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14 September 2009

Health Care Capitalism 101: Maximize Profit Minimize Expenditures


It's not rocket science folks.  Health insurance companies make profit by taking your premiums and then denying your claims.  The sole purpose of  any  corporation is to maximize profits for the shareholders.  The health insurance industry in the United States has set the standard for maximizing profit.  They reward their top executives with obscene amounts of money while denying claims to sick and injured people who paid for coverage.  "These guys are operating on the sole basis that they want to retain as much as they can in premium dollars for their investors and their own pay," Robert McGarrah, counsel for the AFL-CIO Office of Investment, told CNN Money.

H. Edward Hanway, CIGNA CEO enjoys a total compensation package of $12,236,740.  He also enjoys more than $21,000 in other compensation which includes emergency assistance services relating to medical exams.


"Revenue rose to $21.66 billion from $20.27 billion on increased premiums, which grew partly due to price increases. UnitedHealth is the largest commercial health insurer based on revenue." UnitedHealth 2nd-quarter profit rises, but commercial enrollment slide continues, Tom Murphy, July 21, 2009.
How has UnitedHealth managed to increase revenue during a deep recession and the loss of 1.3 million people in its commercial enrollment?  In addition to increasing premiums, UnitedHealth is taking their cut of public sector reimbursements for Medicaid and Medicare.  UnitedHealth has enjoyed a 15% increase in government-backed Medicare and Medicaid business.
“We expect this year’s revenue growth in public and senior business to continue to more than offset the potential for further pressure from the employer market,” UnitedHealth CEO Stephen J. Hemsley said in a conference call with analysts. Id.
Fortune 500 ranks UnitedHealth number 1 for industry revenues and profits  so  far, for 2009. In the free market, capitalist society UnitedHealth is doing exactly what it should be doing - maximizing profits and minimizing expenditures.  UnitedHealth naturally will do all it can to prevent more stringent industry regulation and will fight hard against any form of health care reform that threatens its profit.  Blue Cross and Blue Shield spent more than $2.8 million in the second quarter of 2009, an increase of $1 million  compared to the first quarter.  Lobbying expenditure reports are available to the public via the Lobbying Disclosure Act Database.  Click on the name of the client to open the report for viewing.  My search results were revealing.

Five years ago (October 10, 2004) Physicians for a National Health Program posted an article urging reform.  “There will be no health care for all Americans until our political leaders are willing to take on a health insurance industry that showers them with cash,” said Douglas Dority, president  of  America’s Agenda: Health Care for All that assists  grassroots groups in the battle for universal health care. He is also the former president of the United Food and Commercial Workers union (UFCW).
“The insurance companies with their scandalous profit-taking deny access to care to even those with insurance by practices of excluding pre-existing conditions, complex paperwork and uncovered benefits,” said Dr. Claudia Fegan, president of the Physicians for a National Health Program (PNHP). “Over 12,000 physicians support a national health insurance program that will cover everyone with the money we would save from the administrative waste of our current system.”  Break the Insurance Lobby Choke-hold on Health Care, PNHP, October 10, 2004.
Just how tight is the choke-hold that insurance companies have on health care in America?  According to  Physicians for a National Health Program,  administrative costs of maintaining a staff to deal with insurance companies and claims amount to one-third of all health care expenses.   PNHP estimates that more than $350 billion per year could be saved by eliminating for profit private health insurance companies.  This money is more than enough to provide comprehensive health care coverage to every American without increasing current costs of premiums and out of pocket expenses.
"Having years of experience with claims review from the provider side, I can assure you that the [legal] recourse is not considerable. Arbitrary claim denials are routine, often relying on the flimsiest of pretexts, if the reviewer even bothers with a pretext. The recourse is hours of the clinician's precious time--time that isn't available because of clinical responsibilities and responsibilities for the claims of other patients. The reviewers know this and understand that they can make the appeals process impossible from a practical standpoint."  Posted by Dr. X on Chicago Tribune Blog: That Deadly Word "Denied."
If it appears that health insurance companies are being cast as the bad guys in the health care reform debate, maybe its because they are the bad guys when it comes to sick people being denied necessary medical care.  I can't speak for you, but any person who would come between my child and a medical procedure, medicine or treatment that would save his life just to keep a few thousand dollars of my premium payments - he's not just the bad guy, he's an evil, greedy son of a bitch. 



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