ShobThaBob
Yes, that is what I am saying. I do know what a non profit is. This year, Metlife posted a 1.5billion profit for the first quarter. Medical care is expensive, and one of the reasons it's expensive is because you have a cog in the wheel that does nothing except pool money together and distribute it to people who need it. Looking at a giant problem like the cost of medical care is daunting, and addressing one issue at a time can lead to bigger changes over time. Americans also very badly want a free market medical care system. I personally don't think it's the best, but this A - saves billions and billions of dollars, and B - works within the confines of what Americans want and currently have. That's not a bad thing.
First of all, MetLife doesn't offer health insurance, unless you count dental. Their primary product is life insurance. Humana is the
fourth largest medical insurer in the US with 4.56% market share. Let's look at them for 2011, just because they are my insurer.
http://www.gurufocus.com/StockLink.php?type=sec&symbol=HUM&date=2012-02-24&report=10-K
Humana had revenue of: $36.823 billion
Humana had expenses of: $34.488 billion
Humana had pre-tax income of: $2.235 billion
Humana had a net income of: $1.419 billion
Their benefit ratio was 82.1% or $28.823 billion
Their operating cost ratio was 14.8% or $5.395 billion
So, of Humana's figures, only about 6% is kept by them and the government. If they were non-profit you would save everyone $2.235 billion. We would all still have to pay in $28.823 billion to cover medical expenses, $34.488 billion if the staff isn't volunteer and the land, equipment, and utilities aren't donated. Considering Humana uses one of the few skyscrapers in Louisville I'm going to assume you can't find that many FTEs or property for free. And that $34.4 billion is only 4.5% of the total expense in the health care industry.
So your plan is to have a non-profit with operating expenses of at least $28.8 billion dollars, closer to $576 billion if it is to cover everyone. And it will ultimately save US citizens 6% in premiums. This is all assuming all insurers have similar profit ratios. This does not save on co-pays, deductibles, and elective and questionable procedures that aren't covered by insurance.
The biggest problem with my solution is that it doesn't save enough money? Metlife is one company, and 1.5b is a lot of cash.
Even if they did health care, it is small change in comparison to the actual costs of health care itself. You are trying to save single digit percentages from an industry that makes it possible to have thousands, even millions, of dollars in treatments for things like cancer and heart attacks for an average of between $1,000 and $1,500 a year per person. If they want to take 4% off the top for themselves then OK.
Now, I am not saying your plan doesn't save some money, although it is relatively very little, but you are going after the wrong pool of money. While you are chasing $1.5 billion (or $2.2 billion), I am looking at the bigger picture. I see three numbers: $28.8 billion in medical, $5.3 billion in operating expenses, and $2.2 billion in profit. I am saying we can save much more by finding a way to cut down on that $28.8 billion and on that $5.3 billion.
Ultimately, if we can find a way to get people more directly involved in the cost of their medical care and have insurance be primarily for calamity situations, like every other form of insurance out there, you have doctors having to worry about cost driving patients away when it comes to primary care and check ups and getting into price competition, lowering the $28.8 billion. Then if insurance is for calamity coverage you reduce the $7.5 billion (5.3 expenses + 2.2 profit) that insurance adds on to the cost. They will have less operating expenses and less total profit, but they may be able to actually have a better profit ratio if they do it right. Never mind that they just might be able to negotiate better costs if they can just focus on the big stuff, lowering all the numbers even more.
Now, do you see what I'm saying? Find a way to lower all costs. Your plan goes after one thing while making the only thing making medical care affordable to most of the US sound like the bad guys.
If you want to find someone to take away from, talk to the guys taking $816 million while doing nothing in the whole process other than setting rules that just keep making it more expensive.
That would keep you up for a while...
