anon7000
2 days ago
> the valorization of profit has blinded them to seeing the advantages of the public good as a worthy bottom line
This is, IMO, the critical line, and also one of the deepest problems in the world (and especially America).
A focus on profit is so frequently completely opposed to human wellbeing and a flourishing society. Just look at health insurance companies for a prime example: they make profit by denying claims. The result is a catastrophically expensive insurance bureaucracy and worse health outcomes. Not to mention the extreme stress any American feels when interacting with an insurance company over any meaningful amount of money. (Which I’ve experienced, and I have far better coverage than the average American.)
These companies are so clearly, obviously bad for human flourishing. But profit is great!
The incentives are so deeply messed up. Our economy only allows profit as an incentive, which works well when aligned with human wellbeing-being. But as the economy grows, companies consolidate, and profit growth is still expected, nearly every single sector looks for ways to cut costs. And with fewer competitors, it’s easier and easier for entrenched, powerful companies to raise prices and reduce quality with little consequence.
This is clearly bad for human flourishing. But profits are fantastic!
Just because profit is actually aligned with human flourishing in a couple sectors doesn’t mean the system as a whole will continue scaling effectively. It’s clearly not, and it must change to avoid completely suffocating us.
II2II
2 days ago
I would argue that greed is the problem, not profit.
One could argue that government policies are anything but altruistic. They fund public education because you need an educated workforce. They fund public health insurance because a healthy workforce is a productive workforce. You distribute the cost over the entire population. Both remove direct costs from employers (e.g. training and providing private health insurance). Both have a tendancy to reduce costs and improve consistency because you are working at a larger scale. It also creates order in society since people generally feel as though more of their needs are being met, and they feel less exploited. All of this contributes to profit both on a social scale and for individual businesses.
Somewhere along the line people forgot the lessons of the 20th century. They forgot that profit goes beyond a line on the current financial statement. It also reflects long term interests.
energy123
2 days ago
Human nature (greed) is never the problem, because it cannot be changed. Focus only on what can be changed. Design a system that manages human nature, pointing it in a direction that is beneficial, while taming its side effects.
A denial of human nature is how you get authoritarian socialism with centralized planning, which leads to catastrophe because of the local knowledge problem, and because people have no private incentive to do anything.
"Capitalism" is an incomplete first step towards a system which channels greed into something that's beneficial for all stakeholders. A profit-driven actor making their production more efficient to increase profits is a good thing for everyone.
But capitalism is incomplete because the profit-motive can become pathological. Market failures are commonplace.
The only solution that is proven to work is a mixed economy done right, with clever and lean regulations, and a government not influenced by money, and with the government stepping in occasionally to provide public goods that the market cannot, and with private actors otherwise free to make profits as long as they are not harming any third parties.
arunabha
2 days ago
> Human nature (greed) is never the problem, because it cannot be changed. Focus only on what can be changed.
The statement might appear to be pedantically true, but it's not true in practice. Sure, greed cannot be eliminated, but you certainly have systems which control the actions which result from greed. In reality, the actions brought on by greed are the real problem and we have an entire branch of the US govt(the legislature) dedicated to setting up mechanisms(laws) to discourage unwanted actions via threat of consequences.
So, it's certainly possible to mitigate the effects of greed. What people are pointing out is that of late corporations(and more specifically the C suite) have faced few if any consequences for detrimental behaviour driven by greed.
Hence the problem.
energy123
2 days ago
We are saying the same thing.
TFYS
2 days ago
> centralized planning, which leads to catastrophe because of the local knowledge problem, and because people have no private incentive to do anything.
The local knowledge problem might have been an issue with central planning a few decades ago, but I don't think it is anymore. Everyone now has in their pocket a device with which they're able to instantly send any kind of information anywhere. We now have computers and software powerful enough to process all this information. The price mechanism is an ancient, inefficient and slow way to transmit information compared to what we could achieve today if we really wanted to.
People have all kinds of incentives other than profit. People wouldn't just lie down and die if they couldn't make money by owning things. The failures of past attemps at planning had more to do with the limited technology they had and the poor decision-making structure that centralized power and allowed too much corruption. That doesn't mean planning will always have that kind of a result.
> a government not influenced by money
This is impossible in capitalism, which will always over time create concentrations of capital large enough that influencing the people in government will become affordable, no matter how hard you make it. Government is just people, and there'll always be ways to influence people using money. In a well designed government it would be hard and expensive, but you can never make it impossible. Eventually a corporation or an individual will become so wealthy that they can afford it, and at some point conditions will arise where influencing the government will be a cheaper way to increase profits than fairly competing in the market.
energy123
2 days ago
> The local knowledge problem might have been an issue with central planning a few decades ago, but I don't think it is anymore.
I think you are right in principle. The signals can be centrally computed, if all the relevant edge data was somehow made available to the central compute. I see two practical problems. What is the actual probability that a government won't royally screw it up? I would give a pessimistic assessment given the lack of theory and lack of empirical case studies. If a government wanted to run a small opt-in test case, I would not be opposed to it, but I would expect it to fail. In any case, why would you want to risk it? Why not just do market socialism?
The other practical problem is the incentive question. I read what you wrote, but I can't help but feel it's a bit hand-wavey. Maybe you have a personal constitution that means you don't need to work for profit. But I believe most people, including myself, would only do the minimum if no personal gain was involved, unless it was a truly unusual circumstance like someone invaded my country which stoked nationalist fervor. But in a normal economy in a normal country, I do not believe you will be able to sustain high output or high innovation.
> This is impossible in capitalism
It's an ideal that's impossible, but you can asymptote rather close, there are a number of social democracies (which are mixed economy, i.e. capitalist) in Europe that attest to that.
TFYS
2 days ago
> Why not just do market socialism?
Because markets are based on competition, and that causes a lot of issues on it's own, even in the absence of capitalism. It's because of competition that we consume too much resources, have wars between nations, etc. I don't think we can get rid of a lot of the problems we have unless we start actually planning long term and co-operating instead of competing. I agree with you that it'd be hard and risky to build a working planned economy, and that it'd be best to start with small scale tests. I just don't see how humanity will survive unless we start planning at a very large scale and stop competing with each other. A global planned economy is the only way to do that.
> But I believe most people, including myself, would only do the minimum if no personal gain was involved
I don't think all personal gain needs to be removed in a planned economy. There could be different rewards for different tasks, if achieving the plan requires it. What is not necessary is the ridiculously large differences between rewards. It's enough that the reward is somewhat motivating, there's no need to have some tasks be thousands or millions of times more rewarding than others. If there are tasks that wouldn't get done in the absence of rewards so large, surely they are rare and worth leaving undone for the other benefits of a planned economy.
> there are a number of social democracies (which are mixed economy, i.e. capitalist) in Europe that attest to that.
I live in one of the best managed ones, and still we're slowly but surely losing our government to the influence of capital. Media is concentrating, worker rights and unions are being attacked, etc. It takes a long time in a well designed system, but eventually capital will win. Even if we manage to get a government that tries to protect the rights of people over capital, the realities of a global economy based on competition don't allow that anymore. If we try, we lose to countries that don't and then we can no longer afford it.
energy123
2 days ago
I don't believe there's any connection between market competition and security competition, even though they both belong to the abstract category of "competition".
Conflict deaths were higher before modern capitalism, and were the highest per capita in hunter gatherer societies that don't have the social construction of private property. The 20th century communist states weren't more peaceful than capitalist states. The level of brutalization was often more extreme, like the Holodomor or the ethnic cleansing of Tartars from Crimea perpetrated by Stalin. China being no exception as the invasion of Vietnam shows. Or the agrarian communist Pol Pot and his genocide of his own people with a focus on ethnic Vietnamese. Or compare the brutality of the Soviet invasion of Afghanistan to the US invasion of Afghanistan. Conflict deaths were the lowest in all of human history in the most capitalist era of human history, the 1990s, during American unipolar hegemony.
The primary driver of conflict is the absence of a stable polar power, whether that power is capitalist or communist, and the resulting security competition that naturally emerges between actors with different interests when they're put inside this anarchic power vacuum with nobody to protect them but themselves, causing paranoia and preemption. The easiest path to return to a low conflict world would be just to return to American hegemony as it was in the 1990s before Russian imperial belligerence and Chinese revisionism around Taiwan were even possible due to American unipolar deterrence being unquestionable. It would be a capitalist world, but it would certainly also be the most peaceful world in human history, notwithstanding the relatively small number of conflicts that would still occur.
The liberal perspective on all this would be that the biological drive to compete with our fellow people is not something that can be suppressed, because it's an evolved trait that is part and parcel of existing as a primate. It's something to channel into less destructive activities like sports, games, or interests, and it's something to control and shape and unleash with regulations and systems. And no liberal would say that this is a perfect state of affairs, only that it's the least bad state of affairs that can be practically achieved given our biology and the real-world constraints that we need to work with.
TFYS
a day ago
Security competition is about securing resources. Markets are a mechanism for deciding who owns and how to use those resources. They are very closely related. If one country gets competitive advantage in the global market for owning a piece of land with some resource, that creates an incentive for conflict over that piece of land. If instead the two countries were a part of the same planned economic system that distributes resources in a fair way towards a plan that both countries have agreed upon, there would be no such incentive. There wouldn't even be a need for separate nations to exist, as the primary purpose of those is to secure resources in a competitive environment to your group of people.
You're right that conflict did exist before capitalism and even markets, but the systems before capitalism were also based on competition. Tribes competed for hunting grounds, kings competed for land, etc. They didn't come together and agree upon a plan that would best provide for all people equally. They had no means to do so. With modern technology we now do. Even the conflict within communist countries I would say was due to competition over positions of power and competition against countries trying to fight communism. A working planned economy would need to prevent such positions of power from existing to prevent that from happening. We'd need to design ways to make good decisions using direct democracy to avoid centralizing power and the competition over that power.
There might be a biological drive behind greed and competition, but I don't think that's a reason to use them as the base of our economic and political systems. We also have a biological drive to co-operate with each other, we should try create more systems based on that.
energy123
a day ago
> If instead the two countries were a part of the same planned economic system
What you are proposing is a unipolar world order. That would create peace, but not due to its economic system. The shared security architecture is what causes peace. Any unipolar order is good enough for this task; see American capitalist hegemony in the 1990s. You can even have world peace with a mix of capitalist and communist states, as long as there is a unipolar security architecture that they're all part of.
Ask yourself, why is there no security competition between Texas and California? They are both capitalist entities, they could have been separate nation states had history run its course differently. The reason is the shared security architecture of the federal state that sits on top of them both. Their economic system is not relevant, but the power structure they exist in is. Why is there no security competition between the UK and France? It's because NATO sits on top of them both as the dominant polar security architecture. Why was there security competition between communist China and communist Russia during the Sino-Soviet split? It wasn't because of their economic system, it was the lack of a security architecture sitting on top of them both as China grew in power to the point it became a challenge to Russia.
> Security competition is about securing resources.
I would slightly deemphasize the role of resource competition. Competition over resources does happen, but it's often instrumental in nature. Hitler invaded the USSR to secure oil, but the oil wasn't the point, being able to continue the war economy on the Western front while having little access to indigenous oil was the point. Japan did a blitz through South East Asia in pursuit of oil in response to the US oil embargo, but again the oil wasn't the point, securing oil was instrumental to sustaining the imperial war machine. Even conflicts seemingly over land ownership often have a security component that is not well appreciated. You need land to ensure strategic depth, to preempt future belligerency, to ensure hydrosecurity, or to deny key staging points or radar locations. All of these zero-sum motivations for conflict disappear with a unipolar security architecture that subsumes all peoples.
TFYS
a day ago
But why is there a need for a security architecture in the first place? Because if you don't have it, some competing entity will come and take the resources that you cannot protect. In the absence of such a competing entity, there'd be no need for a security architecture. No one would come take your resources if everyone was equally a part of managing those resources. So yes, a security force strong enough to enforce peace among competing countries and businesses is one way to achieve peace, but another is to remove the need for such architectures altogether by getting rid of competition.
Of course if we did manage to create a global planned economy with no need for security, there's still a chance that some group of people would establish some entity that would try to take a bigger share for itself than what the planned system would provide them. That would mean there'd have to be some form of security even without competition to prevent us from "devolving" into a competitive state again. You might be right. We would not be able to get rid of conflict just by getting rid of competition, we'd need a security architecture to enforce it, and it could do that for any system. Maybe there'd be less need for enforcement in a system without competition, but you are right.
So a planned economy might not be a way to achieve lasting peace, but it'd still be a way to avoid the other issues caused by a competition based economy.
> Hitler invaded the USSR to secure oil, but the oil wasn't the point, being able to continue the war economy on the Western front while having little access to indigenous oil was the point.
Sure, but what was the point of expanding German land to begin with? Was it not to secure more resources for the German people and its leadership? Would they have attacked if there was no resources to be gained from it? If the reward for victory was that Hitler gets to see a bigger country on a map, bigger numbers under statistics of the population of Germany, some respect or whatever, but nothing in terms of resources, would the war have started? Wasn't one of the triggers the anger caused by the reparations that Germany was forced to pay for ww1?
tmaly
a day ago
Who decides the clever and lean regulations? How do we maintain the best ones when power changes hands in government?
p_v_doom
2 days ago
Human nature is not greed though. Human nature is very very varied and adaptive. And the historical norm of human nature is one of sharing, community and support, as much as such a claim can even be made. And human nature is subject to the whole bigger system in which it lives.
Capitalism is in many ways such a system, one that is built around driving the worst parts of human nature. And the thing is the profit motive becoming pathological is not a bug. This is the key defining feature of the system. Capitalism really isnt even about markets. Its about consumption, and producing things specifically to sell them in order to make some markup. The goal is specifically to find ways to make money, and stuff like fulfilling peoples needs, quality, workers rights, and regulations are clearly things that are getting in the way.
potato3732842
2 days ago
Exactly. I can't express the degree to which people thinking we can fix it with just one more surgical precision law drive me up the wall. They've clearly never tried to do anything regulated.
The second, third and Nth order consequences of the sum of the shortsighted quick fixes these people have peddled result in a world where only sociopathic corporate entities can do anything, and of course those entities are incredibly "greedy", they wouldn't be able to remain profitable if they weren't.
Those vacant main street store fronts (metaphorical or literal, your pick) are only half vacant because the PE fueled megacorp that owns them doesn't deem it worthwhile to rent them. The other half are vacant because the cost of jumping through the regulatory hoops to rent them in a lawful manner is unjustifiable for the small time owner.
energy123
2 days ago
> I can't express the degree to which people thinking we can fix it with just one more surgical precision law drive me up the wall.
I think there is misattribution here. Us neoliberals do not believe that things can be easily improved through incrementalism. We believe that the alternative methods proposed by other political/economic systems lack credibility, and so we are stuck with the least bad option that reality has forced upon us. We also believe that things can get much, much worse, which is not a belief that's emotionally salient to other camps, who we see as assuming that things can only get better, when what usually happens is some tinpot authoritarian takes over and everything gets worse despite the naive ideals of the political entrepreneurs who tried to cause change. We also perceive a deep ignorance of basic economic facts to be commonplace in other camps; people who push for proven bad ideas like rent control, and this is discrediting.
potato3732842
a day ago
Iterating on less bad still goes bad with time. The fact that you've boiled the frog slowly doesn't mean the frog is any less boiled than if some extremist shows up and sticks their dick in various sectors of the economy in a short time period.
If anything the slow boil is worse because it more thoroughly cements the dysfunction as people eek out various niches within it.
The "neoliberal" approach that you are advocating for has been done for the past 50-100yr depending on were you want to measure the start and the results are all around us. Just because things can get worse doesn't mean the current approach and it's peddlers aren't all some combination of wrong and/or evil.
Fractional central planning, which is basically what the current approach aims for with it's carrot and stick policy solution to literally everything, is still central planning. It just gets co-opted and fails slower so instead of the 2nd or 3rd iteration of decision makers sending it all to hell it's the 12th or 13th or whatever. Whatever the level of sustainable central planning is is clearly less than we have now.
thrance
a day ago
You're a victim of capitalist realism (we all are tbh).
https://en.wikipedia.org/wiki/Capitalist_Realism
Neoliberalism is unable to address the growing inequalities of our societies (in fact, it is often to blame for them). This, in turn, is driving us toward right-wing authoritarianism as populists are taking advantage of the growing frustration of the middle class.
Fascism is the logical end point of neoliberalism. It is the time when things are so bad you need to find scapegoats to prevent the rise of class consciousness and continue financial liberalization.
My view is that neoliberalism is not the "least bad" ideology, it is a slow and sinister destruction of our society for the benefit of the capital owners, hiding behind a mask of humanism that slips off the minute it becomes inconvenient to keep wear it.
newswasboring
2 days ago
> Human nature (greed) is never the problem, because it cannot be changed.
Citation needed.
fsckboy
2 days ago
>I would argue that greed is the problem, not profit.
I would point out that's precisely what the "private equity firm"--is that true or just a buzzword? no private equity group is taking this library private--is saying about the current library, that the greed of the unionized employees is running the library for their own benefit and at great cost to library and at the expense of the public, and it could be run more efficiently. So, you agree with them at least that much.
>Somewhere along the line people forgot the lessons of the 20th century. They forgot that profit goes beyond a line on the current financial statement.
huh? that wasn't "the lesson of the 20th century". if anything, the 20th century represents democracy and market capitalism's greatest joint achievement, with much less disease and starvation and much more freedom at the end vs the beginning.
you live in one of the greatest times to be alive, and all you can do is complain. when and where from the past would you rather live out your life expectancy of half what it is now, coupled with no HN to bitch on?
BrenBarn
2 days ago
Totally agree. I think another angle to look at it is not "a couple sectors" but "a certain scale", as suggested by your remark about how companies consolidate. When businesses are small and need every customer, they are motivated to do a good job at what they do, build goodwill, protect their reputation. The larger they become, the more they tend to work against their customers rather than for them. They cross multiple markets, making them less responsive to the demands of any one. They become "too big to fail". And so on.
What we see in the modern era is a system in which success is defined as becoming large enough that your customers have no other option but to deal with you. That's not a healthy system.
leoedin
2 days ago
You see that scale problem everywhere. Once a business has become large, it no longer cares about “small” costs like unused buildings. That’s basically the reason so many buildings in towns and cities can be left unused for decades.
The impact it has on that town is often huge. But for the business, it’s just a small overhead. A small landlord couldn’t afford to leave their asset unproductive. A multinational conglomerate can.
The death of local high streets is in part due to the unwillingness of landlords to actually rent their properties out for market rate.
dmurray
2 days ago
I don't understand how massive corporations are both ruthless slash and burn cost-cutting profit optimizers and sloppy businessmen who don't care about the small things, even in aggregate.
What's the economics of not renting out high street retail properties? There must be millions of them across the first world, with a theoretical annual rent roll in the 11 or 12 figures. Are they owned by a million multinational conglomerates foregoing a hundred grand each? In that case we are stretching the definition of "multinational conglomerate". Or are they concentrated in the hands of the same hundred companies? In that case they are each missing out on ten billion a year in opportunity. There isn't a company in the world where you couldn't make your name as Head of Global Unused Property managing ten billion a year of revenue.
I don't have an answer for this either, but it must be more complicated than "they're all owned by multinationals who don't care about such small numbers" - the point of multinational companies is that those numbers are no longer small at scale.
BrenBarn
2 days ago
Well, one relevant angle may just be that the companies are big enough to have an incentive calculus that's not aligned with the effects on local areas where such unused businesses are. They can maybe take some kind of tax writeoff, hold it as a hedge in case land values rise, etc. But the basic idea is they are using the property in a manner that crosscuts multiple markets, whereas for average citizens in the town with the vacant building, it's just a vacant building. It's not good for the scale of business operations to diverge so much from the scale of ordinary humans.
Anonbrit
2 days ago
Many commercial properties are on relatively short-term mortgages and are remortgaged regularly. If they rent it out cheaply, then the paper 'value' of the building has dropped, which can make it difficult or impossible to remortgage. It's why you see so many high rent but 'free for the first year' deals - it technically isn't reducing the rent on paper, but many of the tenants vanish 13 months after moving in
BrenBarn
a day ago
I hear people say this but I don't understand why mortgage lenders would be fooled by this. How is renting something out for the low price of $X "less" than not renting it out at all? Wouldn't a property that isn't rented and produces no income be considered the least valuable of all?
lesuorac
a day ago
> Just look at health insurance companies for a prime example: they make profit by denying claims.
Ok but why do people pick those insurance companies?
We see this across the board too and not just insurance companies. Governments low to pick the lowest bidder who then has massive cost overruns which has to put them above the second lowest bid in the end. Why is counter party risk never accounted for?
antisthenes
a day ago
> Ok but why do people pick those insurance companies?
Because they are bundled with their job and most people don't have a choice?
lesuorac
10 hours ago
Does HR get their own health insurance?
pseudalopex
2 hours ago
Do CEOs and CFOs report to HR? Are HR heads not rewarded for cutting costs? How would people in other departments react if HR alone got better health insurance?
lesuorac
an hour ago
My point is that if HR picks a company that'll deny their coverage then they also have to live with their decision as well as the rest of the employees who had no choice.
arjvik
2 days ago
Is there a way to reward and incentivize improving human well being?
Perhaps a society where all income comes from the government in proportion to how much one improves the overall well being of society?
(Yes, it's difficult to measure this objectively, and even harder to agree on what the priorities for societal well being are)
PleasureBot
a day ago
Germany has a different structure for company ownership than the USA. Members representing relevant stakeholders (employees, the community, environment, etc.) must be present on the board and advocate for their interests.
01HNNWZ0MV43FF
2 days ago
UBI would go a long ways to enforcing democracy. Money talks, so just give people money. Everything else is too abstract. We can't seem to encode justice into law but at least if everyone got UBI it would be harder to oppress poor people
(half serious)
kortilla
2 days ago
It’s not difficult, it’s impossible under freedom of religion and just independent thought generally.
One person’s “well being” might be measured by how many wives and children you have. Another’s might be education level and physical fitness. Another’s could be financial independence.
These all clash with each other in fundamentally incompatible ways.
user
2 days ago
chii
2 days ago
> And with fewer competitors, it’s easier and easier for entrenched
so the problem isn't with profit after all, it's with low competition? So what is causing the lack of competition in the sector? Why can't that problem be fixed?
zx8080
2 days ago
> A focus on profit is so frequently completely opposed to human wellbeing and a flourishing society.
Not surprising considering the profit is taken from people in the society.
burnt-resistor
2 days ago
Public-private "partnerships" backed by private equity will always raise prices, cut costs arbitrarily, reduce service, take out loans, and saddle the organization with debt to pay themselves huge dividends before driving it into bankruptcy. This is what happens when corrupt, unregulated capitalism is allowed to run amok and have zero skin in the game except to extract maximum profit like vampires.
kortilla
2 days ago
Health insurance isn’t a great example. Profits are capped relative to premium costs so denying claims isnt a good strategy.
The only way denying claims can become a profit booster is to deny enough that premiums can be lowered enough to bring over more new members than was lost in revenue through the premium discount.
So denied claims come from people shopping for the cheapest insurance coverage possible.
xucian
2 days ago
how do we fight this?
sschueller
2 days ago
There is even worse, genocide profiteers. [1]
[1] https://www.un.org/unispal/document/a-hrc-59-23-from-economy...
typewithrhythm
2 days ago
Conceptually neoliberal societys do not have a strong way to seperate community and social goals from economic ones, because their very philosophy is that prosperity creates social improvement.
Meanwhile everyone is living in low trust economic zones with no community observable, other than anonymous services.
sershe
a day ago
this narrative is basically a lie
1) Americans spend less than OECD average out of pocket as a percentage of healthcare costs. This is much larger in absolute terms but the multiplier - cost of healthcare is nearly entirely due to provider costs.
2) Health outcomes are really different between states despite having basically the same system. demographically controlled iirc outcomes are not different and sometimes better (e.g. japanese americans).
3) Insurance company profits are pretty low relative to cost of healthcare. while the bureaucracy is more expensive its not "catastrophically" by any means and iirc there are oecd countries with similar overhead although im too lazy to search on myvphone.
4) Rationing healthcare has to and does happen in all advanced economies. again modulo cost in the us, id rather it happen via money than government or inforrmal scarcity (like in Canada).
4a) Frankly while i dont have evidence for this 4a, lookinng at us spending by age (and eg the enormous money usg spends on kidney dialysis for people thay mostly just die in a few years anyway), I wonder if an important reason US providers are so expensive is, we ration limited supply properly for most people but then don't ration keeping a bedridden grandma alive for 6 more months at extreme cost, cause hey, the govt pays.
ninja3925
2 days ago
> Just look at health insurance companies for a prime example: they make profit by denying claims
Despite being from Europe, I find this to be a shocking and erroneous interpretation.
Clearly, health insurances have the duty to allocate limited resources (“premiums”) across members. Denying and accepting claims is the mechanism to that end. Accepting all claims would increase premiums and reduce membership (by pricing people out). Would that an ideal state? Clearly not.
n4r9
2 days ago
The point was not that all claims should be accepted. It's that adding a profit incentive to denials leads to worse outcomes.
Aurornis
2 days ago
Healthcare debates in the United States are difficult because so many assume that insurers have very high profit margins and that arbitrarily denying claims is the reason they have high profit margins.
If you look at the actual profit margins it’s low single digit percentages. You could eliminate profits altogether and virtually nothing would change. We even have non-profit insurers to look at
It’s strange how the high prices of drugs and services aren’t drawing the ire of people who complain about costs. Drug prices are nearly 3X higher here than international averages and doctors here also earn a lot more with in many cases fewer restrictions on prescribing or offering services than in most EU countries.
The meme that insurance company denials are generating huge profits comes mostly from the public murder of a health insurance CEO last year. For some reason people assumed that insurance companies and their profits must therefore be the core problem with high costs, without making the effort to see where the money actually goes in our health care system.
As you said, there is no health care system which does not have approval processes, deny requests deemed unnecessary, require step therapy, and establish standards of care.
o11c
2 days ago
> If you look at the actual profit margins it’s low single digit percentages.
Didn't I see somewhere that that's an artifact of Hollywood-style accounting? If you spin up a sub-business then have that sub-business charge high fees for services you can't live without, the main business might even be losing money!
What's indisputable is:
* in America, we pay more for less healthcare
* most of the money does not go to the doctors and nurses actually providing services
* it also does not go to research, which is funded elsewhere (assuming it keeps being funded at all)
* it's often possible to pay less for a service if you pay the provider directly rather get your insurance involved
nickff
2 days ago
I’m not sure where you’re getting your info, but it seems like well over half of US healthcare spending is on wages for doctors, nurses, and other patient-facing staff (such as RMTs, techs, and physios). Administrative and drug costs are definitely above the OECD average, but not the sole drivers.
Here is one source, but there are many more: https://news.harvard.edu/gazette/story/2018/03/u-s-pays-more...
klodolph
2 days ago
> If you look at the actual profit margins it’s low single digit percentages. You could eliminate profits altogether and virtually nothing would change. We even have non-profit insurers to look at
Look at administrative overhead instead of profit. People understand that there are problems with the system, and maybe they’re misattributing the problems, sure.
potato3732842
2 days ago
The "profit" isn't money in the bank. It's overpaid bullshit jobs and work and perks that benefit the people in and around the organization.
It makes me understand better how the horrors of the history books came to be when the same exact demographics who'll complain about nominally nonprofit hospitals or educational institutions paying their people insane sums and doing random BS to burn money or comparable behavior from charity entities set up as tax shields by the wealthy refuse to see that having a profit cap creates an incentive for the insurance industry to behave the same way.
klodolph
21 hours ago
That second paragraph is a wild ride. I don’t think you’ve gotten a good understanding of history if this is how you’re connecting things.
nielsbot
2 days ago
they’re the obvious scapegoat so they get blamed. i’m ok with that.
the US needs a healthcare system that doesn’t have a profit motive. (Or limit it to a second, premium market)
kovezd
2 days ago
While the critique is valid, that does not offer a path to the solution.
Utilitarism is the ruling moral philosophy, and the only possible countermeasure is externalities but that depends on an effective government which is even more unlikely that asking for ethical behavior to corporations.
alpinisme
2 days ago
That may be widely believed but there are plenty of government institutions that actually function well. Libraries are a good example.
What’s more: the belief in govt “inefficiency” is one of the hardest to overcome factors that makes it hard to build good institutions, leading to a vicious cycle.
conception
2 days ago
Exactly, people who think the government is inefficient has never worked at any company of scale ever. All large organizations are inefficient.
A major problem of the US is just corruption. If people went to jail for things like congressional insider trading, we’d solve a lot of these issues.
jibe
2 days ago
All large organizations are inefficient.
I agree, and that’s the case for dismantling as much of the federal government as possible - it is too big to work. Break up Apple, Google, Amazon, Washington DC.
conception
a day ago
You’re forgetting the corollary - all small organizations are also inefficient, just at different things.
It’s all trade offs - do you want everyone in your country to have a baseline education that can be relied on as a given but perhaps it suffers in its administration and effectiveness? Or are you OK with pockets of your country having tremendous quality of education and others having very poor quality, as an example.
pergadad
2 days ago
Public utilities and services are the default and work well in the majority of developed countries. This is true for everything from local transport to water distribution. As the joke says "universal healthcare is so difficult to get right that only all developed countries except the US have managed to put it in place".
markdown
2 days ago
Not to mention all the developing countries that have universal healthcare.
Aurornis
2 days ago
> Just look at health insurance companies for a prime example: they make profit by denying claims.
This has been repeated so many times that I think people don’t understand just how small the profit margins are for health insurers. Low to middle single digit percentages. As low as 2-3% in recent years, and much lower than the average S&P 500 corporation.
There are also non-profit insurance companies out there. Their rates are not appreciably different, as you’d expect after seeing how low the profit margins are in for-profit insurers.
I also think people don’t realize that countries with nationalized health care also deny procedures, have pre-approval processes, require step therapy, and will not authorize procedures they don’t believe to be medically necessary or to have enough evidence. There is no health care system in the world which will simply approve and pay for every request.
So while health insurer profit margins are convenient bogeyman, if you deleted their profits entirely from the system it wouldn’t move the needle on costs. It also wouldn’t open the floodgates for approving everything, because no health care system will allow unlimited services. The amount of excess and unnecessary care would be astronomically expensive. I do agree that we need a more robust system in place for ensuring that incorrect denials don’t happen, but health insurance profit margins are barely a blip on the overall cost of health care in the United States.
It’s a combination of high prices for services, American’s unusually high utilization of health care services, and very high rates of drug prescribing that mostly contribute to the cost. I think most Americans would be surprised to discover that a lot of nations with nationalized health care would also be restrictive in their access to many services and prescription drugs. For as much as we talk about insurance companies denying claims, Americans still get far more services and prescriptions than most of their counterparts in other countries.
scottjg
2 days ago
i have no doubt that other countries have some problems in their healthcare systems too, but i think you are downplaying a few key points:
1) united healthcare made 90 billion dollars gross profit in the last 12mo, and that's only one health insurance company. claiming that it's not a great business at a 2-3% profit margin ignores the scale of money involved, and ignores that the customer for health insurance is truly captive.
2) you're right that america has very high prices in healthcare. doesn't it seem bad that private insurance companies are incentivized to make things cost as much as possible so they can skim that 2-3% off the top? insurance companies negotiate and set prices for services and pharmaceuticals. they now own the pharmacy benefit management companies that would normally be incentivized to negotiate for lower prices.
i would expect in a public health care system that rejects procedures, they would follow consistent guidelines and rules. american health insurance companies will arbitrarily reject a percentage of procedures that they know they should be accepting in order to keep their profit margin in the right range.
i think it's hard for me to see the argument that health insurance companies are a net-positive or even net-neutral party in the united states. i don't think it's a coincidence that we have some of the highest prices and some of the worst outcomes.
kgwgk
2 days ago
> private insurance companies are incentivized to make things cost as much as possible
> will arbitrarily reject a percentage of procedures that they know they should be accepting in order to keep their profit margin in the right range
So which one is it? Do they want to spend more or less?
> i don't think it's a coincidence that we have some of the highest prices and some of the worst outcomes.
It’s not a coincidence either that doctor compensation is one of the highest in the world.
omnimus
2 days ago
The insurer margins can be whatever small but when the same company also owns the hospital and drug distribution it doesnt matter.
Somebody in the process makes extreme margins.
Also americans cant be at same time avoiding going to hospital because of costs and “still get far more services than most of their counterparts in other countries”
Believe it or not there are countries where there is mandatory health insurance (your employer or you or state have to pay it) and doctors dont look at costs because they dont really know them. They for sure try to not be wasteful but nobody is second guessing obviously best treatment because it costs 40% more.
kraffwork
2 days ago
You are just making things up to fit what you already believe. We have a few huge publicly traded companies in this space that file with the SEC but reality is not what you are interested in.
omnimus
a day ago
What i am making up? That US healthcare has high margins?
“ study from Yale School of Medicine (YSM) found that large U.S. health care corporations spent 95% of their net income — totaling $2.6 trillion — on shareholder payouts over the past two decades, raising questions about industry priorities and their impact on patient care and affordability”
kgwgk
2 days ago
> doctors dont look at costs because they dont really know them
They know enough to prescribe only the pre-approved drugs and they know that things will happen at due time when the already budgeted people and equipment are available.
omnimus
a day ago
Sure they prescribe pre-approved drugs. They even prefer some brands which they know or are “sponsored by”. But afaik they dont care if they prescribe something expensive because it doesnt cost them anything.
kgwgk
17 hours ago
https://www.england.nhs.uk/medicines-2/items-which-should-no...
Items which should not be routinely prescribed in primary care
This policy guidance includes medicines:
[…]
that are clinically effective but not the most cost-effective intervention available
that are clinically effective but deemed a low priority for NHS funding.
Prescribers are advised that no new patients should be started on these items, that they should be deprescribed for current patients and that, where possible, suitable alternatives should be identified for patients.
bestouff
2 days ago
Whatever. Simply come to a decent EU country and see how much it costs you for a bad cold or a cancer. Then compare that to the same event in the US.
itake
2 days ago
I've heard a horror stories about NHS and Canada's Medicare. Their systems are backed up, so treatment goes untreated for long periods of time.
Presumably healthcare professionals are performing as many surgeries as they can per day. Just because one person was denied, doesn't mean another person isn't approved.
For example, I'd rather get cancer in the USA than UK: https://www.politico.eu/article/cancer-europe-america-compar...
sapphicsnail
2 days ago
We're about to do to Medicare what the UK has been doing to the NHS. Government programs don't work when you cut all their funding. There are plenty of normal countries with functional healthcare systems.
itake
a day ago
when funding is cut, do surgeons perform less surgeries or the supply of healthcare remain the same, but there is lower demand due to limited access?
pseudalopex
an hour ago
Health care is not a single good. Facilities close. In the short term some doctors shift to providing elective services to people who can afford them. In the long term the numbers of doctors and nurses per capita decrease. Frustrating people until they give up does does not lower demand in any important sense.
grues-dinner
2 days ago
Leaving aside that the article is about the EU and largely says less about where is better to have cancer and more about where you're statistically more likely to be an old smoker and get cancer, it says it's better to have cancer in the US when you're over 65 and therefore get the socialised healthcare.
Get cancer aged 25 and you may be in some trouble.
As long as you can get past your GP and actually get the diagnosis the system works pretty well. Get onto the Two Week Wait, and you automatically will if your diagnostic test is positive or falls into the needs further investigation category, and that's highly competitive with, say American time to intervention: https://pmc.ncbi.nlm.nih.gov/articles/PMC6396925
The typical UK "horror story" fuck-up is your GP fobs you off over and over until you turn up in (overwhelmed due to people who can't get GP or social care) A&E with advanced and now-incurable cancer, they scan you, say "why the fuck haven't you been referred months ago that's atrocious", and then you die. GPs are all private in the UK and get charged more when they refer to hospitals. Either it's a traditional small partnership where the GPs themselves are invested or it's a kind of consultancy where a company employs GPs on contract and puts pressure on them to improve returns/cut costs. Either way, that's where the profit incentive comes in and coincidentally, this area is what kills people.
The GPs aren't themselves at fault mostly, they also need more funding and staff, but both have been cut drastically. I am, however, deeply suspicious that companies cut from the same cloth as Serco, Capita and G4S will not have patient outcomes anywhere in mind except under "cost centre".
nielsbot
2 days ago
Did you read the article?
A big reason the US does better is Medicare (socialized medicine) not because we suffer for-profit insurance.
itake
2 days ago
I'm interested in your point, but do you have any articles backing up your statements?
kstenerud
2 days ago
Oh bloody hell.
It astounds me how so many people can have such strong opinions about systems they have so little experience with.
I've lived long term in 4 countries (Canada, USA, Japan, Germany) and have dealt extensively with the medical systems in all of them (plus some experiences in Portugal and France).
Every system has its warts, and this is the first thing that naysayers will latch onto, of course. People love to use tu-quoque as a defense mechanism. "See? They're just as bad as we are because you have to wait sometimes, and look at this extreme case right here! It's probably even WORSE than us!"
The fact is, none of the systems are really that bad (with the EXCEPTION of the American system). There's a reason why travel insurance companies have two tiers: All of the world EXCEPT America, and all of the world INCLUDING America.
Have I had to wait for a procedure in Canada? Sure, but they do a pretty decent job of triaging, so yeah outside of the HORROR STORIES (of which you can find anywhere if you dig enough), it's pretty damn good. In Japan I paid a percentage of costs (which are pretty damn reasonable). In France I actually didn't have insurance, so I had to pay FULL price when I came down with pneumonia: 50 euros for the doctor and the antibiotics. In Portugal, I caught COVID, and got treatment within 2 hours of arriving at the hospital in Lisbon.
If you haven't actually been in the medical system of another country, you don't know what you're talking about.
kortilla
2 days ago
> If you haven't actually been in the medical system of another country, you don't know what you're talking about.
Being in the medical system doesn’t give you a leg to stand on either.
I grew up with insurance and have insurance now in the US. I’ve never had problems getting medical care and the worst year was ~$1000 out of pocket.
The conclusion from that isn’t that it’s a good system for everyone and nobody who complains knows what they are talking about. It’s that anecdotes of good or bad treatment are meaningless.
potato3732842
2 days ago
>Being in the medical system doesn’t give you a leg to stand on either.
If anything it gives one an incentive to see the problem in a way that doesn't threaten their paycheck.
Every nurse will say they're over worked. Every paper pusher will say their job is essential. The guy selling overpriced gloves to the hospital, the landscaper making the grounds look like a country club, they all have justifications as do the people paying them. And they're all on the take to some degree. The whole system is one of top to bottom plausibly deniable unneeded expenditure. Nobody not at the very top is getting rich off it just because so many are in on it. But the fact that they're not getting rich doesn't mean it's not a waste of everyone's money.
charles_f
2 days ago
> I also think people don’t realize that countries with nationalized health care also deny procedures, have pre-approval processes, require step therapy, and will not authorize procedures they don’t believe to be medically necessary or to have enough evidence
Lines in private medical care are shorter because people with no insurance don't get in line.
nielsbot
2 days ago
You can assert that but the US spends more while having worse outcomes.
seethedeaduu
2 days ago
As long as you have money or good insurance US is WAY way better than pretty much every other country in that regards.
worthless-trash
2 days ago
Having seen the results of both, I think i'll take the Australian current system.