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#219667 - 04/11/12 02:38 PM Re: The cost of health care and insurance [Re: Phil Hoskins]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?


What Is ObamaCare?

Quote:
Growing up in the post-war era (after the Second World War), I never expected to live in the strange Kafkaesque world that exists today....
Americans have been brainwashed into believing that "a single-payer system is unaffordable" because it is "socialized medicine." Despite this propaganda, accepted by many Americans, European countries manage to afford single-payer systems. Health care is not a stress, a trauma, an unaffordable expense for European populations. Among the Western Civilized Nations, only the richest, the US, has no universal health care.
The American health care system is the most expensive of all on earth. The reason for the extraordinary expense is the multiple of entities that must make profits. The private doctors must make profits. The private testing centers must make profits.The private specialists who receive the referrals from general practitioners must make profits. The private hospitals must make profits. The private insurance companies must make profits. The profits are a huge cost of health care....
Because a single-payer system eliminates the profits that drive up the costs, Wall Street, Insurance companies, and "free market economists" hate a "socialized" medical-care system. They prefer a socialized "private" health-care system in which public monies flow into private insurance companies.

"Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has just been published.... He was awarded the Treasury Department's Meritorious Service Award for "his outstanding contributions to the formulation of United States economic policy."
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#219674 - 04/11/12 04:48 PM Re: The cost of health care and insurance [Re: numan]
Ted Remington Offline
old hand

Registered: 07/09/08
Posts: 4890
Quote:
The private insurance companies must make profits. The profits are a huge cost of health care....


Really? How interesting. And how completely separated from reality. The reality is that health insurance profits are only a very small part of the overall cost of providing healthcare through insurance companies in the United States.

Mr. Roberts is entitled to his opinion, of course, but he is not entitled to make up facts.

Quote:
The public debate over health-care reform has been dominated in recent days by the issue of the so-called "public option" -- namely whether the government should offer an insurance plan that competes with those offered by private insurers.

It's not clear whether that plan will pass, but the proposed changes have made many investors question what reform could mean for health insurance company stocks.

Many on both the right and left think a public plan will wipe out the high profits in the private insurance industry. But that aspect of a public option may be more symbolic than substantive. Health insurance companies aren't quite as profitable as many critics seem to think.

"For every premium dollar that they take in, about 83 cents goes out in medical costs -- doctors, hospitals, and drugs," says Carl McDonald, health insurance analyst at Oppenheimer & Co. The rest is spent on overhead. Net income comes to just a few cents per dollar of premiums.

Consider WellPoint, WLP +0.39% the biggest private health insurer on Wall Street, which has about 35 million customers nationwide. Last year, it paid out 83.6% of revenues in expenses. Net, after-tax income as a percentage of total revenue came to a princely 4.1%.

In other words, simply eliminating profits would only allow the public option to undercut the private sector by 4% or so.

Returns on assets, a key measure of profitability, are typically pretty modest too. According to analysis by FactSet, WellPoint's ROA has averaged 5.8% over the past five years, Aetna's, AET +0.04% 4.2%. Those were, remember, supposedly boom years. UnitedHealth UNH +0.80% was higher, at 9.6%, but fell to 6.4% in 2008. These are reasonable, but hardly spectacular, results. By comparison, Wal-Mart averaged a 9.2% return on its assets and Dell, Inc. 12.4%.


Source: Wall Street Journal

These FACTS have been presented here many times, and have been routinely ignored by some because they do not fit into the world which they have created for themselves.

Just one observation:

If the health care insurance industry is so damned profitable why are there not tons of people out there forming companies to get in on the action? Why? Because the returns are so historically low, due mainly to the extreme competition in this particular marketplace.
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Take the nacilbupeR pledge: I solemnly swear that I will help back out all Republicans at the next election.

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#219679 - 04/11/12 05:22 PM Re: The cost of health care and insurance [Re: Phil Hoskins]
california rick Offline
Member
Carpal Tunnel

Registered: 05/09/05
Posts: 36008
Loc: Bay Area, California
Welp, this link shows that the health care insurance industry made a giant leap in profits from 2009 to 2011. Hmm
_________________________
Contrarian, extraordinaire



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#219686 - 04/11/12 08:18 PM Re: The cost of health care and insurance [Re: Phil Hoskins]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'
Really, Rick, surely you don't think that your link could be as authoritative as Ted's link to one of Rupert Murdoch's finest propaganda outlets!
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#219687 - 04/11/12 08:27 PM Re: The cost of health care and insurance [Re: Phil Hoskins]
california rick Offline
Member
Carpal Tunnel

Registered: 05/09/05
Posts: 36008
Loc: Bay Area, California
Murdoch is an agenda-ist. Pity his empire is crumbling... coffee
_________________________
Contrarian, extraordinaire



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#219691 - 04/11/12 10:00 PM Re: The cost of health care and insurance [Re: numan]
Ted Remington Offline
old hand

Registered: 07/09/08
Posts: 4890
Originally Posted By: numan
'
Really, Rick, surely you don't think that your link could be as authoritative as Ted's link to one of Rupert Murdoch's finest propaganda outlets!


One would have thought that someone with your self-proclaimed genius level of intelligence on all matters under the sun would seek to discuss and dissect the facts, rather than to throw out a red herring such as attacking where the facts were published.

Again, I ask:

If the health insurance field is so damned lucrative, why is no one new trying to get a piece of the action?
_________________________
Take the nacilbupeR pledge: I solemnly swear that I will help back out all Republicans at the next election.

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