Health Insurance Profits

Re-evaluating American Health Policy: A Catholic Democrat’s Perspective (Part II)

Dr. Peter Pronovost is a distinguished physician known for his efforts to decrease the frequency of deadly hospital-borne infections. His remedy to the problem is surprisingly simple: a checklist of ICU protocols that directs physician sanitary practices (e.g. hand-washing). Hospitals that have put Pronovost’s checklist into practice have had immediate success, reducing hospital-infection rates somewhere between (estimates vary) well over a third to a whopping two-thirds within the first few months of its adoption. Yet as the story goes, many physicians have rejected this solution and Pronovost has struggled to persuade hospitals to adopt his reform.

The Centers for Disease Control and Prevention estimates that nearly 100,000 American deaths are caused or contributed to by hospital-borne infections. Blood clots following surgery or illness are the leading cause of avertable hospital deaths in the U.S., which by the most liberal estimates might contribute t o the death of almost 200,000 patients annually. Given such a hideous fact, why exactly does a doctor need to travel about and emphatically seek to persuade other medical institutions to adopt, in effect, a cost-free idea that could save so many lives?

How is that an industry which stridently decries the high cost of liability insurance or the absolute injustice of our tort system(which does need reform) need such petitioning to embrace such a simple technique to save thousands of lives? Moreover, in the United States it is not unheard of for a whole business to shut down due a single illness from some suspicious food—yet, we tolerate the killing-via-negligence on such a grand scale in our hospitals? Medical mistakes and institutional carelessness do not qualify as some must-be-accepted inevitability.

This reality has been almost entirely been neglected in the discourse on health care reform. Beyond the structure and financing troubles of our medical system, the institutional practice and governance of hospitals are in need of severe criticism. For example, in what alternate dimension does the peculiar scheduling of hospital work shifts in any way benefit the patient? A few weeks at the hospitals virtually guarantees a never-ending string of new personnel assigned to one patient’s care. If this can be avoided, should it not? It seems quite reasonable to presume that passing patients off from doctor to doctor, or nurse to nurse, might increase the chance of someone making a mistake? The effect of changing such a seemingly small problem could be huge. Or, take for example, the “sanitary” environment of hospitals in general, which contribute to the nearly 100,000 annual American deaths. Anyone who has ever worked in “corporate America” or in a large building in general might note that the trash is picked up once daily. Is it any different in a hospital? It takes some sort intellectual schizophrenia to insist on ICU sterility in a building if one has not the slightest care over how many times trash (never mind what is in it) is picked up in a day.

Any array of complaints about institutional malpractice must lead to the inevitable question: how is it that the most technologically advanced medical institutions in the industrialized world miss out on a just as modern, just as recent, revolution of quality control and customer-service that has pervaded every other consumer-based industry?  The answer to this question is telling. →']);" class="more-link">Continue reading

Excessive Health Care Profits

In the health care reform debate, we often hear about how huge amounts of money that could be going to provide people with treatment is being sucked up by insurance company profits instead. This kind of thing always makes me wonder, since in my experience a competitive market place will usually drive profit margins down pretty low. So I thought it would be illustrative to look up how much money the top private insurance companies make, and then determine their profit margins and profits per enrollee.

The following information is publicly available on Google Finance. Revenue figures are annual ones for the year ending 12-31-2008. The total revenue, income before tax and income after tax figures come directly from each companies public financial reports. The enrollee figures are potentially slightly more approximate, since there I googled for the most recent press release which showed total enrollment for each company.

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It struck me as interesting that it was Humana, with the lowest profits per enrollee in 2008, which just posted a healthy profit increase for Q2. Wellpoint and Aetna have suffered membership declines in the last quarter.

In no case is the company making more than $100 per enrollee per year in profits. Given that most insurance plans cost a good $4000-$6000 per year, the amount of what we pay for insurance that goes to “lining insurance companies’ pockets” would seem to be fairly small.

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