A quick look at United Health's P/L shows a 6% profit margin. This does not quite support the popular rhetoric of a corporation in search of relentless margin (unless the argument is they are bad at it despite all efforts).
What do you do so wrong? What is your mechanism of getting rid of those who provide you the healthcare at low efficiency and hight cost? In Europe we have elections and when those don't yield the desired results we storm the HQ and replace by force.
You can't be expecting that when too many people die the insurance company will lose customers and the shareholders will replace the top management, right?
It's better to waste $4.75 by maximizing the inefficiency and costs of the entire system thorough extremely overpriced drugs due to various nonsensical middlemen based market structures, administrative bloat etc. and make 0.25$ than to reduce premiums. Of course it still costs $5 to the society. It might actually be better if they had higher margins...
In any case there should not be a profit motive in (health) insurance.
Total revenue is about $320B. Thompson's compensation was $1M cash + about $10m stock (the stock part doesn't impact the company's profit margin).
In any case, executive salaries are basically a rounding error in the books.
It certainly does if you use GAAP. A lot of tech companies cheat by providing GAAP and non-GAPP figures (of course there are some other cases where it makes sense) to hide stock based comp.
Regardless, people who are debilitated by injury or illness aren't going to look at 6% and say, "well, jeeze, I guess these guys really are hard done by."
They're going to wonder why something that costs them tens of thousands of dollars a year (health insurance premiums) isn't paying for a medically-necessary procedure, profits be damned.
> profits be damned.
But, profits cannot be damned, at least not if you plan on being a going concern. At some point, the companies need to make a profit otherwise they go out of business and cannot provide any healthcare at all.
My point is not that UNH is a sterling example of healthcare service but to point out that the narrative justifying the public outrage is not really logically coherent or supported by evidence. If there is no public healthcare service, you will need to have private insurers. If you have private insurers, they will need to make profit. The best you can do in this situation is make sure there is competition so the profits are not out of line (which seems to be the case) and there is minimal waste in the system (jury is out on that one).
Also, public healthcare is not the panacea that it seems to be promoted as. Healthcare is expensive and at some point, limits will be placed to avoid bankrupting the system. Take a look at any number of the systems of any number of European countries and see the wait times, approvals, etc.
BTW, I support the idea of a government provided healthcare system, but I just don't think it will solve all the problems the way people seem to think it will.
If a government-run health system is such a contentious issue... turns out privatized healthcare can work just fine if there is sufficient regulation.
It left out a few key bits though - like requiring those who sign up for healthcare backpay premiums for the entire period they were uninsured to whoever they sign up with.
Then the basic plan is around 300-400 CHF (regulated by the government) and the deductibles are capped at CHF 2,500. This seems to be covering the overwhelming majority of costs (if we exclude government + cash) since the volume the market for premium/supplementary coverage seems to be pretty small (<20%):
https://www.deloitte.com/ch/en/Industries/financial-services...
How could that be? Unless that's sarcasm..
I mean the US government alone (so excluding all private spending and insurance companies) spends more on healthcare per capita than many European countries which have universal healthcare.
Switzerland has a pretty much entirely privatized healthcare system (in theory too a much higher degree than the US) which is (relatively) well regulated. Also considerably higher median salaries and GDP per capita (albeit disposable PPP income is quite a bit lower) yet they spend 35% less on healthcare than the US.
The pharmaceuticals pricing is due to the factor that pharma companies believe they can charge higher prices in the US than anywhere else so the US consumer effectively subsidizes the rest of the world. I'm not sure how to solve this problem in a way that lowers prices AND maintains availability of the drugs. The obvious solution is to demand that pharma companies lower prices in the US, but (assuming they are unable to increase prices in Europe) this will just lead to some (many?) drugs not being profitable and reducing availability of drugs for all.
As for the fancier stuff, we do want to have fancier stuff. That means you get better healthcare outcomes for some pretty sick people. We should not want to cut that out. We're in trolley experiment territory when you start discussing whether it is better to have a life-saving, but expensive, procedure available but not everyone can get it because of cost or to not have the procedure available at all for anyone.
Other countries reduce cost by having the state negotiate instead of many small insurance companies all negotiate separately. This is why other countries get a better deal because they offer a larger base of future sales.
But yeah, drug pricing might be a significant part. I'm not sure about the reduced incentives for pharmaceutical companies, though? From what I understand the system is very inefficient, there are a lot of middlemen (i.e. waste) involved and price discrimination going on so a lot of that money might not necessarily be going to the drug companies doing the research.
My $25k single milliliter of fluid (https://imgur.com/a/HzqgLa2) costs the NHS about $4k in the UK.
More than a handful of the BCBS health insurance companies run as non-profits. Other countries find a way to make it work without shoveling money into the gaping maw of retirement and pension funds. Hell, even profits are fine. No one expects the people at these companies to work for free. They just expect to receive coverage when they have it deemed medically necessary by a doctor. If that means that c-suiters make a max of $500k a year and that the institutional investors have to kick rocks, that's what that means.
> My point is not that UNH is a sterling example of healthcare service but to point out that the narrative justifying the public outrage is not really logically coherent or supported by evidence.
We have type one diabetics rationing their insulin to the point that they die, while the people who run the companies that are supposed to help cover the price of said insulin make millions of dollars in compensation per year. The American male has a median lifetime earnings of $1.8 million. This isn't logically incoherent or not supported by evidence; if you have a pulse and have looked at American news over the last 15 years, you'll have seen stories about people being screwed by their insurers, sometimes to the point of literal death.
> If you have private insurers, they will need to make profit.
See above.
> Also, public healthcare is not the panacea that it seems to be promoted as. Healthcare is expensive and at some point, limits will be placed to avoid bankrupting the system.
No one's suggesting it's perfect, just that it's better than having profligate executives and major shareholders insult your intelligence by telling you they just don't have the money to cover your claim for prescriptions and necessary procedures after you paid the cost of a decent used car in premiums over the last year. Even wait times seen in socialized systems could be tolerable to those who otherwise would not get to see a doctor.