Health Insurers And Providers

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Ezra Klein describes the interaction:

[T]he insurer doesn't really care to negotiate lower prices. They tried that in the late ’90s, and everyone hated them for it. It turns out that workers don't feel the cost of their health care because they think employers pay it, and employers don't care that much about cost increases because they take it out of wages. Neither group likes premium increases, but they don't really care. But everyone screams if you tighten networks and review care. As such, providers have pretty free rein. That's part of why we pay so much more than any other country per unit of care.

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