Unintended Consequence of the Affordable Care Act.
September 23, 2014 at 1:54 pm
(This post was last modified: September 23, 2014 at 1:59 pm by Bibliofagus.)
(September 22, 2014 at 9:56 pm)Heywood Wrote:(September 22, 2014 at 12:22 pm)Bibliofagus Wrote: They will learn to bother when they find out their competitors who do actively prevent fraud can offer a better deal than they can and all their customers start walking away to get that better deal.
Markets are a bitch like that.
My point is that before this government intervention every dollar of fraud and waste saved by the insurance company translated into an extra dollar of profit(if we ignore the cost of looking for fraud and waste for simplicity sake). After this government intervention every dollar of fraud and waste translates at best into only 20 cents of additional profit. The profit incentive to look for fraud and waste diminishes quite a bit.
Its very true that the market force you speak of didn't go away because of this intervention, but it wasn't the only market force in play. Insurance companies may still have some incentive to look for fraud and waste, but those incentives are much weaker now then before this government intervention.
You appear to underestimate consumers and overestimate investors. Which is funny, because the customer is always more often right than wrong in an economic context.
The thing is: the company that can suplly the best benefits at lowest costs will win.
Fraud is not profitable for investors, and its not profitable for consumers. Investers might react quicker, but the consumer decides in the end.