Insurance companies should be paying people to take this considering the other costs it reduces.
Obesity mostly causes expensive problems years later. People stay in their jobs for an average of something like 3-4 years. By the time anyone has an issue, it's the next guy's problem (or ideally, Medicare's).
And capped or not, the pay-vider structure allows intra-company eliminations to bury arbitrary amounts of money as "not profit" even though it effectively is.
And even if that weren't true, the expected coverage term for a US patient is ~4 years due to it being tied to employment, so there is quite literally zero incentive to address any health issue that won't materialize as cost in the next few years (obesity being one such type of health problem).
Source? There are 7 large publicly listed health insurers with public financials, all underperforming SP500 for more than a decade. There are myriad other non profits such as Kaiser/Cambia/Premera/Providence/various BCBS/etc, all with public financials as well.
Where is all this fraud going? And it’s happening across hundreds of executive offices across the country? And getting past 50 state insurance regulators that have to approve prices for insurance?
That would be remarkable levels of corruption and collusion.
Payvider: An entity that is both a payer (insurer) and a provider (medical practice). Most payviders also have vertically integrated PBMs (pharmacy benefit managers), pharmacies, and labs, all of which participate in the same scheme.
A few of the examples you listed are NOT payviders, they're just payers, and therefore do not have these levers available to them.
Vertically integrated companies evade profit caps on their insurance division by shifting money to their unregulated provider, PBM, or labs divisions. It's pretty simple: the insurance arm overpays its own subsidiary doctors and clinics and records these internal transfers as mandatory "medical care" which is recorded as loss on the insurance side. The parent company then pockets the excess money as unrestricted profit on the provider/PBM/lab side, effectively bypassing the legal limit on how much insurance revenue they can keep and completely destroying the incentive to manage costs through their insurance division, at least when those costs originate from their own providers, which given that e.g. UHG is now the largest employer of doctors in the US, is increasingly often!
Is it fraudulent, corrupt, or collusive for a health insurer to employ doctors who deliver care? Not per se, but it gives insurers the ability to more or less arbitrarily convert premium dollars into profit while still getting people to defend them with claims like "they've been underperforming the SP500 for more than a decade."
Here are a few sources about different constituent behaviors, though you'd have to do a decent amount of reading to stitch together the full picture of how this works:
https://www.statnews.com/2024/11/25/unitedhealth-higher-paym...
https://www.healthaffairs.org/content/forefront/insurers-own...
https://www.wsj.com/us-news/unitedhealth-medicare-fraud-inve...
https://www.statnews.com/2024/07/25/united-health-group-medi...
Yes, UNH does better than the other managed care organizations because their healthcare business has higher margins than their insurance business. But it’s certainly not arbitrary, and it’s apparently not enough to make their shares worth buying.
More importantly, UNH competed against other insurers. They don’t get to “arbitrarily” pay their doctors (as if any business wants to overpay their employees). If they pay too much, then they will have to charge higher premiums. Premiums which also have to be approved by state regulators. And it’s a fact that UNH’s premiums are comparable to everyone else’s premiums. Why else would people buy from them?
>Is it fraudulent, corrupt, or collusive for a health insurer to employ doctors who deliver care? Not per se, but it gives insurers the ability to more or less arbitrarily convert premium dollars into profit while still getting people to defend them with claims like "they've been underperforming the SP500 for more than a decade."
The silly claim is stating managed care organizations are booking outsize profits, yet they don’t show up in 10-Ks or even shateholders’ pockets.
Underperformance relative to SP500 is a factual claim. 2% to 3% profit margin (objectively a tiny profit margin is a factual claim for 6 different businesses. UNH is at 5% to 7%, which is decent, but pathetic compared to tech/pharmaceutical/finance/real estate/oil companies.
Hopefully you can see why this all sounds like unfounded conspiracy theories. Just the fact that it’s better to own SP500 than a health insurer stock should be enough to conclude there are no “unrestricted” arbitrary profits being taken. They are very much restricted, and their shareholders know.
UNH outperformed the S&P by a huge margin up until their Medicare Advantage fraud case pummeled the stock price a few months ago. https://www.alphaspread.com/comparison/nyse/unh/vs/indx/gspc
> The silly claim is stating managed care organizations are booking outsize profits,
Is this claim in the room with us now?
My claim is that the pay-vider structure enables these businesses to produce way, way, way more money than their regulatory "profit cap" leads people to believe. They can remove what would be profit from their insurance arm (where profit is capped anyway, so it keeps them under the cap) and dump it into their healthcare arm (proven by above-market self-reimbursement rates) to fund network expansion, which then further strengthens the insurance arm's market position (alleviating their need to "compete against other insurers" [ lol ])
Your claim is actually concordant with mine, which is that this profit doesn't show up as margin and doesn't show up as excellent stock performance. Correct! That's what it means to hide profit in order to stay below profit cap!
Anyway it's clear that I'm talking to a "stocks guy" who lacks the curiosity to actually understand how a business works beyond the 10-K (where all this stuff is discussed, by the way, you can find it euphemistically referred to as "network optimization").
Like I said, you'd have to do some reading well beyond the 10-Ks and the price chart lmao.
This definition of “hide profit” seems to be no different than “invest in the business”.
> which then further strengthens the insurance arm's market position (alleviating their need to "compete against other insurers" [ lol ])
Why is this “lol”? It is true that vertical integration results in efficiencies, and that can lead to lower premiums (not that it will absent sufficient competition). Kaiser has been doing it to much acclaim for almost 100 years.
An electric and gas utility is a structural monopoly, you cannot run multiple power wired and gas pipes to each property.
Health insurance is easily switched. If Kaiser spends too much, then Anthem/United/Aetna/Cigna/etc can gain customers by offering a lower price.
Of course, the insured has the quality of life incentive of not having to deal with complications from consuming excess calories.
They don't.
Because despite being labeled as not-for-profit, they will always scale up their "cost" to match their revenues, and live on the 1-2% difference.
They want the absolute nominal dollar values for care to be as high as humanly possible.
Is that what you meant?
Plus the out of pocket maximums are a pittance compared to what complicated healthcare costs can be, so paying more for premiums to ensure you are not denied coverage would be a no brainer.
Alas, that is not the case, so the reality must be different from the premise.
Also, here's a non profit health insurance company denying coverage:
https://www.theguardian.com/us-news/2024/sep/29/louisiana-ho...
> That premise must be invalid because if true, no one would buy insurance from for profit insurance companies.
What premise? That companies balloon costs or aim to provide less care if they can get away with it? It's a complete non-sequitur if you think so.
>because there are also for-profit health insurance companies (that deny coverage) and not-for-profit ones (that balloon costs)
The claim that for profit health insurance companies deny coverage to save money and non profit health insurance companies balloon costs to maximize healthcare expenses is obviously wrong (as demonstrated in previous comment).
The claim that health insurance companies in general both deny coverage to reduce healthcare expenses and maximize healthcare expenses to increase profit is obviously wrong, because it's inherently contradictory.
>behaviors that are also very well documented in media
I don't see any documentation of this behavior. The documentation that does exist is the whole business limps along on a knife's edge, lagging SP500, while have no power to set their prices (the government has to approve their prices). They certainly do engage in outsourcing and underemployment, perhaps to intentionally delay and deny care, but probably leading to just as many incorrect approvals as incorrect denials (obviously you won't hear about the former in the media).