Comments on: An Arm And a Leg http://blog.jonolan.net/politics/an-arm-and-a-leg/ The eclectic ramblings of jonolan Sun, 12 Feb 2012 18:56:15 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: jonolan http://blog.jonolan.net/politics/an-arm-and-a-leg/#comment-14318 jonolan Sat, 06 Feb 2010 18:30:13 +0000 http://blog.jonolan.net/?p=16465#comment-14318 That's close to true, pino, or at least not an unfounded assertion. <a href="http://www.pnhp.org/facts/single-payer-faq#administrative_costs" rel="nofollow">Physician For a National Health Program</a>, a pro Single Payer group, claim private insurance's administrative costs are 31%. On the other hand, <a href="http://hr.cch.com/news/benefits/100209.asp" rel="nofollow">CCH's report</a> - aimed at companies shopping for benefits and at potential investors - has the figure at a baseline of 10.4% but with a lot of variance based upon type of plan. In any event, health insurance has a lot of administrative overhead and few other sorts of costs, so would normally show a high administrative overhead. Some examples of that overhead: <div class="entry"> <ul class="highlight"> <li >Marketing—including research, plan designs, advertising, broker payments, rating, and underwriting.</li> <li>Provider and medical management—provider network and contracts; quality administration and reporting; and medical and pharmacy management.</li> <li>Account and member administration—enrollment and billing; claims; information technology; customer service; communications, and fraud control.</li> <li>Corporate services—finance and accounting; actuarial services; risk management; legal compliance and filing; corporate executives and governance; and investment services.</li> </ul> </div> I don't see where there should be much of a problem with the above. Insurance is, after all a people-centric service industry and one that requires a great deal management in order to function anywhere close to well. BTW - welcome! I'm glad you stopped by. That’s close to true, pino, or at least not an unfounded assertion.

Physician For a National Health Program, a pro Single Payer group, claim private insurance’s administrative costs are 31%.

On the other hand, CCH’s report – aimed at companies shopping for benefits and at potential investors – has the figure at a baseline of 10.4% but with a lot of variance based upon type of plan.

In any event, health insurance has a lot of administrative overhead and few other sorts of costs, so would normally show a high administrative overhead.

Some examples of that overhead:

  • Marketing—including research, plan designs, advertising, broker payments, rating, and underwriting.
  • Provider and medical management—provider network and contracts; quality administration and reporting; and medical and pharmacy management.
  • Account and member administration—enrollment and billing; claims; information technology; customer service; communications, and fraud control.
  • Corporate services—finance and accounting; actuarial services; risk management; legal compliance and filing; corporate executives and governance; and investment services.

I don’t see where there should be much of a problem with the above. Insurance is, after all a people-centric service industry and one that requires a great deal management in order to function anywhere close to well.

BTW – welcome! I’m glad you stopped by.

]]> By: pino http://blog.jonolan.net/politics/an-arm-and-a-leg/#comment-14317 pino Sat, 06 Feb 2010 17:23:32 +0000 http://blog.jonolan.net/?p=16465#comment-14317 <i>To be fair and accurate, neither the insurance companies or the hospitals are currently predatory in nature, operating as they do with a 3% – 4% profit margin</i> But but but...they have a 30-40% administration margin! To be fair and accurate, neither the insurance companies or the hospitals are currently predatory in nature, operating as they do with a 3% – 4% profit margin

But but but…they have a 30-40% administration margin!

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