Billing in Healthcare

[somarco]

Profit margins do not matter. Insurers are working with a much smaller margin than decades past due to regulations. But they are making larger profits than ever before (as a dollar figure), due to unrestrained Cost of Care increases.

Id much rather a 5% margin on $2b vs. a 10% margin on $500m.

The whole "profit margin" debate with healthcare industry is a false narrative that is not taking into account the reality of the money being made.

So they operate under a smaller margin... but they have done nothing to control the cost of care... so they make a ton more money off the smaller percentage... while saying "our margins are smaller than ever".

I agree, and I brought it up because the OP mentioned profits . . . a concept often used by the left to "prove" their point. This is normally followed by the inane argument that health care should not be a for-profit business which leads to a tangent argument that health care is inflated by X% (usually double digits) because of PROFITS.

Yes, the absolute dollars increase with claims, but the MARGIN (which almost no one addresses) is a very small figure relative to premiums billed. Quite often in the 2% to 4% range.

So if everyone in the food chain were willing to offer their services at $0 profit overall health care costs would be in the neighborhood of 4% lower.
Utilization is a bigger driver in the equation than anything. That is closely followed by redundant testing as a CYA measure in an attempt to sidestep litigation.

The folks who focus on profit and have no clue what they are talking about are completely oblivious to the other, much larger factors, such as insuring things that should not be covered (claims less than say $200 - $300), redundancy, excess utilization, DTC advertising (ask your doctor if X is right for you), overutilization of the ER, scheduling an OV for something that could be handled by a phone call or even an urgent care clinic . . . the list of INSURED items that should be paid OOP in cash is almost endless.