Saum Sutaria, M.D.

I'm not an economist, but people would look at this and say, OK, there's moral hazard and concepts like that that exist with an insurance system like that. And we should spend a minute on what was insurance designed for back then and what is it now?

I'm not an economist, but people would look at this and say, OK, there's moral hazard and concepts like that that exist with an insurance system like that. And we should spend a minute on what was insurance designed for back then and what is it now?

I think that if you look at the concept of insurance, I mean, insurance is for random, infrequent and unpredictable events. And when the primary role of insurance was to prevent catastrophic loss, if you had a heart attack or you had an accident or you had an appendicitis or yes, or you had a cancer, which back in those days was less of a chronic disease, the concept of insurance made some sense.

I think that if you look at the concept of insurance, I mean, insurance is for random, infrequent and unpredictable events. And when the primary role of insurance was to prevent catastrophic loss, if you had a heart attack or you had an accident or you had an appendicitis or yes, or you had a cancer, which back in those days was less of a chronic disease, the concept of insurance made some sense.

Now, if you look at what drives expenditures from a health status standpoint, it's a lot of chronic illness. And in many cases, it's multiple chronic illness. We'll get into obesity, diabetes, heart disease, lung disease. Even the innovation in HIV care in this country, AIDS has become a chronic disease. Cancer is becoming more of a chronic disease. We try to insure somewhat uninsurable events.

Now, if you look at what drives expenditures from a health status standpoint, it's a lot of chronic illness. And in many cases, it's multiple chronic illness. We'll get into obesity, diabetes, heart disease, lung disease. Even the innovation in HIV care in this country, AIDS has become a chronic disease. Cancer is becoming more of a chronic disease. We try to insure somewhat uninsurable events.

You don't wake up every morning and think, oh, I've got car insurance. Let me go figure out how to use my car insurance to get an oil change. But when we think about we're going to go to the doctor to get a preventative checkup or refill my regular diabetes medicine, which I'm going to be on for the rest of my life, we think insurance. But it's not really an insurable event.

You don't wake up every morning and think, oh, I've got car insurance. Let me go figure out how to use my car insurance to get an oil change. But when we think about we're going to go to the doctor to get a preventative checkup or refill my regular diabetes medicine, which I'm going to be on for the rest of my life, we think insurance. But it's not really an insurable event.

Insurance today is a discount card. It's not insurance in healthcare. Insurance traditionally would be in other parts of your life where you procure insurance for random, infrequent, and unpredictable events.

Insurance today is a discount card. It's not insurance in healthcare. Insurance traditionally would be in other parts of your life where you procure insurance for random, infrequent, and unpredictable events.

No, no. They function differently from that perspective. I mean, obviously they have a tremendous amount of expertise in managing risk, but the nature of that risk they understand isn't random, infrequent, and unpredictable events.

No, no. They function differently from that perspective. I mean, obviously they have a tremendous amount of expertise in managing risk, but the nature of that risk they understand isn't random, infrequent, and unpredictable events.

That's right. The fundamental understanding that the insurance companies have to have to be successful in their risk business is understanding their risk pool. So you're going to have a thousand people in insurance. 5% may cost you 50% of your total spend. 20% may be 85% of your total spend. And then you'll have a large group of people that really on a unit basis don't spend very much.

That's right. The fundamental understanding that the insurance companies have to have to be successful in their risk business is understanding their risk pool. So you're going to have a thousand people in insurance. 5% may cost you 50% of your total spend. 20% may be 85% of your total spend. And then you'll have a large group of people that really on a unit basis don't spend very much.

And they have to understand that risk pool.

And they have to understand that risk pool.

It's very hard because the number one thing that would create the foundation beyond all of the infrastructure and systems and other things required to function in a complex ecosystem would be a large enough population of patients with a risk pool that you can understand.

It's very hard because the number one thing that would create the foundation beyond all of the infrastructure and systems and other things required to function in a complex ecosystem would be a large enough population of patients with a risk pool that you can understand.

I mean, look at all of the folks who've gotten into the newest exchange products that offered an opportunity to do that are the exchanges that have come out of the Affordable Care Act. And there have been insurance companies that have popped up and have failed, and there have been some that have struggled but still exist, and there have been some that have been gobbled up.

I mean, look at all of the folks who've gotten into the newest exchange products that offered an opportunity to do that are the exchanges that have come out of the Affordable Care Act. And there have been insurance companies that have popped up and have failed, and there have been some that have struggled but still exist, and there have been some that have been gobbled up.