Insurers rely on doctors whose judgments have been criticized by courts

Original Article ↗ Hacker News Discussion ↗

U.S. health insurers are accused of systematically denying necessary care by hiring doctors whose coverage decisions are hard to challenge in court and are not treated as medical practice for malpractice purposes. Commenters highlight how laws like ERISA, limits on punitive damages, and the ACA’s medical loss ratio rules create perverse incentives: insurers can profit from both high underlying costs and aggressive claim denials, while patients bear the risk. The conversation broadens into critiques of regulatory capture, the political barriers to single‑payer or other systemic reforms, and the way opaque billing and rationing by ability to pay distort healthcare access and outcomes.

Legal and Incentive Structures

  • ERISA’s lack of punitive damages means insurers risk only paying wrongly denied claims, not large penalties. Judges quoted in the article see this as enabling a “pay 10, avoid 1,000” incentive.
  • Commenters argue this makes fraud or systematic bad-faith denial a rational business model.
  • ACA’s medical loss ratio (≈80% of premiums must go to care/QI) is debated:
    • Some say it perversely incentivizes higher medical prices so insurers’ 20% cut grows.
    • Others counter that collusion and lax antitrust enforcement, not the MLR rule itself, are the core problem.

Role and Liability of Insurer-Employed Doctors

  • Denial decisions by plan doctors are generally not treated as “practicing medicine,” so they’re shielded from malpractice suits.
  • Many find this “odd,” arguing that determining “medical necessity” is inherently medical and should carry liability.
  • Opposing view: these doctors only influence payment, not whether care can be provided (patient could pay cash, clinician could donate care), so malpractice rules don’t neatly apply.
  • Deep concern over conflicts of interest: doctors are paid by entities that profit when care is denied; some liken this to criminal negligence or even intentional harm.

Costs, Profit Motives, and Claim Denials

  • Broad agreement that denials are about cost control, not just fraud prevention.
  • Dispute over where main cost drivers lie:
    • Some blame insurers’ perverse incentives and administrative friction.
    • Others point to hospitals and pharma as higher-margin, larger cost components.
  • Several note massive provider time spent on coding, prior auth, appeals, and billing.

Systemic Barriers to Reform in the U.S.

  • Many see the system as a “Moloch”-like equilibrium: every subsystem is defended by its beneficiaries; changing the whole triggers unified resistance.
  • Lobbying, legal corporate political spending, and the sector’s share of GDP make structural reform extremely hard.
  • Ideological factors: anti-“socialism,” racism, and “rugged individualism” lead many voters to resist paying for others’ care, even while they already cross-subsidize via premiums and taxes.
  • Some argue the U.S. is effectively an oligarchy where majority support for reform does not translate into policy.

International Comparisons and Single-Payer Debates

  • Non-U.S. commenters contrast U.S. costs and outcomes with European systems (e.g., Denmark, NZ, UK), asking why the U.S. doesn’t adopt single payer.
  • Pro–single-payer arguments: lower overall costs, universal coverage, better bargaining power on drugs and procedures, less administrative overhead.
  • Skeptical points:
    • Single-payer may mean longer waits and less access to newest treatments; some cite Canada/UK wait-time issues.
    • Others reply that U.S. patients without money or strong insurance already face long waits or non-treatment.
  • Consensus that some form of rationing is unavoidable in any system; disagreement is over whether rationing should be by price, queue, medical criteria, or bureaucracy.

Capacity, Provider Supply, and Training

  • Several identify constrained capacity—especially physicians, certain specialists, and imaging—as a root cause of high costs and waits.
  • U.S. residency slots are federally capped, creating a bottleneck; there is debate on who should fund expansion (federal govt vs hospitals vs patients via higher bills).
  • Suggested remedies: train more providers, expand nurse practitioner/PA roles, and remove barriers like certificate-of-need laws. Others warn such “efficiencies” can just be used to degrade care quality further.

Administrative Complexity and Transparency

  • Commenters ask why insurers can’t provide upfront, precise cost estimates via apps.
    • Responses: coding is uncertain until after procedures; providers and payers have fragmented, opaque systems.
  • Some note existing price-transparency tools and mandates, but enforcement is weak and code differences make them hard to use.
  • There is broad frustration that U.S. healthcare prices are uniquely opaque, with “list prices” used as leverage in negotiations and to overcharge the uninsured.

Frustration and Radicalization

  • Many express deep cynicism that policy tweaks or protests will fix a system protected by money and law.
  • One commenter explicitly endorses violent retaliation against industry leaders, reflecting extreme despair; others focus instead on legal reforms (e.g., RICO, changing ERISA, malpractice exposure for insurer doctors).