Because in all these industries pricing is relatively clear, customers have some level of understanding of the product and they can choose between competitors. In US health care you have zero pricing information, the employer chooses insurance based on their needs, not the patient’s, and people are not in a position to judge the quality of procedures so they do what the doctor tells them. It’s not a functioning market and probably can’t be.
Employer-provided healthcare is a result of tax policy, so it is tough to blame that on insurance companies.
The average person understands much more about healthcare products than they do about transportation products. Your car is made up of >20k components, and extremely intricately designed. Understanding the factors that go into a reliable car requires a fairly advanced understanding of thermodynamics, metallurgy, fracture mechanics, electronics, software engineering, statistics, and manufacturing. Most healthcare is comparatively primitive.
If you're worried about the quality of procedures (as I am), it's a doctor/hospital issue, not an insurance issue. Doctors have very effectively avoided oversight, and they often cause huge problems for their patients. The leading cause of death in hospitals in medical error.
“Employer-provided healthcare is a result of tax policy, so it is tough to blame that on insurance companies.“
Agreed. However, they make a very good living off this and will fight to keep things that way.
When you buy a car, you know all competitors, their prices, there is ton of information about maintenance, durability and all other factors that may cost you money. In healthcare you get none of this.
I am not trying to single out one factor in health care. Insurers, providers, pharmaceuticals and the various middlemen are all guilty of making an excellent living off this insanely stupid system on the back of patients who suffer from it health wise and financially. Where it gets evil is the fact they lobby for keeping things that way by spreading a lot of misinformation.
The ones making the real money in healthcare are the doctors and nurses, who have been very successful in restricting competition. Doctors and nurses in the USA (and to a lesser extent Canada) make far more money than they do almost anywhere else in the world (in either absolute or relative terms). Doctors have also been successful in preventing/avoiding tracking their results; some are much worse than others, but it is very tough to find out how good/bad they are.
Hospitals and clinics in some states have been very successful in reducing competition, to the extent that you often need permission from your competitors to open a new one. Hospitals have also avoided much scrutiny by avoiding cost-accounting, which is a very interesting tactic.
Pharmaceuticals and insurance companies are the bogey-men of the industry, but they're not as profitable as most imagine, and their high overheads are largely due to regulatory burden.
You are making the mistake of singling out one participant. In the US health system all players are making “the real money”. The only exception is the patient.
