One can view private insurer’s profits as an incentive to invest in the insurance business. Insurers, however, bring little innovation to the health care, and I emphasize care, field. They are however exceptionally good at finding ways to control and limit what is provided customers and improve the insurer’s bottom line. As such they eliminate higher risk patients by refusing to insure and/or raising rates–a feature of the McCain health plan as well.
As noted in the last post UnitedHealth’s profits for the 1st quarter (net income) approximated 1 billion dollars. This is in addition to covering all administrative costs, salaries, and other overhead. They reported an increase in net income of 12 cents/share from 66 cents last year to 78 cents this year–17-18% gain in earnings/share. Yet this was adjudged by the stock market as a disappointment because of future projections.
Our non-system of care uses 20-30% of premiums to cover administrative overhead and provide for profits. For other countries this number is usually half or less of this percentage. From the earnings data and historical costs of the private insurance business in the U.S. it would appear that these companies are not about delivering quality care and providing acess. It’s all about the money and the quest for profit.
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