US healthcare: Profits before patients

[Capt Bringdown]

What is the point of having the world's best medical facilities if citizens don't have the money to access healthcare?

Democratic politicians proudly point to the Patient Protection and Affordable Care Act, the bill that was signed by President Obama in March 2010, as real progress, but Physicians for a National Health Program (PNHP), an organisation of doctors who support healthcare for all, say the bill is nothing more than a false promise of reform.

Instead of eliminating the real problem, the new legislation will enrich and further entrench the profit-driven, private health insurance industry, and leave 23 million people still uninsured in 2019, according to PNHP.

If Republicans have their way, the 45 million seniors and people with disabilities who rely on Medicare will see their out-of-pocket costs double - or do without treatment altogether.

The US is the only major country in the industrialised world that doesn't guarantee healthcare to all of its citizens. It's unconscionable that 45,000 people in the US die every year because they can't afford care.

Here's a fact from the PNHP that never made its way through the noise machine during the so-called healthcare debate - which was shaped by the insurance industry from the beginning. It should be repeated over and over again. the bureaucracy and paperwork of the profit-making health insurance industry consume one-third of every healthcare dollar.

Streamlining payment through a single-payer system would save more than $400 billion per year - which is enough to provide comprehensive, high-quality coverage for all.

http://english.aljazeera.net/indepth/opinion/2011/05/201152382145164217.html

[boutons_deux]

"What is the point of having the world's best medical facilities if citizens don't have the money to access healthcare"

That more and more people can't afford UCA healthcare is of no concern to the sick-care racket, whose overriding concern is profit, not delivering care.

Sick-care is so expensive that even employees' group insurance plans are "tax-expenditure" supported by employees not paying taxes on the benefit, and employers deducting health plan costs as expenses.

oops, is this what journalism looks like when not corrupted by corporate money?

[Wild Cobra]

If a health care provider goes bankrupt, who does that help?

They have to make a profit.

[ElNono]

They have to make a profit.

That's obviously a false premise. You can choose to be profit-neutral and not go bankrupt.

[ElNono]

There's other categories too, like NPO, which use any profits as a re-investment on themselves and are barred from distributing said profits to owners or shareholders.

[ElNono]

You should know this, since you seem to champion charity at every opportunity...

[boutons_deux]

eg:

https://www.kaiserpermanente.org/

http://en.wikipedia.org/wiki/Kaiser_Permanente

[Wild Cobra]

That's obviously a false premise. You can choose to be profit-neutral and not go bankrupt.
That's fine, but they still have to maintain a revenue to cover costs. That sad truth is they have to watch how generous they are with services at times.

[ElNono]

That's fine, but they still have to maintain a revenue to cover costs. That sad truth is they have to watch how generous they are with services at times.

Right. Your premise that you either make a profit or go bankrupt is still fallacious.

[DarrinS]

Evil gawt damned VRWC profit-lovin bastards!

[ElNono]

There's nothing wrong with making a profit, IMO. Saying it's the only option is a lie.

[boutons_deux]

"Evil gawt damned VRWC profit-lovin bastards"

excellent description, one of the truest posts you ever made.

[DarrinS]

"Evil gawt damned VRWC profit-lovin bastards"

excellent description, one of the truest posts you ever made.

:lmao

[greyforest]

If a health care provider goes bankrupt, who does that help?

They have to make a profit.

It's almost as if not everything works toward the benefit of society in a loosely regulated free market.

:wow

[DMX7]

You can always count on Corporate America's useful idiots to make a fool of themselves for the cause.

[Wild Cobra]

Right. Your premise that you either make a profit or go bankrupt is still fallacious.
Let's just agree you cannot keep operating in the red.

[ElNono]

Let's just agree you cannot keep operating in the red.

Let's just agree that they can operate without necessarily turning in a profit.

[Wild Cobra]

Let's just agree that they can operate without necessarily turning in a profit.
I will agree I misstated that originally.

Happy?

Wasn't rewording it enough, or do I have to beg your forgiveness?

[ElNono]

I will agree I misstated that originally.

:tu

[coyotes_geek]

Given how profit margins for HC providers run in the low single digits, I have a hard time believing the problem with the US HC industry is that it's operating at a profit.

If you really want to do something about HC costs there are far bigger causes that should be addressed before we worry about the 3% profit margins insurance companies are making. Things like the American fast food + couch potato lifestyle for example.

[ElNono]

The insurance companies might be making single digit profits, but are service providers making single digit profits? Pharmaceuticals?

[boutons_deux]

Health Insurer Profits Jumped 250% in Last Decade

Profits for the 10 largest U.S. insurance companies jumped 250% between 2000 and 2009 while millions of Americans have lost coverage, according to a report released Thursday by the U.S. Department of Health and Human Services. The report found that the five biggest insurance companies -- WellPoint (WLP), Cigna (CI), UnitedHealth Group (UNH), Aetna (AET) and Humana (HUM) -- saw their profits increase 56% in 2009, a year in which 2.7 million people lost their private coverage.What's more, the report found that the companies combined earned a total of $12.2 billion last year.

http://www.dailyfinance.com/2010/02/18/health-insurer-profits-jumped-250-in-last-decade/

[boutons_deux]

UnitedHealth recently reported that it’s first quarter profits increased by 21%.

We regulate insurance companies at the low-end of their capitol levels. We do not regulate what is too much capital or surplus. A company can decide that surplus is not profit. So when a company tells you it’s making 2.2% profit, what it’s telling you is that the discretionary decision that’s been made about how to report that number — it is not a reflection of capitol received or the financial strength of that individual company, necessarily.

insurers are only as rich as their comparison. As Sen. Jack Reed (D-RI) explained during the hearing, “profit [earnings as a percent of revenue] is one measure, but return on equity is another measure. You can compare them not only to device makers, and other parts, but if you compare them to the manufacturing sector, insurance is doing pretty good I think. So it’s all the point at which you’re comparing.”

http://thinkprogress.org/health/2010/04/22/171404/profits-reserves/

=========

I'll cry as hard and as long for the health insurers as I will for the financial sector.

Right-wingers here shilling for the poor, beat-up health insurers.

[boutons_deux]

http://www.pnhp.org/news/2008/january/understanding_insure.php

[coyotes_geek]

The insurance companies might be making single digit profits, but are service providers making single digit profits? Pharmaceuticals?

Service providers are also low single digits profits.

Margins for pharmas get into the teens. Whether a 15% profit margin is "excessive" or not will vary from person to person I suppose. Allowing Americans to start buying prescription meds from other countries would certainly push those margins down somewhat. I 100% think this is something that needs to happen. Still, I don't think squeezing pharma margins down into the single digits where the rest of the healthcare sector is operating is going to have the dramatic effect on overall prices that people are looking for.

[ElNono]

Service providers are also low single digits profits.

Margins for pharmas get into the teens. Whether a 15% profit margin is "excessive" or not will vary from person to person I suppose. Allowing Americans to start buying prescription meds from other countries would certainly push those margins down somewhat. I 100% think this is something that needs to happen. Still, I don't think squeezing pharma margins down into the single digits where the rest of the healthcare sector is operating is going to have the dramatic effect on overall prices that people are looking for.

Tens? Are you sure about that?

By delaying Ranbaxy’s generic version of Lipitor, which might have been sold as early as March 2010, Pfizer has won extra time for exclusive sales of Lipitor, potentially totaling billions of additional dollars. Lipitor’s current price can exceed $3 a day, while a generic version might eventually sell for well below $1. (source (http://www.nytimes.com/2008/06/19/business/19drug.html))

That's in the vicinity of 33% if my math is right. Patent protection is a huge cash cow for these companies.

Generic care *IS* a lot cheaper than what we pay. Medical tourism is just simple evidence of that.

[coyotes_geek]

Tens? Are you sure about that?

That's what I see here.

http://biz.yahoo.com/p/5qpmd.html



By delaying Ranbaxy’s generic version of Lipitor, which might have been sold as early as March 2010, Pfizer has won extra time for exclusive sales of Lipitor, potentially totaling billions of additional dollars. Lipitor’s current price can exceed $3 a day, while a generic version might eventually sell for well below $1. (source (http://www.nytimes.com/2008/06/19/business/19drug.html))

That's in the vicinity of 33% if my math is right. Patent protection is a huge cash cow for these companies.

This is the prime example of the situation that would be solved by allowing people to buy their meds from other countries.


Generic care *IS* a lot cheaper than what we pay. Medical tourism is just simple evidence of that.

No arguement here. I'm all for generic competition.

[Wild Cobra]

Health Insurer Profits Jumped 250% in Last Decade

Profits for the 10 largest U.S. insurance companies jumped 250% between 2000 and 2009 while millions of Americans have lost coverage, according to a report released Thursday by the U.S. Department of Health and Human Services. The report found that the five biggest insurance companies -- WellPoint (WLP), Cigna (CI), UnitedHealth Group (UNH), Aetna (AET) and Humana (HUM) -- saw their profits increase 56% in 2009, a year in which 2.7 million people lost their private coverage.What's more, the report found that the companies combined earned a total of $12.2 billion last year.

http://www.dailyfinance.com/2010/02/18/health-insurer-profits-jumped-250-in-last-decade/
Who cares. Too many factors, including having to increase profit margins in preparation of the changing health care laws.

I'll bet that slice of time is from a low point in 2000. 250% profit increase could also mean that it jumped from 1% to 3% profit margins plus inflation.

Hell, medical inflation alone can probably account for 50% or more.

I don't see tangible numbers to make any usable assessment. Therefor I see this as hype. I good journalist would have pt in usable hard facts.

If you go by stock prices, they are about equal as a group to 5 years ago. The prices peaked in Jan 08 and were their lowest in Jan 09.

The devil's in the details. I have started looking at the 10 statements by these companies. 2000 was a common low point and there was a peak just 2008. Like any other industry, I could make a case that they were affected by the 2006 election where democrats took control of congress, and the bailouts in 2008 and 2009. After all, it takes time for policy to take effect.

Why doesn't the author use numbers before 2000 or after 2009? Nice cherry picked data from the graphs I see.

[ElNono]

That's what I see here.

http://biz.yahoo.com/p/5qpmd.html

Thanks. I read they've been struggling to come up with new/popular drugs recently. Their margins are going to keep on shrinking.


This is the prime example of the situation that would be solved by allowing people to buy their meds from other countries.

And that's the best selling drug ever. I fully expect them to seek some sort of extension before the November deadline.


No arguement here. I'm all for generic competition.

:tu

[RandomGuy]

Who cares. Too many factors, including having to increase profit margins in preparation of the changing health care laws.

I'll bet that slice of time is from a low point in 2000. 250% profit increase could also mean that it jumped from 1% to 3% profit margins plus inflation.

Hell, medical inflation alone can probably account for 50% or more.

I don't see tangible numbers to make any usable assessment. Therefor I see this as hype. I good journalist would have pt in usable hard facts.

If you go by stock prices, they are about equal as a group to 5 years ago. The prices peaked in Jan 08 and were their lowest in Jan 09.

The devil's in the details. I have started looking at the 10 statements by these companies. 2000 was a common low point and there was a peak just 2008. Like any other industry, I could make a case that they were affected by the 2006 election where democrats took control of congress, and the bailouts in 2008 and 2009. After all, it takes time for policy to take effect.

Why doesn't the author use numbers before 2000 or after 2009? Nice cherry picked data from the graphs I see.

Fair points all.

The report the article was based on, along with the hyperlinked sources can be found here:
http://www.healthreform.gov/reports/insuranceprospers/index.html

I will say this much:

Health insurers are spending no small amount of money and effort figuring out the uncertainties of health care reform.

Republican efforts to stop the ball rolling only adds to that.

A lot of these recent rate increases are probably, in my opinion, quite justified. The risks that these companies will be exposed to will be greater, and their overhead costs are also greater.

Insurance companies, to be able to pay for the risks they assume have to have the reserves *before* they assume them, in order to remain solvent.

That said, I think we should keep a VERY sharp eye on companies that are obviously trying to simply pad their profits for no reason.

IF the increased rates turn out not to be justified, that would be something to address, mainly because of the one really really damning factoid from that report that should worry everybody:


More than 94 percent of insurance markets in the United States are now highly concentrated.

The assumption that we have a truly "free market" when it comes to health insurance is mostly not a valid one.

Larger insurers have come to hold dominating shares of the market for health insurance.

Monopolies, one of the inevitable results of free markets, have begun to take over.

If your argument about the government running your health insurance is that large burocracies are hugely inefficient, your health insurance is run by one anyways. Not only is health insurance becoming dominated by such burocracies, these entities are required, by the definition of being "for-profit" to charge more than what it costs them to provide the service.

In the end I don't see much difference between a single-payor government run insurance system, and a state-by-state monopoly of interrelated companies.

I just wish we could be honest enough to accept that reality. I would far prefer the former over the latter, because I view that as being far better for the economy as a whole.

[Wild Cobra]

I traced Wellpoint back to 2004 so far with the income sheets. Profits were:

$millions

2004: 960.1
2005: 2,463.8
2006: 3,094.9
2007: 3,345.4
2008: 2,490.7
2009: 4,745.9
2010: 2,887.1

Notice the big jump in 2005? We have a increase of 394% on this one alone from 2004 to 2009. However, the percentage profit went from 4.69% to 7.3% and back to 4.91% in 2010. Read this:

On November 30, 2004, Anthem, Inc. acquired WellPoint Health Networks Inc. and Anthem, Inc. changed its name to WellPoint, Inc. Accordingly, fourth quarter and full year 2005 financial results include operations of the combined company for the entire periods. Fourth quarter and full year 2004 financial results, however, only include operations of the former WellPoint Health Networks Inc. for the one month ended December 31, 2004.

On December 28, 2005, WellPoint, Inc. acquired WellChoice, Inc. For accounting purposes, the transaction was assumed to have closed on December 31, 2005. Accordingly, fourth quarter and full year 2005 income statement and operating cash flow results do not include operations of the former WellChoice, Inc. However, balance sheet and membership information as of December 31, 2005, does include the former WellChoice, Inc.
This is pretty common when acquisitions happen. Can't consolidate all the paperwork. I wonder how many of these other listed companies acquired others in that 10 year period? I wonder how many others this company acquired I didn't find? I only looked for these acquisition because of the large jump.

I think I made my point, how journalists make agenda based news once again. If someone wants to show me wrong, search the reports like I did.

Numbers are easiest to find for the last 3 to 5 reported periods. Here are 2008 numbers for percentage profit:

WLP: 4.07%, 7.30%, 4.91%
AET: 4.47%, 3.67%, 5.16%
CI : 6.82%, 16.11%, 6.33%
UHN: 3.26%, 4.39%, 4.92%

That large profit for CI in 2009 doesn't look normal. Also skewed the numbers. In good data analysis, outliers are often thrown away.

[RandomGuy]

I traced Wellpoint back to 2004 so far with the income sheets. Profits were:

$millions

2004: 960.1
2005: 2,463.8
2006: 3,094.9
2007: 3,345.4
2008: 2,490.7
2009: 4,745.9
2010: 2,887.1

Notice the big jump in 2005? We have a increase of 394% on this one alone from 2004 to 2009. However, the percentage profit went from 4.69% to 7.3% and back to 4.91% in 2010. Read this:

This is pretty common when acquisitions happen. Can't consolidate all the paperwork. I wonder how many of these other listed companies acquired others in that 10 year period? I wonder how many others this company acquired I didn't find? I only looked for these acquisition because of the large jump.

I think I made my point, how journalists make agenda based news once again. If someone wants to show me wrong, search the reports like I did.

Numbers are easiest to find for the last 3 to 5 reported periods. Here are 2008 numbers for percentage profit:

WLP: 4.07%, 7.30%, 4.91%
AET: 4.47%, 3.67%, 5.16%
CI : 6.82%, 16.11%, 6.33%
UHN: 3.26%, 4.39%, 4.92%

That large profit for CI in 2009 doesn't look normal. Also skewed the numbers. In good data analysis, outliers are often thrown away.

Why don't you apply the same level of skepticism and industrious research into underlying assumptions on things you agree with?

[Wild Cobra]

Why don't you apply the same level of skepticism and industrious research into underlying assumptions on things you agree with?
That's a figment of your imagination. I do.