I am one of the lucky ones who works for Berkshire Hathaway and already gets absolutely insane medical benefits (for America, anyway). I am interested to see if this could somehow improve on what I already have, since it is far superior to what most BH companies have in place, and far better than what JP Morgan Chase and Amazon have, as far as I know.
A start up with politics /politicians involved (especially one from IL) just might work to the workers benefit. Now, who will the hire away from who to spear head this? Hopefully a business man.
FFA, if this is being tried by several companies, it will only hasten the demise of the most infamous legislation ever passed. Private market solutions will be taking over for the disaster.
More competition is good. But if this entity uses the vast capital of the three partners to undercut the market rates, equilibrium will be lost and more harm than good may result. I wonder, also about the reaction of stockholder’s of each company involved. Will they tolerate diluted returns on their investment if this new entity is a subsidiary of each of the three partners, or will it be independent, with initial capital infusions from the three?
This trio of companies has the capability of improving the market for healthcare, but nothing of substance was mentioned regarding insurance and controlling costs. So far, it sounds like pie-in-the-sky wishful thinking by a trio of egotistical businessmen who think they can solve problems that experts haven’t been able to resolve. Wait! Let me re-state that last point; the experts haven’t been willing to solve the cost problems…. because higher costs are in their best interests. But be aware that a non-profit approach will not properly address underlying costs; it only reduces the PROFIT load. The underlying costs of healthcare can only be addressed by increased, competent competition and legislative action to reduce punitive regulations that hinder competition in the market and buttress legal and bureaucratic compliance costs passed back to consumers.
Private Market will be far more efficient then any Govt Solution. Any one / everyone knows that.
I cant wait for the day OfnBama Care is gone. I’m up to $900 @ month in addition to my premiums for back bills because of that crap. Thats an additional mortgage payment for me.
Nope. Bad observation. Costs are rising because CEOs have no incentives to control costs that feed their salaries. Profits go to stockholders, without which insurance would be less plentiful and more expensive. That socialist approach is proven to fail, case after case, in socialist nations.
The article mentions doubters about the profits being harmful to the healthcare and insurance industrial complex.
Profits are necessary to attract providers of services which have associated risks of failure and success. They reward the entrepreneurs for risk taking, as is done in ANY industry. Remove profits and you remove incentives to form companies by investing capital. With no capital comes no product or service.
Let’s see Buffet, Bezos, and Dimon run their companies on a non-profit basis. Watch what their stockholders do. And it won’t take long to occur.
I think “free from profit-making incentives and constraints” needs definition. If a company only breaks even or loses money, they don’t have additional capital to grow and improve the business. I worked for two major mutuals in the P&C industry. Many people think mutuals don’t try to make a profit and that is false. At both companies we targeted profitable results so we had capital to invest in improvements to our business. Our profit targets were lower than stock companies, but we did not plan to break even. I think the phrase “limited profit-making incentives…” is more appropriate.
Scream all you want. You continue to miss the point about the underling loss costs part of premiums while industry experts work on factors affecting them. Profit is necessary to attract highly skilled experts to run insurance companies and healthcare facilities. Those experts are needed to address loss cost components and factors, and to administer the business efficiently.
You might want to do a survey of health care systems in the world. The very best systems are a blend of private and public options.
Several years ago, Sweden mandated that every town above a certain size offer a private health care option to the National Health Program. Reason?: It seems competition from the private system kept the level of service high in the public system.
Get it? Profit drives innovation and customer service. Taking profit out of the system gives you health care run by the post office (see VA). And before you yell “Medicare for All”, keep in mind that Medicare reimbursements are high compared to those from VA or Medicaid, and it is private health care system services from Hospitals and doctors that compete for those patients.
If profit wasn’t necessary for a high level of service, the government could sell groceries too.
The major challenge to me appears to be the cost of hospitalization. If my child with the flu goes to a local pediatrician or a doctor on duty for the flu or sprained ankle, the cost is around $200. The local hospital will charge $1,800 for the same. I know this from experience. I am not sure if some sort of nationalized system would take care of this challenge.
It won’t. By the way, I really liked what the President had to say about the cost of prescriptions. That is a huge expense for the average family. FDA is getting after the big Pharma now and they are approving drugs faster. We just need them to put out good generics at a lower cost. They will still make a lot of money if their approval time is cut down.
Drug costs need to be lowered via more competition, not government price controls. Product liability laws need to be revised to cap awards at reasonable amounts. Drug research costs need to be shared by pharma cos. that pool their researchers to reduce costs for vitality importanbt new drugs.
Why would someone go to a hospital for a flu or sprained ankle?
This ^ post of the differences in COSTS should prompt some thought as to WHY those differences in delivery of healthcare by provider exist.
Costs passed back by hospitals are different than clinics and doctor conglomeration groups. Those costs can be identified and analyzed to find more efficient approaches. And analyzing costs may yield ways to REDUCE them.
Another reason is (“Why would someone go to a hospital for a flu or sprained ankle?”) if you don’t have insurance you go to the Emergency room to be treated.
If you have younger employees this owned medical system, would certainly be a good way to save money; since the actual cost of healthcare is lower for this class of insureds. As you start getting into the aging health issues the costs get much higher but maybe their legacy costs will be lower than Blue Cross, Cigna or Aetna’s subscribers.
Just remember, insurance spreads the cost amongst the population so if you have these large and well heeled players leaving you have to spread the risk among fewer participants.
I am one of the lucky ones who works for Berkshire Hathaway and already gets absolutely insane medical benefits (for America, anyway). I am interested to see if this could somehow improve on what I already have, since it is far superior to what most BH companies have in place, and far better than what JP Morgan Chase and Amazon have, as far as I know.
A start up with politics /politicians involved (especially one from IL) just might work to the workers benefit. Now, who will the hire away from who to spear head this? Hopefully a business man.
FFA, if this is being tried by several companies, it will only hasten the demise of the most infamous legislation ever passed. Private market solutions will be taking over for the disaster.
Interestingly, Todd Combs, who represents BH in this venture, started his career as a pricing analyst at Progressive.
More competition is good. But if this entity uses the vast capital of the three partners to undercut the market rates, equilibrium will be lost and more harm than good may result. I wonder, also about the reaction of stockholder’s of each company involved. Will they tolerate diluted returns on their investment if this new entity is a subsidiary of each of the three partners, or will it be independent, with initial capital infusions from the three?
This trio of companies has the capability of improving the market for healthcare, but nothing of substance was mentioned regarding insurance and controlling costs. So far, it sounds like pie-in-the-sky wishful thinking by a trio of egotistical businessmen who think they can solve problems that experts haven’t been able to resolve. Wait! Let me re-state that last point; the experts haven’t been willing to solve the cost problems…. because higher costs are in their best interests. But be aware that a non-profit approach will not properly address underlying costs; it only reduces the PROFIT load. The underlying costs of healthcare can only be addressed by increased, competent competition and legislative action to reduce punitive regulations that hinder competition in the market and buttress legal and bureaucratic compliance costs passed back to consumers.
“free from profit-making incentives and constraints”
I have been screaming for this for YEARS! At least going back to 2004. Take the profit motive out of the best interest of my well-being. DUH!
Private market solutions, not Single Payer Government solutions. MAGA, MAFFPA
Private Market will be far more efficient then any Govt Solution. Any one / everyone knows that.
I cant wait for the day OfnBama Care is gone. I’m up to $900 @ month in addition to my premiums for back bills because of that crap. Thats an additional mortgage payment for me.
Excellent article below supplementing this one, which is arguing to take the profit motive from my brothers’ and sisters’ healthcare:
https://www.forbes.com/sites/peterubel/2014/02/12/is-the-profit-motive-ruining-american-healthcare/#16c62cda37b9
Nope. Bad observation. Costs are rising because CEOs have no incentives to control costs that feed their salaries. Profits go to stockholders, without which insurance would be less plentiful and more expensive. That socialist approach is proven to fail, case after case, in socialist nations.
The article mentions doubters about the profits being harmful to the healthcare and insurance industrial complex.
Profits are necessary to attract providers of services which have associated risks of failure and success. They reward the entrepreneurs for risk taking, as is done in ANY industry. Remove profits and you remove incentives to form companies by investing capital. With no capital comes no product or service.
Let’s see Buffet, Bezos, and Dimon run their companies on a non-profit basis. Watch what their stockholders do. And it won’t take long to occur.
I think “free from profit-making incentives and constraints” needs definition. If a company only breaks even or loses money, they don’t have additional capital to grow and improve the business. I worked for two major mutuals in the P&C industry. Many people think mutuals don’t try to make a profit and that is false. At both companies we targeted profitable results so we had capital to invest in improvements to our business. Our profit targets were lower than stock companies, but we did not plan to break even. I think the phrase “limited profit-making incentives…” is more appropriate.
Scream all you want. You continue to miss the point about the underling loss costs part of premiums while industry experts work on factors affecting them. Profit is necessary to attract highly skilled experts to run insurance companies and healthcare facilities. Those experts are needed to address loss cost components and factors, and to administer the business efficiently.
underlying. bear typo culpa.
You might want to do a survey of health care systems in the world. The very best systems are a blend of private and public options.
Several years ago, Sweden mandated that every town above a certain size offer a private health care option to the National Health Program. Reason?: It seems competition from the private system kept the level of service high in the public system.
Get it? Profit drives innovation and customer service. Taking profit out of the system gives you health care run by the post office (see VA). And before you yell “Medicare for All”, keep in mind that Medicare reimbursements are high compared to those from VA or Medicaid, and it is private health care system services from Hospitals and doctors that compete for those patients.
If profit wasn’t necessary for a high level of service, the government could sell groceries too.
Some are good. All private would be the best.
Actually, the government gives groceries away, ie Food Stamps.
The major challenge to me appears to be the cost of hospitalization. If my child with the flu goes to a local pediatrician or a doctor on duty for the flu or sprained ankle, the cost is around $200. The local hospital will charge $1,800 for the same. I know this from experience. I am not sure if some sort of nationalized system would take care of this challenge.
It won’t. By the way, I really liked what the President had to say about the cost of prescriptions. That is a huge expense for the average family. FDA is getting after the big Pharma now and they are approving drugs faster. We just need them to put out good generics at a lower cost. They will still make a lot of money if their approval time is cut down.
Drug costs need to be lowered via more competition, not government price controls. Product liability laws need to be revised to cap awards at reasonable amounts. Drug research costs need to be shared by pharma cos. that pool their researchers to reduce costs for vitality importanbt new drugs.
Why would someone go to a hospital for a flu or sprained ankle?
This ^ post of the differences in COSTS should prompt some thought as to WHY those differences in delivery of healthcare by provider exist.
Costs passed back by hospitals are different than clinics and doctor conglomeration groups. Those costs can be identified and analyzed to find more efficient approaches. And analyzing costs may yield ways to REDUCE them.
The Doc in a box concept works well for non-life threatening illnesses and are far less expensive than emergency rooms.
Another reason is (“Why would someone go to a hospital for a flu or sprained ankle?”) if you don’t have insurance you go to the Emergency room to be treated.
If you have younger employees this owned medical system, would certainly be a good way to save money; since the actual cost of healthcare is lower for this class of insureds. As you start getting into the aging health issues the costs get much higher but maybe their legacy costs will be lower than Blue Cross, Cigna or Aetna’s subscribers.
Just remember, insurance spreads the cost amongst the population so if you have these large and well heeled players leaving you have to spread the risk among fewer participants.