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HEALTH PLANS: Health Plans Behaving Badly

I spent Monday lecturing a bunch of health plans about their bad behavior and how that had to change or they’d eventually be put out of business. So how might that not play out? Here’s my best guess up at Spot-on. It’s called Health Plans Behaving Badly.

It’s not been too pretty a picture for America’s health insurers lately. Sure they’re still turning decent profits, but for the past two years their stocks have barely been matching the S&P 500 Index. What went wrong? Well, you can blame Wall Street. The Street is concerned with two things. Money now and money later.

Since 2001 the big health plans have managed to increase the percentage they keep of fast-growing health care premiums (which have been going up at 3 to 4 times the rate of inflation), a number known to stock analysts as the as the MLR. It used to be that for most big insurers roughly 82-87% of premiums went out the door to pay for actual doctors, hospitals, drugs et al. Now the MLR is generally below 80%, and in some cases below 75% meaning less money’s out the door and more is on the bottom line of the health plans.

But the health insurer party that’s been going on for most of this decade may be coming to an end. But perhaps being busted by the cops and being told to tidy the house might be the best thing that ever happened to the insurers. Let me explain.

Read the rest and come back here to comment as ever.

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KEITH KREBSJoeguinbev M.D.Peter Recent comment authors
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KEITH KREBS
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KEITH KREBS

GREAT THE UNITED HEATHCARE WEBSITE DOESN’T
WORK……IF THE WEBSITE DOESN’T WORK AND COMPUTERS ANSWER THEIR PHONES ….THEN IS THIS FRAUD WHEN THEY GET MONEY
VIA THE U.S. POSTAL SYSTEM?

Joe
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Joe

As I watch the public debate it’s disappointing to see that one party or another is being blamed for health care’s woes. We are all to blame. No one is talking about the real issues such as: Who is going to pay for the sharp increases in cost for care by physicians, hospitals and other care-givers? Who is going to pay when the federal government cuts its payments to the health care delivery industry? Who is going to pay for big pharma which nearly half of their revenues go to advertising/marketing? I mean, as you watch a football game, don’t… Read more »

guin
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guin

A universal health care system could be the right move for the United States, or at least something to consider. In the United States today, we may have state of the art equipment, but many citizens can not afford to get treated for their illnesses and ailments. In a democracy, everyone is supposed to be equal, so why isn’t everyone treated equally when it comes to health care? The fact is, insurance providers and the health care system in the United States is only worried about making a profit, just as any other corporation would be. For many U.S. citizens… Read more »

bev M.D.
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bev M.D.

Matthew; Insurance companies have absolutely no interest in “managing their members”. It’s too much work for them,and it’s not what an insurance company is all about. Insurance is about risk minimization per premium paid, period. That’s why I think the very concept of health “insurance” is dead. We need companies whose mission is to truly manage patients’ care for the patients’ benefit, and make money as a side effect when those patients need fewer expensive treatments for disease. And no, that’s not the same as the old HMO’s – they were just insurance companies under a different name; still trying… Read more »

Peter
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Peter

Two points:
1. Healthcare has no business being a for profit undertaking.
2. Private enterprize either wants government out of its life – to make a profit, or in its life – to make a profit. Funny how ideology shifts for the money.