The REAL REASON private healthcare insurance companies cannot compete with a public option....

[Blackhatjack]

Private healthcare insurance companies START WITH THE PROFIT THEY WANT TO MAKE and add costs to arrive at their premium amounts.

A Public Option would START WITH COSTS and then would ADD NO PROFIT to arrive at their premium costs.

Yep they are right... they just can't compete and get all the $$$ they always got running a monopoly.

[grantcart]

1. Actually its not that they add another redundant profit center without commencerate value

Its that in a mature industry where the matrix of costs are basically fixed they can only compete on reduction of costs, i.e. eliminating benefits.

If there was an option, even if it cost the same, that was motivated in meeting the real needs and not constantly refusing benefits, it would wipe out the competition as people became aware that the quality is so much better than the private option.

[Blackhatjack]

2. ADDED PROFIT is absolutely a component of the Private Healthcare Insurance Companies...

They are corporations with a clear goal of generating ROI to shareholders.

They figure into every decision they make the cost/benefit analysis with the shareholders in mind, not the patients.

[grantcart]

3. You must not have read my reply

Or I didn't explain simply enough to you.

Its not that there exists a redundant profit center (which would give them added cost) that would make them fail in the market place as much as the fact that they are now competing to reduce costs which means higher denial of coverage.

While it is true that the higher cost would be a disadvantage, IMHO, it is the higher denial of coverage that will prove a greater and more fatal problem for them. Consumers will tolerate higher costs (just look at how docile the public has become with skyrocketing costs year after year after year) but they get personally irate when their benefits are deinied.

[JerseygirlCT]

4. Well, reducing costs doesn't only have to happen

from the benefits side of things. Living here in CT - insurance land - I see the news reports of what the top insurance execs are making, for instance... Plenty to reduce there!

[PHIMG]

6. What a great free market voodo explanation

First off all lets throw out the notion that market forces work in healthcare. If you are denied a service from your health insurance company...yeah you'd probably be irate. But what is your recourse? Do you have the freedom to switch plans? Almost always you don't. This isn't like getting a bad hamburg from McDonald's and going to BK instead.

Maybe you get your policy from your employer and you only have one choice. Or maybe you are in the individual market, well now you have a preexisting condition, good luck trying to get a policy with that, and if you do it's going to be so expensive or offer so little in terms of paying for anything that you'd be better off to self insure, go bankrupt and go on medicaid. Or wait for Medicare.

Private Health Insurance is a racket. There is no room for "market forces" to correct this situation. When you are dealing with life and death issues and esoteric skills in medicine there is no such thing as a rational player in the market. The idea that market forces will fix this situation is a fundamentalist ideology run amok.

The only solution is to put everyone into one system (a universal risk pool), cut out all the waste the private insurers add to the system with their cherry-picking underwriting and claim denial system (280+ billion a year) and move to a single payer system. Everyone in, nobody out. It saves money and it covers everyone.

Anything else is rearranging the deckchairs on the Titanic.

Single Payer is inevitable. We can't afford the alternatives.

[SammyWinstonJack]

8. Inevitable? Like death and taxes? Well maybe not taxes, at least not for everyone, that is.

:evilgrin: Anyway, I hope you're right about single payer being inevitable, I really do.

[grantcart]

14. I never said that there is competition in the health care market

There is competition among health care providers for investor dollars and their stock market prices.



The competition to deliver higher profit forces health providers into a competition for who can most skillfully deny benefits.



My point with the OP is that he stating that the redundant profit of health care adds costs. My point is that it doesn't simply add cost but that it also creates a competetive dynamic to deny benefits, and that the latter is more damaging the former.



What will eventually kill the 'so called' health industry is not their higher costs but undermining confidence in their service.



There is both an economic and a moral argument to be made. Single payer health care clearly wins on both counts. It maybe that a public option will be needed as an interim phase but the current system is doomed.

[onethatcares]

17. welcome to DU, I've not seen your handle here before and I'd

like to thank you for your analysis. May I use it in toto?

THanx again and welcome.:hi:

[kenfrequed]

10. hmm yes...but...

Any publically traded company or industry exists to maximize quarterly return on rate of investment. It does not matter whether costs are percieved to be fixed or not in this case.

Premiums and copayments and costs ARE raised above the rate of inflation. Benefits are reduced, cut, or modified. Barriers like 'prior authorization' and other mysterious, complex, bureaucratic, and arcane processes are put in place to deny coverage. And of course the definition of pre-existing condition is twisted and streched and contorted to wipe out anyone that might be costly and actually use the insurance provided.

Medical insurance as it exists has now been designed to collect money from the healthy and deny coverage to those that get ill.

[kenfrequed]

11. Additionally...

The market malarky you put out suggests that the consumers of health insurance are the same people who negotiate its purchase. The negotiators for most health insurance are companies seeking to provide some minor modicum of coverage but who don't want to have to pay too much for it.

Obviously the users of health insurance are just those people in said company that have to pay for it.

[grantcart]

15. And my point is simply that the denial of service is even more damaging

to the health insurance industry than their higher cost.

[kenfrequed]

18. Bah

No, denying service to someone that will cost you more than they will ever pay in is ALWAYS in your interest if you are a 'for-profit' insurance company. That is obvious capitalism and all the squirrelly business school pop-psychology, flavor of the week, Gandhi the CEO, BS will not change that.

As long as there are new patients entering the system(and strangely humans do multiply and reproduce) there will always be a dynamic pool of young healthy people to pay for your profits while you dump older unhealthy people into the state rolls.

[endarkenment]

12. There is hardly any competition.

You are providing a free market analysis of a rentier economy. Your analysis simply does not apply. The health insurance industry does not produce anything and instead arranges for the maximum extraction of rent from peasants through a corrupt relationship with the corporate state.

[grantcart]

16. My comment on competition was for investor dollars not for consumers

My point was simply that in trying to compete for shareholders (by giving higher profits) they deny more and more benefit. It is this denial of benefits that will provide even more disastorous than their increased costs.


There is no free market for consumers for health insurance. It is mostly an employment based benefit and not a consumer based one.

[endarkenment]

21. Oh - well yes that is true.

And that is why they are fighting a viable public option tooth an nail. They cannot compete with a non-profit enterprise that is attempting to maximize services provided to consumers rather than profit returned to investors.

[kenny blankenship]

5. Here's another. These are publicly traded corporations. Execs get paid for the stock going up

Stock will go up only if earnings increase year over year. They HAVE TO make your insurance more expensive every year for that reason. The human body isn't changing so that it costs less to fix one year than it did the year before. Pursuing administrative efficiencies are a phantom. The only way to get higher earnings per share year over year is to charge more on policies and/or expend less on claims. It's an obsolete business model--and one based on unnecessary suffering and death-- if the govt. institutes a real health service.

[checks-n-balances]

7. Excellent discussion - recommended & bookmarked n/t

[Yavin4]

9. Most Businesses Begrudgingly Offer Health Insurance As A Benefit

and the only reason they do it all is to hinder formation of labor unions.

A public option would mean that a large majority of businesses would drop the health insurance benefit and push their employees toward the public option.

[truedelphi]

13. K & R. n/t

[Wednesdays]

19. K&R

:kick:

[metalfox8]

20. Another reason

They can't print money.

[ColbertWatcher]

22. That's such a simple explanation even a teabagger could understand it. k+r, n/t