions out of fear of suits.
Hospital operating margins are decent. They are stuck in the same trap as higher ed. Immense investments in tangentially related infrastructure.
"it's even less efficient that its government-run counterparts" Because the VA System is so lean, mean and well run. All health care should be modeled after the gubberment Rolls eyes
I'm a physician, and I have worked in several VAs, but don't work in one presently. They vary significantly in quality, but the good ones where I have worked are excellent by any standard. In a good VA, the bang-for-the-buck is untouchable anywhere else in the US health sector without compromising on good care. Sadly, bad ones are still bad.
If by weird you mean terrible and dehumanizing, you're entirely right.
It's designed to rape the most money away from sick people while providing them just enough care to keep them alive and needing more care, and thus spending more money. It's also designed to be extremely expensive even for those who are healthy by artificially inflating the costs of routine stay-well procedures and testing on top of the ridiculous monthly fees.
And you can forget preventative medicine or any cutting edge treatments unless you're flush with cash.
It's designed to rape the most money away from sick people while providing them just enough care to keep them alive and needing more care, and thus spending more money. It's also designed to be extremely expensive even for those who are healthy by artificially inflating the costs of routine stay-well procedures and testing on top of the ridiculous monthly fees.
And you can forget preventative medicine or any cutting edge treatments unless you're flush with cash.
the design is handed down by government mostly, because of the bewildering number of laws, regulations, and such, that have wrecked havoc in health care for years. Then to top off whatever mess the Federal government makes each state just has to be enough different that what you bought in one state might not be exactly the same in other; used to be (and might still be) that you could not shop across state lines because of government.
Then once you pass that insurance hurdle that regulation/regulators/insurance companies put up its off to the races with the doctors and facilities who may both not be covered by policies again because of the weird way regulations and such work. What can and cannot be performed by who and where it can and cannot be performed.
The the kicker, using low payouts of medicare and such because the government knows the insurance companies and hospitals will make it up on people who can pay thereby redirecting the ire
Then once you pass that insurance hurdle that regulation/regulators/insurance companies put up its off to the races with the doctors and facilities who may both not be covered by policies again because of the weird way regulations and such work. What can and cannot be performed by who and where it can and cannot be performed.
The the kicker, using low payouts of medicare and such because the government knows the insurance companies and hospitals will make it up on people who can pay thereby redirecting the ire
The problem with insurance companies is that they are fundamentally conflicted. As for-profit businesses they have a fiduciary responsibility to maximize profits. Unfortunately the only way to maximize profits is to decline coverage.
The problem with Obamacare is that it does nothing to fix this problem. Who wants to be the guy responsible for that many lost jobs?? So, instead they propped up the insurance companies and made everything more complicated for everyone.
The only solutions I see are to have non-profit insurance companies or a single payer system.
The problem with Obamacare is that it does nothing to fix this problem. Who wants to be the guy responsible for that many lost jobs?? So, instead they propped up the insurance companies and made everything more complicated for everyone.
The only solutions I see are to have non-profit insurance companies or a single payer system.
I always see this claim that companies have to try and maximize profits. Where does that originate? I see many companies like Costco take long term paths to sustainable growth and success without trying to wring every penny of profit out of the business. In my opinion customer satisfaction, quality products, and employee growth and retention are far more beneficial goals than short term profit taking.
The law’s basic position on corporate social responsibility famously was articulated in Dodge v. Ford Motor Co. In 1916, Henry Ford owned 58% of the stock of Ford Motor Co. The Dodge brothers owned 10%. The remainder was owned by five other individuals. Beginning in 1908, Ford Motor paid a regular annual dividend of $1.2 million. Between 1911 and 1915 Ford Motor also regularly paid huge “special dividends,” totaling over $40 million. In 1916, Henry Ford announced that the company would stop paying special dividends. Instead, the firm’s financial resources would be devoted to expanding its business. Ford also continued the company’s policy of lowering prices, while improving quality. The Dodge brothers sued, asking the court to order Ford Motor to resume paying the special dividends and to enjoin the proposed expansion of the firm’s operations. At trial, Ford testified to his belief that the company made too much money and had an obligation to benefit the public and the firm’s workers and customers.
The plaintiff Dodge brothers contended an improper altruism towards his workers and customers motivated Ford. The court agreed, strongly rebuking Ford:
"A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes."
http://www.professorbainbridge.com/professorbainbridgecom/20...
The plaintiff Dodge brothers contended an improper altruism towards his workers and customers motivated Ford. The court agreed, strongly rebuking Ford:
"A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes."
http://www.professorbainbridge.com/professorbainbridgecom/20...
Ford's real motivation was to keep money out of the hands of the Dodge brothers - he thought they were going to use the dividend money to start a rival automaker, and he was right.
The court ruled against Ford because he was acting in bad faith towards his shareholders, not because it's wrong for a corporation to accumulate assets and reinvest in its business instead of paying dividends. (Otherwise Steve Jobs and Warren Buffett would be in trouble...)
The court ruled against Ford because he was acting in bad faith towards his shareholders, not because it's wrong for a corporation to accumulate assets and reinvest in its business instead of paying dividends. (Otherwise Steve Jobs and Warren Buffett would be in trouble...)
In the last 20 years of judgments, how many times has this decision been cited?
https://www.blueshieldca.com/bsca/about-blue-shield/health-r...
One of california's largest health insurance companies is a not for profit and doesn't stockpile money. why is healthcare still expensive?
One of california's largest health insurance companies is a not for profit and doesn't stockpile money. why is healthcare still expensive?
Remember that that pledge can be fulfilled by increasing employee (i.e. CEO) salaries, nicer buildings for the company, etc. That's what's happened at our local BCBS affiliate.
Doctors would say health care is expensive because of the threat of lawsuits which forces them to carry expensive insurance. It's easier for hospitals to price gouge when they're billing a faceless corporation instead of an individual.
> Including legal fees, insurance costs, and payouts, the cost of all US malpractice suits comes to less than one-half of 1 percent of health-care spending.
http://www.slate.com/articles/health_and_science/medical_exa...
http://www.slate.com/articles/health_and_science/medical_exa...
Many of the insurance companies are non-profits, but that doesn't help much. http://seattletimes.com/html/localnews/2017460805_surplus09m...
This myth that businesses have a fiduciary responsibility to maximize profits has to die :-)
Fortunately there is now (since 2012 in fact) a book that explains it very well in terms that almost anyone can understand, certainly anyone here on HN:
The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public http://www.amazon.co.uk/Shareholder-Value-Myth-Shareholders-...
Don't even need to read it all, the first few chapters are more than enough IMHO
Fortunately there is now (since 2012 in fact) a book that explains it very well in terms that almost anyone can understand, certainly anyone here on HN:
The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public http://www.amazon.co.uk/Shareholder-Value-Myth-Shareholders-...
Don't even need to read it all, the first few chapters are more than enough IMHO
Corporations do not have the responsibility to maximize profits. Why do people keep saying this? They have a responsibility to do what is best for the corporation. Sometimes that means spending more on health coverage to retain employees, or give to charity or other programs. It's not all about money.
Often, it's almost all about the money:(
Often, it's almost all about the money:(
What about Dodge v. Ford Motor Company?
I highly recommend to just get the book [1], it's written very well and in layman terms but here's an extract taken from a review [2] of the same:
"Stout traces the birth of this “fable” to the “oversized effects of a single outdated and widely misunderstood judicial opinion.” Dodge v. Ford Motor Company was a 1919 decision of the Michigan Supreme Court. The opinion’s status as a meaningful legal precedent on the issue of corporate purpose is tenuous at best. Yet, its facts “are familiar to virtually every student who has taken a course in corporate law.” As Stout has observed in the past, “[t]he case is old, it hails from a state court that plays only a marginal role in the corporate law arena, and it involves a conflict between controlling and minority shareholders” more than an issue of corporate purpose generally.[11] The chapter explains quite well that any idea that corporate law, as a positive matter, affirmatively requires companies to maximize shareholder wealth turns out to be spurious. In fact, none of the three sources of corporate law (internal corporate law, state statutes and judicial opinions) expressly require shareholder primacy as most typically describe it. To the contrary, through the routine application of the business judgment rule, courts regularly provide prophylactic protection for the informed and non-conflicted decisions of corporate boards"
[1] "The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corportations, and the Public" by Lynn Stout http://www.amazon.co.uk/The-Shareholder-Value-Myth-Sharehold...
[2] http://arizonastatelawjournal.org/book-review-the-shareholde...
"Stout traces the birth of this “fable” to the “oversized effects of a single outdated and widely misunderstood judicial opinion.” Dodge v. Ford Motor Company was a 1919 decision of the Michigan Supreme Court. The opinion’s status as a meaningful legal precedent on the issue of corporate purpose is tenuous at best. Yet, its facts “are familiar to virtually every student who has taken a course in corporate law.” As Stout has observed in the past, “[t]he case is old, it hails from a state court that plays only a marginal role in the corporate law arena, and it involves a conflict between controlling and minority shareholders” more than an issue of corporate purpose generally.[11] The chapter explains quite well that any idea that corporate law, as a positive matter, affirmatively requires companies to maximize shareholder wealth turns out to be spurious. In fact, none of the three sources of corporate law (internal corporate law, state statutes and judicial opinions) expressly require shareholder primacy as most typically describe it. To the contrary, through the routine application of the business judgment rule, courts regularly provide prophylactic protection for the informed and non-conflicted decisions of corporate boards"
[1] "The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corportations, and the Public" by Lynn Stout http://www.amazon.co.uk/The-Shareholder-Value-Myth-Sharehold...
[2] http://arizonastatelawjournal.org/book-review-the-shareholde...
Thanks for the insight.
well said! what do you mean by single payer system?
Single-payer health care is a system in which the government, rather than private insurers, pays for all health care costs.
http://en.wikipedia.org/wiki/Single-payer_health_care
http://en.wikipedia.org/wiki/Single-payer_health_care
This seems similar to third-party warranty companies. They offer full coverage for low amounts, but when the time comes for them to pay up, they're impossible to deal with. Can't reach them on the phone, they need things to be faxed(!) over, and then because of so-and-so reason, it won't be covered.
Healthcare shouldn't be handled by startups. Its too expensive and there's too much riding on it for something that could go belly-up at any moment to handle.
Of course, that brings up the question: How do you actually start an insurance company? I'd imagine that in a perfect world, the government could guarantee your coverage until you get enough in your coffers to handle things without a backup.
Healthcare shouldn't be handled by startups. Its too expensive and there's too much riding on it for something that could go belly-up at any moment to handle.
Of course, that brings up the question: How do you actually start an insurance company? I'd imagine that in a perfect world, the government could guarantee your coverage until you get enough in your coffers to handle things without a backup.
Can you buy a good after-market warranty? I mean the dealers must be getting their first-party warranties from somewhere.
Perhaps, but I've never seen one. Though I suppose getting an extended warranty from the manufacturer is in the same vein. And dealers work more naturally with the manufacturer so there's usually less headache.
I've talked to a couple health-care startups on the East Coast that have started by tackling one small aspect of healthcare and built off of that. Prescription drug tracking. OR procedures and checklists. There are tons of companies in the medical startup space that are doing good work, there are tons of areas that traditional big tech companies have failed to innovate in that are ripe for being upset.
Playing fast and loose with insurance claims sounds more like outright fraud.
Playing fast and loose with insurance claims sounds more like outright fraud.
>I've talked to a couple health-care startups on the East Coast that have started by tackling one small aspect of healthcare and built off of that. Prescription drug tracking. OR procedures and checklists. There are tons of companies in the medical startup space that are doing good work, there are tons of areas that traditional big tech companies have failed to innovate in that are ripe for being upset.
While this is true, one of the problems currently being faced by the industry right now is that all of these niche vendors have their own ideas about how data should be handled, and it's resulted in a fair amount of balkanization of the healthcare IT industry.
It's getting better, and HITECH and the ACA are finally pushing toward real standardization and data interchange, but from where I'm sitting (working in healthcare integration), it's probably going to take us another decade to sort out the mess things are in today.
While this is true, one of the problems currently being faced by the industry right now is that all of these niche vendors have their own ideas about how data should be handled, and it's resulted in a fair amount of balkanization of the healthcare IT industry.
It's getting better, and HITECH and the ACA are finally pushing toward real standardization and data interchange, but from where I'm sitting (working in healthcare integration), it's probably going to take us another decade to sort out the mess things are in today.
>In the emerging health and wellness markets, startups like Oscar intimately disrupt and destroy their customer's lives through incorrect datasets where an A/B testing mentality results in exorbitant fees, angry hospital administrators and patients with no recourse except to bankrupt themselves paying bills they didn't expect.
This doesn't make sense to me. How is an A/B testing mentality at fault for this? It has nothing to do with the incorrect datasets... you don't A/B test your data structure... I hope. A/B tests are blamed later in the article too, not really sure why.
This doesn't make sense to me. How is an A/B testing mentality at fault for this? It has nothing to do with the incorrect datasets... you don't A/B test your data structure... I hope. A/B tests are blamed later in the article too, not really sure why.
This story seams par for the course when dealing with insurance companies regardless of if it's startup or not. I've had the same exact issue with everyone from "United" to "Humana" and more recently "HealthNet" You will be told something is in network and it's not, a lab location is listed on their website as in network and then they claim it's not covered later. Sadly, this seems to be an area where legislation needs to bring out the big stick and force them to cover services that they had listed as "in-network" bad data is no excuse.
Wish more people knew this. A lot of professionals on here might personally have a stellar health insurance plan through their employer that covers almost anything no questions asked, but those same big insurers will administer cut-rate plans to the majority of plan-holders and deny payment at the drop of a hat, or pick and choose what necessary care / medications they will / won't pay, often after the fact, seemingly arbitrarily or if submitted paperwork isn't flawless.
It's a pretty good racket really; provide quality, hassle-free coverage to the high income, professional class, or anyone else that might have any say or sway or influence in government, and then for the working class majority refuse to ever pay out more per person than you are payed. That way you can cost-save like crazy and make obscene profits, but no one that matters cares and based on their experience it just looks like belly-aching and blowing things out of proportion.
It's a pretty good racket really; provide quality, hassle-free coverage to the high income, professional class, or anyone else that might have any say or sway or influence in government, and then for the working class majority refuse to ever pay out more per person than you are payed. That way you can cost-save like crazy and make obscene profits, but no one that matters cares and based on their experience it just looks like belly-aching and blowing things out of proportion.
In the U.S., insurance is regulated by the states and each state has a regulatory agency where one can go with complaints about insurance companies. I find it surprising that the abused customer in this story didn't file a complaint with the government. That would have probably made the insurance company stand up and take notice much more than complaining about them on Twitter.
I never knew this, and sincerely doubt most people do. But besides this rare start-up, if you're an established player like Blue Cross, does one or dozens or even hundreds of complaints even matter?
Why not link directly to the article than that slow feed site?
http://valleywag.gawker.com/what-happens-when-a-healthcare-s...
http://valleywag.gawker.com/what-happens-when-a-healthcare-s...
Because valleywag is a banned domain on HN for some reason
From the Oscar front page: "Free doctor visits via phone". WTF is this? How can a doctor visit by phone?
All this story is just a smell on how deeply broken the entire US health system is (together with all the healthcare-systems of 3rd world countries).
This was part of the coverage I had with QLiance in Seattle. I could send an e-mail or call my doctor on the phone and get a prompt response.
At one point we went from "noticed problem" to "discussed via e-mail" to "at the clinic being treated" in an hour. Other times, we'd notice a problem and solve it entirely via e-mail or phone, and save the clinic visit entirely.
At one point we went from "noticed problem" to "discussed via e-mail" to "at the clinic being treated" in an hour. Other times, we'd notice a problem and solve it entirely via e-mail or phone, and save the clinic visit entirely.
I could see this being really useful. There are many times I have needed questions answered by the doctor (e.g. I've been diagnosed with x - can I still do y safely) and the only way is with an appointment which wastes both our time. I wish my local GP would set aside 1 hour per day to answers questions via email or phone. It would make things much more efficient.
The issue with that, is there's no good way for the doctor to get paid for doing it. Prior to 2009 there was no billing code for phone calls or email and currently the rules around what is a "billable" consultation are complex and the coverage by insurers is far from uniform.
More info here: http://patients.about.com/od/followthemoney/f/Why-Doctors-Wo...
More info here: http://patients.about.com/od/followthemoney/f/Why-Doctors-Wo...
I was thinking more about my own healthcare system where the government pays the doctor. So his salary would just stay the same. In the US or other systems like it I can see how that would be an issue.
well use something like the UK model where dr's can have both a NHS contract plus private patients.
This is actually a Valleywag article, which is a banned domain on HN so the original link is using a workaround to show the article. (http://valleywag.gawker.com/what-happens-when-a-healthcare-s...)
In this case, the article is actually pretty good.
In this case, the article is actually pretty good.
Valleywag shouldn't be banned. It can be a bit gleeful about the Valley's moral meltdown, but it's the only outfit in "the tech press" that tells the truth. Everything else is payola.
I agree that Valleywag shouldn't be banned on the basis that they often contribute unique articles not discussed by other tech outlets. (e.g. http://valleywag.gawker.com/the-laundry-quarters-startup-is-...)
Although to be fair, there are a few "rich people in tech suck because they're rich" articles which are more hostile.
Although to be fair, there are a few "rich people in tech suck because they're rich" articles which are more hostile.
Although to be fair, there are a few "rich people in tech suck because they're rich" articles which are more hostile.
Not because they're rich, but because they've departed so far from the founding values of technology.
Picking on the average "Google bus" rider is mean-spirited and pointless, but the "leaders" of private-sector technology really are rapacious assholes. This sector of the economy really is run by horrible human beings and pointing out is not mindless hostility, but confronting one of the most important issues that our generation faces.
Not because they're rich, but because they've departed so far from the founding values of technology.
Picking on the average "Google bus" rider is mean-spirited and pointless, but the "leaders" of private-sector technology really are rapacious assholes. This sector of the economy really is run by horrible human beings and pointing out is not mindless hostility, but confronting one of the most important issues that our generation faces.
I'm curious what you think "the founding values of technology" are, and when they were established (the founding of "technology"? Like the wheel? Or just transistor-based technology?), and by whom/what.
I'm curious what you think "the founding values of technology" are
I'm talking about the pay-it-forward culture of the 1950-70s Valley when it was cheap to live there and people did everything they could to help each other out. This was the era when Hewlett-Packard refused to do a layoff: instead, it cut costs with a 10% pay cut and a day off work every other week. There was a time when software had an R&D culture, and Northern California was full of people trying to do something new and interesting.
Now, startups are a safety career for failed McKinseys and Goldmanites, whose VC friends put them into executive positions and let them boss nerds around, but it wasn't always that way. You didn't go in thinking you'd be a billionaire, but you could get what would now be an upper-middle-class lifestyle and work in the sort of R&D environment that doesn't exist anymore, because the slimeballs killed it.
I'm talking about the pay-it-forward culture of the 1950-70s Valley when it was cheap to live there and people did everything they could to help each other out. This was the era when Hewlett-Packard refused to do a layoff: instead, it cut costs with a 10% pay cut and a day off work every other week. There was a time when software had an R&D culture, and Northern California was full of people trying to do something new and interesting.
Now, startups are a safety career for failed McKinseys and Goldmanites, whose VC friends put them into executive positions and let them boss nerds around, but it wasn't always that way. You didn't go in thinking you'd be a billionaire, but you could get what would now be an upper-middle-class lifestyle and work in the sort of R&D environment that doesn't exist anymore, because the slimeballs killed it.
And the moderators of HN can still choose to use their discretion to remove certain articles, without necessarily banning an entire news outlet.
Most of ValleyWag articles are extremely biased and twisted.
There are actually too many things to list, their Uber coverage, their coverage of start-up 'parties' and how people are throwing money there (while Gawker holds the same parties) etc.
Then you have this:
https://www.youtube.com/watch?v=_jtmFlUg56w
There are actually too many things to list, their Uber coverage, their coverage of start-up 'parties' and how people are throwing money there (while Gawker holds the same parties) etc.
Then you have this:
https://www.youtube.com/watch?v=_jtmFlUg56w
That's a bit cynical, no? Everything else is payola?
Who knows why certain publications are banned. Maybe it's not their content but that they spammed the site and with sockpuppets?
That said, I'd like to fewer filters on which publications are banned. I submitted something from CNET that went to auto-dead. Seems like something I'm sure Dan and team are on top of. Why not send them note?
Who knows why certain publications are banned. Maybe it's not their content but that they spammed the site and with sockpuppets?
That said, I'd like to fewer filters on which publications are banned. I submitted something from CNET that went to auto-dead. Seems like something I'm sure Dan and team are on top of. Why not send them note?
I find the phrase "Don't A/B test with people's lives" to be in search of something catchy, or a zinger. The reality of big insurance has always been to be paid more than they pay out. Simple. You've always been a number to an insurance company.
> The reality of big insurance has always been to be paid more than they pay out.
Well yes, that's how a company stays solvent...
The problem with health insurance is that it's been perverted into a discount club rather than being insurance for catastrophic occurrences. It divorces consumers from the true cost of services and hence service providers are free to play with the costs all they want. Hell, you can't even really get an upfront estimate for a procedure...
Car insurance covers accidents, theft, etc. That's it. Can you imagine how much e.g., an oil change would cost if it were commonplace to use car insurance for such routine maintenance? That's what really went wrong with health insurance in the US, and we're too far down that road to fix it.
Well yes, that's how a company stays solvent...
The problem with health insurance is that it's been perverted into a discount club rather than being insurance for catastrophic occurrences. It divorces consumers from the true cost of services and hence service providers are free to play with the costs all they want. Hell, you can't even really get an upfront estimate for a procedure...
Car insurance covers accidents, theft, etc. That's it. Can you imagine how much e.g., an oil change would cost if it were commonplace to use car insurance for such routine maintenance? That's what really went wrong with health insurance in the US, and we're too far down that road to fix it.
I've always viewed it as an arms race to see who can get away with what between providers, insurers, and patients (and before ACA, employers to a degree).
The true cost of service at this point includes having staff and systems (with their own support staff) to negotiate and calculate the cost on both the insurer and the provider side.
So, in a way, if you have one particularly tough to deal with insurer, that cost gets distributed among all patients, and their insurers as well. In addition, the basic cost of any visit now includes some of that administrative overhead.
In the oil change analogy, if you had to walk into the shop, and there was a base price of $50 to cover the administrative costs, you had to wait until you saw a mechanic to decide if you really needed an oil change, and they charged $50, and then you paid the $20 dollars for the oil change, you can bet by now someone would have started marketing a per-visit copay style insurance for cars too.
None of this is to say I disagree with you, just that it's even worse than I think we all think it is.
The true cost of service at this point includes having staff and systems (with their own support staff) to negotiate and calculate the cost on both the insurer and the provider side.
So, in a way, if you have one particularly tough to deal with insurer, that cost gets distributed among all patients, and their insurers as well. In addition, the basic cost of any visit now includes some of that administrative overhead.
In the oil change analogy, if you had to walk into the shop, and there was a base price of $50 to cover the administrative costs, you had to wait until you saw a mechanic to decide if you really needed an oil change, and they charged $50, and then you paid the $20 dollars for the oil change, you can bet by now someone would have started marketing a per-visit copay style insurance for cars too.
None of this is to say I disagree with you, just that it's even worse than I think we all think it is.
Comparing cars to human beings is disingenuous. A car is a machine with a finite number of parts and well-documented methods of action.
A human body is an enormously complicated set of systems that can mysteriously fail at anytime for no reason at all, and then fix itself without intervention at times. There is a reason doctors are "in practice."
A human body is an enormously complicated set of systems that can mysteriously fail at anytime for no reason at all, and then fix itself without intervention at times. There is a reason doctors are "in practice."
If insurers didn't make money, they wouldn't coordinate insurance plans.
They're middlemen, like so many HN readers aspire to be, because there are efficiencies to be found in the middle. Insurance is a way of crowd-funding risk, though we rarely talk about it in those terms.
They're middlemen, like so many HN readers aspire to be, because there are efficiencies to be found in the middle. Insurance is a way of crowd-funding risk, though we rarely talk about it in those terms.
It happened to me ~10 years ago with another health care startup. The sign up booklet looks good and we switch to it. I was with a big company ( - Nokia )at that time. But when the time comes to pay hospital/doctor bill, it has all kind of reasons not too.
I documented the phone calls with them, put the detail on a yahoo group and make sure the group was opened to everyone who want to join and also invited their company's PR/Marketing to join that group.
The issue was resolved immediately. I don't think that company is alive today. Healthcare insurance start up is not easy. I don't trust them base on that experience.
The main issue with insurance is always how much you can trust them when they need to pay up. In the short term, they can always promise low rate to get your attention. But that only get the young folks to switch. After one been thru the experience I been thru, it is hard to trust that kind of company again.
In today's internet age, it is impossible for any "startup insurance" company to do that kind of "hack" to try keep their cash flow and not immediately to have their reputation out to everyone in the world.
I documented the phone calls with them, put the detail on a yahoo group and make sure the group was opened to everyone who want to join and also invited their company's PR/Marketing to join that group.
The issue was resolved immediately. I don't think that company is alive today. Healthcare insurance start up is not easy. I don't trust them base on that experience.
The main issue with insurance is always how much you can trust them when they need to pay up. In the short term, they can always promise low rate to get your attention. But that only get the young folks to switch. After one been thru the experience I been thru, it is hard to trust that kind of company again.
In today's internet age, it is impossible for any "startup insurance" company to do that kind of "hack" to try keep their cash flow and not immediately to have their reputation out to everyone in the world.
I have posted it before, but any time a healthcare thread pops up I like to mention a project I co-founded (before Obamacare/Affordable Healthcare Act).
Primary care coverage for $20/month $10 copay for ARNP/PA visits and $25 copay for Doctor visit. Even if someone is covered on the exchange this type of primary care plan can be far more cost effective than paying the copays under many of the plans. See: http://pfccmember.com/Membership_Plans.html
>So I went to my new Oscar-approved doctor, who recommended routine blood work...On April 28th 2014, I received a first bill from the hospital detailing how Oscar covered none of the in-hospital labs and I would need to pay $1640. A second round of labs before April 28th pushed the total bill to over $2000.
Even our little start-up was able to negotiate $99 for blood work labs, which is out of pocket to the patient. If the same patient uses insurance that rate skyrockets, usually requiring patients to pay out of pocket anyway because of giant deductibles.
Primary care coverage for $20/month $10 copay for ARNP/PA visits and $25 copay for Doctor visit. Even if someone is covered on the exchange this type of primary care plan can be far more cost effective than paying the copays under many of the plans. See: http://pfccmember.com/Membership_Plans.html
>So I went to my new Oscar-approved doctor, who recommended routine blood work...On April 28th 2014, I received a first bill from the hospital detailing how Oscar covered none of the in-hospital labs and I would need to pay $1640. A second round of labs before April 28th pushed the total bill to over $2000.
Even our little start-up was able to negotiate $99 for blood work labs, which is out of pocket to the patient. If the same patient uses insurance that rate skyrockets, usually requiring patients to pay out of pocket anyway because of giant deductibles.
It is absolutely ridiculous how pricing schemes like that are even legal. Have insurance that covers a non-typical lab test? They bill $1000 to your carrier (regardless of what th e contracted rate will be) and you are usually responsible for a fraction of that because of deductibles. Don't have insurance and are a cash-only customer? They bill you $150. Have insurance and insurance declines to pay? You get billed $1000.
A real example of this, my son had a routine vaccination performed at a Baylor clinic and my insurance company drug their feet on remitting payment to them. So, Baylor turned around and invoiced me for $1250 and was ready to send that to collections. Turns out that the agreed rate with my insurance carrier for that vaccination was well under $100.
A real example of this, my son had a routine vaccination performed at a Baylor clinic and my insurance company drug their feet on remitting payment to them. So, Baylor turned around and invoiced me for $1250 and was ready to send that to collections. Turns out that the agreed rate with my insurance carrier for that vaccination was well under $100.
It gets even worse than that. Some people are stuck with an HSA.
A HSA is not insurance (it covers nothing), but it looks like insurance (so hospitals still charge you the 'ten times more' price).
A $100 doctor visit, becomes $900 "charged" to your HSA (because you 'have insurance' so they can eat the artificially-inflated cost). But since HSA never covers anything, the insurance always just passes that $900 bill on to you. They stamp "THIS IS NOT A BILL" on the top, but that's a lie, it always requires you to pay money.
You call up the hospital and explain "I don't have insurance, I need the sane price." They say "we can't give you that price, you have insurance." No one in healthcare understands that HSA's aren't insurance, and cover nothing, so no one will let you pay a manageable sum of money.
A HSA is not insurance (it covers nothing), but it looks like insurance (so hospitals still charge you the 'ten times more' price).
A $100 doctor visit, becomes $900 "charged" to your HSA (because you 'have insurance' so they can eat the artificially-inflated cost). But since HSA never covers anything, the insurance always just passes that $900 bill on to you. They stamp "THIS IS NOT A BILL" on the top, but that's a lie, it always requires you to pay money.
You call up the hospital and explain "I don't have insurance, I need the sane price." They say "we can't give you that price, you have insurance." No one in healthcare understands that HSA's aren't insurance, and cover nothing, so no one will let you pay a manageable sum of money.
HSAs are, by legal requirement, only available if you are enrolled in a High-Deductible Health Plan [1], which is insurance and does pay for something, though (as the name suggests) it has a very high annual deductible (for which the HSA is used).
So if you have an HSA, you do, in fact, have insurance.
[1] http://en.wikipedia.org/wiki/Health_savings_account
So if you have an HSA, you do, in fact, have insurance.
[1] http://en.wikipedia.org/wiki/Health_savings_account
or you might have an HSA left over from when you used to have insurance. (FSAs expire at the end of the year, but HSAs are permanent.)
I have to have a set of bloods 5-6 tests every 6-8 weeks plus 4 quarterly ones for the royal free as a result of my condition - god only knows what that would cost in the USA as people say bless the NHS
With bogus physician bills my SOP is to call the office and tell them that I will let the bill run to collection and dispute it in court. This strategy never failed, physicians are mortally afraid of having to admit that their billing practice is questionable.
With refunds from the insurance company I have found that a nice letter "please pay up 10 days from now or I will get a title in court" works wonders. I never had to no, not once.
With refunds from the insurance company I have found that a nice letter "please pay up 10 days from now or I will get a title in court" works wonders. I never had to no, not once.
More likely, doctors are very averse to lawsuits, and would sooner provide care to one patient at a loss than defend against a lawsuit, especially when it doesn't seem like a bluff because you seem like someone who could afford it (not typical btw).
A mature way to handle this is to ask for a copy of the bill for clients that are paying directly, without insurance.
Please don't take me to court now.
Please don't take me to court now.
I had a conversation with a friend recently who was a doctor. He was telling me that he had 3 patients in a fairly short period of time that had come in with mysterious symptoms (they were all in their 70's) and that had died soon after being admitted. While he knew that he had technically done everything by the book to treat them, he worried that he had made a mistake along the way that possibly could have been the cause of their death.
It made me appreciate that the code that I produce as a web developer most of the time would never have me facing those same ethical dilemmas -- there are very few times a bug in a web app would cause people to die or to be financially ruined.
In this case, however, you can see what happens when an ambitious startup ends up trying to apply things web developers had done for years (A/B testing, "design" decisions) to avenues of life where people's livelihood or health is at stake -- people can end up getting hurt. "Failing hard and fast", the motto many people have regarding startups, cannot be taken with the same arrogance. If you want to change the world in ways that impact people on a personal level, be ready to be very careful with the trust your customers put in you.
It made me appreciate that the code that I produce as a web developer most of the time would never have me facing those same ethical dilemmas -- there are very few times a bug in a web app would cause people to die or to be financially ruined.
In this case, however, you can see what happens when an ambitious startup ends up trying to apply things web developers had done for years (A/B testing, "design" decisions) to avenues of life where people's livelihood or health is at stake -- people can end up getting hurt. "Failing hard and fast", the motto many people have regarding startups, cannot be taken with the same arrogance. If you want to change the world in ways that impact people on a personal level, be ready to be very careful with the trust your customers put in you.
Absolutely.
I've been in healthcare for a bunch of years (I dunno, sheesh, I guess like 14?). For a big stint of that I built systems that aim to prevent medication errors in hospitals by telling clinicians when doses were due, etc.
I know of at least two incidents where code that I wrote failed in a way that (due to some edge-case concurrency in one case, and daylight savings time in another case) didn't make it clear to a nurse that another nurse had given a medication to a patient and the patient received a double-dosage of a pretty severe drug.
Imagine getting that call. It's every bit as fucking terrible and humbling as you'd think.
Far more numerous (thankfully) were the calls that we got reporting that we stopped double dosages or even order-of-magnitude label misreadings on drugs. I know of more than a handful of instances that code I wrote may have literally saved a life.
I've been lucky to have found myself at companies that take this stuff really, really seriously. It's a really hard balance to strike when failure is as devastating as it can be in healthcare, but the status quo is pretty terrifying also. In general every health IT shop's culture finds some balance between making decisions based on fear, and trying to achieve a velocity that allows problems to be fixed quickly and the greatest positive impact possible against the problem they're solving.
I talk to a lot of people who want to work on "big/real problems" and list "healthcare" as one of them but when it comes down to it are often pretty freaked out about the stakes. It's weird to be used to the gravity of it, I certainly am now. I can't even wrap my head around what it would mean to work on something that doesn't hurt people when it fails.
I've been in healthcare for a bunch of years (I dunno, sheesh, I guess like 14?). For a big stint of that I built systems that aim to prevent medication errors in hospitals by telling clinicians when doses were due, etc.
I know of at least two incidents where code that I wrote failed in a way that (due to some edge-case concurrency in one case, and daylight savings time in another case) didn't make it clear to a nurse that another nurse had given a medication to a patient and the patient received a double-dosage of a pretty severe drug.
Imagine getting that call. It's every bit as fucking terrible and humbling as you'd think.
Far more numerous (thankfully) were the calls that we got reporting that we stopped double dosages or even order-of-magnitude label misreadings on drugs. I know of more than a handful of instances that code I wrote may have literally saved a life.
I've been lucky to have found myself at companies that take this stuff really, really seriously. It's a really hard balance to strike when failure is as devastating as it can be in healthcare, but the status quo is pretty terrifying also. In general every health IT shop's culture finds some balance between making decisions based on fear, and trying to achieve a velocity that allows problems to be fixed quickly and the greatest positive impact possible against the problem they're solving.
I talk to a lot of people who want to work on "big/real problems" and list "healthcare" as one of them but when it comes down to it are often pretty freaked out about the stakes. It's weird to be used to the gravity of it, I certainly am now. I can't even wrap my head around what it would mean to work on something that doesn't hurt people when it fails.
Also in the industry, but on the HL7 interface side.
I think you've hit the nail on the head. I've seen studies that suggest, for example, a 75-90% reduction in med error rates in hospitals that have gone to computerized barcode systems. So there's a tremendous amount of good to be done in the field.
But, as you point out, the potential damage that can be done by mistakes makes for a fair bit of anxiety at times. Fortunately, it's been my experience that people in the field tend to take testing very seriously as a result.
Another interesting thing on that aspect - I'm one of the only people in my department that doesn't have a prior clinical background. I almost wonder if the fact that they're less trusting of the technology at times is a good thing to some extent.
I think you've hit the nail on the head. I've seen studies that suggest, for example, a 75-90% reduction in med error rates in hospitals that have gone to computerized barcode systems. So there's a tremendous amount of good to be done in the field.
But, as you point out, the potential damage that can be done by mistakes makes for a fair bit of anxiety at times. Fortunately, it's been my experience that people in the field tend to take testing very seriously as a result.
Another interesting thing on that aspect - I'm one of the only people in my department that doesn't have a prior clinical background. I almost wonder if the fact that they're less trusting of the technology at times is a good thing to some extent.
>I'm one of the only people in my department that doesn't have a prior clinical background. I almost wonder if the fact that they're less trusting of the technology at times is a good thing to some extent.
I totally agree. Over time I've come to really value working with teams made up of a variety of backgrounds. I think it's incredibly valuable to not end up in group-think on either end of the spectrum when it comes to how to approach problems, assessing risk, and healthy cynicism about technology.
I totally agree. Over time I've come to really value working with teams made up of a variety of backgrounds. I think it's incredibly valuable to not end up in group-think on either end of the spectrum when it comes to how to approach problems, assessing risk, and healthy cynicism about technology.
And when the code does matter, too many don't realize the importance of getting their shit straight.
Privacy and user information is a "light" example, but a very basic one that should instill a bigger sense of responsibility than most developers have.
Privacy and user information is a "light" example, but a very basic one that should instill a bigger sense of responsibility than most developers have.
I recall hearing a discussion on the radio from a medical administrator re: the rate autopsies. IIRC the rate of autopsies has dropped dramatically in past few decades. There are many short-term administrative, financial & legal reasons to skip an autopsy, but it seems like a bad trend. While it's not ethical to A/B test human medical treatment in regular care, autopsies would seems like a critical data source to make improvements in health care - seems like yet another variant of "tragedy of the commons" problem that the rates are systematically declining.
With a healthcare startup, you will almost always pay more. Large insurance companies are able to bargain the best rates through many means based upon their size.
Even when the provider disagrees (with capitated services for example) and bills the member, the larger insurance companies will reimburse the member and then bill the provider.
Even when the provider disagrees (with capitated services for example) and bills the member, the larger insurance companies will reimburse the member and then bill the provider.
I'm sorry but I've had all these problems and many more with traditional health care companies. As a diabetic I'm intimately familiar with the health care system. It's a hard space to work in and I'm happy to see startups trying to tackle it. But it won't solved soon. Unlike Dropbox, where they "solved" sync more or less there is no one thing in health care, but many.
Sorry for over repeating what people always say, but I am genuinely so grateful for the UK's NHS.
I get private healthcare in the UK through my job - the only time we have used it was when my teenage son got his tonsils out.
What was amusing was that at one point the anaesthetist came up and said there had been a mistake in the billing and I'd have to pay part of the bill directly. Having heard all the horror stories from the US I was thinking it was going to be a huge amount of money - he very apologetically gave me a bill for £12.00 (yes, twelve pounds) :-)
[NB Worth noting that although we do have private health care, anything serious that has happened to us over the last few years was fixed by the NHS].
What was amusing was that at one point the anaesthetist came up and said there had been a mistake in the billing and I'd have to pay part of the bill directly. Having heard all the horror stories from the US I was thinking it was going to be a huge amount of money - he very apologetically gave me a bill for £12.00 (yes, twelve pounds) :-)
[NB Worth noting that although we do have private health care, anything serious that has happened to us over the last few years was fixed by the NHS].
You smug bastard. Joking, but i'm in the US and have had so many issues in my life with huge medical bills and debt collectors, denial of care, insurance refusing to pay because a doctor messed up the paperwork, insurance not covering certain medications, or saying the dosage needed to be changed, that i'm almost not. :-p
Well, as anyone will tell you who lives in the UK, the NHS isn't perfect, but I personally happen to think that the model we have of a pretty good health care system for everyone and private health care for the tiny minority who want it seems to work fairly well.
Mind you the NHS is socialism... but perhaps telling that the founder of the NHS, Aneurin Bevan, called his book on the subject In Place of Fear - which sums it up really.
http://en.wikipedia.org/wiki/Aneurin_Bevan
NB I find illnesses and injuries in a family stressful enough to deal with as it is - adding bureaucracy and financial stresses would be a nightmare.
Mind you the NHS is socialism... but perhaps telling that the founder of the NHS, Aneurin Bevan, called his book on the subject In Place of Fear - which sums it up really.
http://en.wikipedia.org/wiki/Aneurin_Bevan
NB I find illnesses and injuries in a family stressful enough to deal with as it is - adding bureaucracy and financial stresses would be a nightmare.
Sometimes that works out but I believe that a new entrants chances of success are a lot higher if they have somebody on board who is actually familiar with the industry sector they're trying to disrupt.
None of Oscar's founders have worked in health insurance previously. They come from tech entrepreneur/VC, consulting and technology backgrounds.
Edit: Here's a good example of where some industry expertise might have been useful: "..it was a design decision to limit the information presented to hospital's on what is covered in detail (like inhouse labs)."
There's currently a big trend in design towards making things simple. But there's a difference between making stuff simple and dumbing it down. Sometimes, stuff looks complicated because it's complicated.