How to make money with a shoddy product that kills people

For most businesses providing a good product is the way to make money. This isn’t as true for health insurance. The market “fails” in at least two ways in this industry. First, people don’t usually buy their own health insurance. It comes with their job. So the people who make the purchasing decision do not balance their own health against the cost. They balance someone else’s health. In a difficult and competitive business climate this results in the lowest bid having a huge advantage.

The second way the market “fails” is that people are not knowledgeable insurance consumers. The contracts are arcane and jargon filled. You don’t know that your surgery is “experimental” until your company tells you they won’t pay for it. It is not in their interest to standardize contracts and make comparison shopping easier.

The companies that succeed are the ones that have the best advertising, the largest number of exclusions, the highest co-pays, and are the most aggressive in denying claims.