Right, but they aren’t just operating as an insurance company. They also own and operate the hospital, meaning there has to be a balance between the profitability of the hospital network weighted against the profitability of the insurance company.
In the end, it usually means that there isn’t a competition between the insurance and providers, rather two parties working together to manage cost while providing better service.
Which means it pays to provide preventative care, it pays to educate their patient population, and it pays to provide outcome based medicine.
Vertical integration of healthcare is a lot closer to something like universal care than what you usually see in america. It’s not perfect, but it’s usually better than the current norm.
It’s my understanding that vertical integration is the norm in the US, though. UnitedHealth bought something like 250 companies in 2024 alone. CVS owns Aetna, and MinuteClinic, and Caremark (a PBM), and multiple pharmacy chains, with the result being that they don’t care where in the value chain the money winds up, because it’s still in house at the end of the day. And they certainly aren’t going to fight the other parts of the conglomerate to get a better deal for patients, with the result being that there are no longer incentives (from competition) to cap costs, resulting in the US spending almost 20% of GDP on healthcare.
t’s my understanding that vertical integration is the norm in the US, though
Not really, corporations including insurance and private equity are increasingly buying up physician owned private practices, but that’s only estimated to be like 30% atm.
They generally don’t buy into actual hospital networks because they aren’t exactly the biggest money makers in the market. Most states mandate hospitals have some kind of emergency clinic, which are basically huge money sinks.
value chain the money winds up, because it’s still in house at the end of the day. And they certainly aren’t going to fight the other parts of the conglomerate to get a better deal for patients, with the result being that there are no longer incentives (from competition)
Eh, I think this is kinda a rudimentary understanding of healthcare cost. There’s not actually a lot of profit to be extracted from the vast majority of the healthcare system. It’s nearly entirely done by private healthcare insurances relying on the fact that they offload customers with high expenses to socialized networks asap.
US spending almost 20% of GDP on healthcare.
This is mainly because healthcare is a natural monopoly and we lack universal coverage. The rise in healthcare costs is mostly caused because uninsured patients drive up the cost of care for everyone when there only option is emergent care.
Right, but they aren’t just operating as an insurance company. They also own and operate the hospital, meaning there has to be a balance between the profitability of the hospital network weighted against the profitability of the insurance company.
In the end, it usually means that there isn’t a competition between the insurance and providers, rather two parties working together to manage cost while providing better service.
Which means it pays to provide preventative care, it pays to educate their patient population, and it pays to provide outcome based medicine.
Vertical integration of healthcare is a lot closer to something like universal care than what you usually see in america. It’s not perfect, but it’s usually better than the current norm.
It’s my understanding that vertical integration is the norm in the US, though. UnitedHealth bought something like 250 companies in 2024 alone. CVS owns Aetna, and MinuteClinic, and Caremark (a PBM), and multiple pharmacy chains, with the result being that they don’t care where in the value chain the money winds up, because it’s still in house at the end of the day. And they certainly aren’t going to fight the other parts of the conglomerate to get a better deal for patients, with the result being that there are no longer incentives (from competition) to cap costs, resulting in the US spending almost 20% of GDP on healthcare.
Not really, corporations including insurance and private equity are increasingly buying up physician owned private practices, but that’s only estimated to be like 30% atm.
They generally don’t buy into actual hospital networks because they aren’t exactly the biggest money makers in the market. Most states mandate hospitals have some kind of emergency clinic, which are basically huge money sinks.
Eh, I think this is kinda a rudimentary understanding of healthcare cost. There’s not actually a lot of profit to be extracted from the vast majority of the healthcare system. It’s nearly entirely done by private healthcare insurances relying on the fact that they offload customers with high expenses to socialized networks asap.
This is mainly because healthcare is a natural monopoly and we lack universal coverage. The rise in healthcare costs is mostly caused because uninsured patients drive up the cost of care for everyone when there only option is emergent care.