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Bob Morrow's avatar

The laws of profit from health services have changed over the years since Kaiser started when Nixon was in office, as have the laws of profit taking by insurance companies. Currently the prime mover of healthcare profit taking is investments by public and private equity, where the real profit lies. Private equity controls primary care, emergency room physicians, radiology, physical therapy, nursing homes, and management, as well as public equity and the free flow of capital around the world controls most of the major entities [insurance, pharmaceuticals, construction] as well as purchasing of conglomerates. All of this soaks up profit from what is simply a for-profit system without rules.

Is that a surprise? Ethics have left the building, hiding behind sparkling advertisements.

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Scooby von Doo's avatar

In part, the medical economists of the 90s were complicit in rising deductibles and copays - they promoted the concept of moral hazard (their version of “skin in the game”) as a way to limit overutilization. The insurers took that ball and ran with it - and they were more vicious in the application of these utilization taxes than any naive economist could have predicted. Now, the insurers continue to turn up the volume on these levies and consumers continue not to scream.

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