Professor S
03-16-2010, 08:37 AM
We've heard a lot of claims from supporters of the Senate reform bill that the drastic increases in health care costs over the last few years have been caused by "record profits" from health care insurance companies.
The truth is that health care insurance has one of the worst profit margins out there when it comes to major industries, averaging 3.3%. (or 4.4%, I'm having trouble justifying the chart with the yahoo data)
http://1.bp.blogspot.com/_otfwl2zc6Qc/SoMLoWBKM4I/AAAAAAAAK4g/wKdZyg5LxQ0/s1600/profits.bmp
http://biz.yahoo.com/p/522qpmd.html
This is far below the average for the health care industry as a whole (~15%). Also, other "must have" services like telecom (domestic), textiles, and food average far higher profit margins while being considered very competitively priced and affordable.
If profit margin isn't the root cause of the cost increases, what is?
The truth is that health care insurance has one of the worst profit margins out there when it comes to major industries, averaging 3.3%. (or 4.4%, I'm having trouble justifying the chart with the yahoo data)
http://1.bp.blogspot.com/_otfwl2zc6Qc/SoMLoWBKM4I/AAAAAAAAK4g/wKdZyg5LxQ0/s1600/profits.bmp
http://biz.yahoo.com/p/522qpmd.html
This is far below the average for the health care industry as a whole (~15%). Also, other "must have" services like telecom (domestic), textiles, and food average far higher profit margins while being considered very competitively priced and affordable.
If profit margin isn't the root cause of the cost increases, what is?