 |
|
Main reason for high healthcare costs. First time
Posted on: February 26, 2021 at 10:34:20 CT
GA Tiger MU
Posts:
252591
Member For:
26.46 yrs
Level:
User
M.O.B. Votes:
0
I've seen this mentioned.
Bizarre market forces are built into the health insurance business. Among the most toxic is something called the 80/20 Rule, which can make insurers want to pay more, not less, for health care services and then pass the inflated cost along to consumers in the form of higher monthly premiums.
Here’s how the rule works: Insurance companies must spend at least 80% of the revenue they generate from premiums on health care costs and quality improvement activities. The other 20% can be used for administrative, overhead, and marketing costs—like, say, advertising campaigns to get more customers or salaries of executives.
PROMOTED CONTENTMgid
Insurance companies serving large businesses have to spend at least 85% of premiums on care and quality improvement, with the remaining 15 percent being theirs to spend as they wish.
That means there’s only one way to make the 15-20 percent of discretionary money a bigger number for, say, those big salaries for executives. And that’s to make sure more is spent on health care services, not less, because 20 percent of $1B is $200M, but 20 percent of $2B is $400M.
Bizarre market forces are built into the health insurance business. Among the most toxic is something called the 80/20 Rule, which can make insurers want to pay more, not less, for health care services and then pass the inflated cost along to consumers in the form of higher monthly premiums.
Here’s how the rule works: Insurance companies must spend at least 80% of the revenue they generate from premiums on health care costs and quality improvement activities. The other 20% can be used for administrative, overhead, and marketing costs—like, say, advertising campaigns to get more customers or salaries of executives.
PROMOTED CONTENTMgid
Insurance companies serving large businesses have to spend at least 85% of premiums on care and quality improvement, with the remaining 15 percent being theirs to spend as they wish.
That means there’s only one way to make the 15-20 percent of discretionary money a bigger number for, say, those big salaries for executives. And that’s to make sure more is spent on health care services, not less, because 20 percent of $1B is $200M, but 20 percent of $2B is $400M.
Please explain why this message is being reported.
MESSAGE THREAD
Main reason for high healthcare costs. First time - GA Tiger MU - 2/26 10:34:20
-