As you know, I attribtute the major causes of our exceptionally high provider costs primarily to the following:
(1) According to Joel A. Harrison´s 2007 study, over 1,500 different companies spread over 50 states are offering a multiple of private heath insurance plans with high deductibles and premiums for less than 100% Basic health care coverage. Each firm has its own marketing program, advertising, CEO salaries, sales commissions, enrollment procedures, paperwork and policies, medical procedure coding techniques, and other non-clinical costs ... on top of state-by-state regulations disallowing the insured or to-be-insured to go outside the state for a better deal. When you add to this an ineffective, non-transparent, non-standardized Performance Metric reporting state-by-state and locally, and no common coding-definition of medical procedures /drug prescriptions, you have a multi-faceted FRACTIONALIZED system that is wasting over $250 billion annually just in Administrative costs. You have a system where an appendix operation may have a myriad of different prices in any one state and certainly a huge price variation over 50 states (not improved in any way by an effective exchange of comparative best practices).
Granted, as you say, that of the 1500 insurer firms, the top 20 probably dominate directly/indirectly over 50% of the business (haven´t seen any good data on this). This means two things are happening (a) the large insurers are closely copying each other´s premiums regionally and state-wide -- thus acting as an oligopoly. The larger firms are not using their leverage to lower provider costs-improve provider quality but focus instead on the better-insured and purge the sick-prone, and (b) the hundreds of smaller insurer firms do not have a balanced actuarial base, i.e., a sufficiently broad group of people for a proper risk pool of relatively healthy vs. more unhealthy enrollees, thereby driving up premiums/deductibles. Or, alternatively, they purge the sick-prone leaving a very favorable balance of less-sick enrollees to whom they can offer relatively more costly Basic-plus plans and premiums. As mentioned in last post, the large Non-Profit hospitals are in the Profit business in a BIG way. They are doing less and less for the relatively poor Uninsured and Underinsured and for the Community as required under their Tax Exempt status.
All this nation-wide, in effect, compounded Uncompetitive system dysfunctions have been Driving Up costs for quite some time and grossly Disincentivizing the over 2700 non-governmental hospitals and related doctor professionals from becoming more cost and quality effective. So odds are stacked against Households and Individuals ever having competitive, reasonable health insurance premium charges (in recent years escalating unsustainably annually at 5 times the rate of inflation). As you and I and others have been saying so often on this blog, only a Public-Medicare option (ideally a Decentralized Single/Payer system similar to Canada´s decentralized organizational setup) will Shake Up the corrupt, uncompetitive Private-insurer industry sufficiently to become much more cost-quality effective concerning a Basic standard health care package. This might require More Private-insurer consolidations to achieve cost economies-of-scale and especially the proper actuarial balance in risk pools of healthy vs. unhealthy for each insurer. Of course, this will also require Tight state and central government oversight controls/sanctions for price collusion and monopoly practices. As you have noted, discontinuance of state prohibitions on local residents-employers to purchase health care coverage across state lines is a necessity to stimulate competitive forces now practically systemically non-existent in our private health care programs.
