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The numbers given in the article may be exactly correct - and I'm not saying they aren't. But the numbers given are for the last 12 months. I'm not sure, given the economic upheaval over the last 12 months, that we can take any numbers for any business during that time and make any conclusions. To get a more accurate picture, I think we'd need the numbers from the last several years.
Fine, it's all relative but, knock your self out.....it won't be the insurance companies that had higher profit margins.....they have to stay low in order to out sell their competition....they rely on incresed sales volume and not an increase in profit margin to make money (they lose sales when they do that...people shop and go buy elsewhere).
I don't see why anyone should care about the social good, if those who don't have health care and can't pay their bills don't want a social health care option then let them go bankrupt. I work hard and pay for mine, why should I care about anyone else?
If they can't pay their bills because they're poor, then they qualify for Medicaid. If they can't pay their bills because they had a serious illness and their enormous and didn't coverage because even they they could afford it but, didn't want to have to pay for it, they wouldn't have taken the government option either then.
The bottom line is those who can afford it now will be paying for those who can't now, regardless of a government option or not. The current idea for a government option will just be putting all the private insurers out of business and they you'll be working hard and paying to be on the same plan everyone is on.
Orrin Hatch made a deal with them in July. They get 12 year exclusive use of their named drugs over generic.
Orrin Hatch has been tied to big Pharma through donations it made to a charity he started and payments to a lobbying group his son is part of. As far as any deal with Pharma for 12 years exclusive rights over generics, not sure what you mean....if there's a government option or just how long drug patents are in general.
Drugs are patented now for 20 years starting from the date of application for approval from the FDA.
To give a clearer picture of which healthcare firms are earning the most, I've compiled some data from Capital IQ showing net profit margins over the past 12 months for a number of well-known companies. [list][*]Amgen (biotechnology): Profit margin, 30.6 percent
Hmm.
I'd be curious about the last decade, rather than only the last year (which includes the height of the recession).
For instance:
Quote:
From 2000-2007 Profits At The Largest Publicly Traded Health Insurance Companies Rose 428%
or
http://www.cnsnews.com/news/article/52418 (broken link)
Quote:
“Here you go,” he said, looking at a sheet of paper handed to him by an aide. “Insurance companies have seen their profits soar by over 400 percent since 2001 when premiums of consumers have doubled,” Rockefeller said.
There's a chart showing Aetna (first example in the chart) had sales drop by 32% from 2000 to 2003.
But their profits were up over the same period by 635%.
Another, American medical security - over the same period:
sales down 25%
profits up 985%
Must be nice having a business where profits can grow while sales decrease.
Last edited by compJockey; 08-28-2009 at 01:36 AM..
The stats in my post are for the profit margins (expressed as a percentage) of various health related corporations and not annual profit (expressed in dollars) or the increase in annual profit from previous years (expressed as a percentage).
There's a huge difference so, let's make sure people understand that with an example. I know there's a lot more complicated than this but, I'm going to keep things simple for this example. I'll use the insurance industry overall average profit margin that's been given of 3.4% and let's assume that it never changes for this example. Let's say a company had $1,000 in sales one year, giving it a profit of $34.00 and the following year it had $10,000 in sales, giving it a profit of $340.00 that year. It's profit margin remained the same and yet it's profits from one year to the next, increased by 1000%.
I'm going to address each of the links you posted but, in two parts (the first two now and the last one, on a separate post)
Quote:
Originally Posted by compJockey
Hmm.
I'd be curious about the last decade, rather than only the last year (which includes the height of the recession).
This all starts with Sen. Charles Schumer and Health Care for America Now (HCAN), which is backed by ACORN. In building a case in support of a government plan, HCAN compiled data from the AMA for each state to show.....in their words (the links follows the quote):
In releasing a new report today that shows extreme health insurance industry consolidation has resulted in a market failure where a small number of large companies use their concentrated power to control premium levels, benefit packages, and provider payments in the markets they dominate. As a result, health insurance premiums have skyrocketed, going up more than 87% - on average - over the past six years.
Health Care for America NOW - New Report: Private Insurance Mergers Lead to Near-Monopolies Across the Country (http://healthcareforamericanow.org/site/content/new_report_private_insurers_consolidate_and_contro l_prices - broken link)
The individual state reports are here:
Health Care for America NOW - State Reports: Lack of Competition in Health Insurance Market (http://healthcareforamericanow.org/site/content/state_reports_competition - broken link)
Schumer went on the attack with the report in hand by saying:
“This is the starkest evidence yet that the private health care insurance market is in bad need of some healthy competition,” Senator Schumer said. “A public health insurance option is critical to ensure the greatest amount of choice possible for consumers."
On a side note, I have to admit I don't like Schumer.....not because he's a Democrat (could care less about that). A lot of actors end up in politics, Schumer's a politician that should go into acting....the guy knows how to do drama. His performance during the confirmation hearings for Roberts and Alito was priceless.
Going a step further:
After reviewing the report entitled “Premiums Soaring in Consolidated Health Insurance Market,” David Balto, former Policy Director of the Federal Trade Commission and now a Senior Fellow at the Center for American Progress, sent a letter -co-signed by HCAN - to the Department of Justice Antitrust Division asking for a comprehensive investigation into the health insurance marketplace.
In the past 13 years, more than 400 corporate mergers have involved health insurers, and a small number of companies now dominate local markets but haven’t delivered on promises of increased efficiency.
As far as I'm concerned this is a bunch of smoke and mirrors in an attempt to justify that a public option is needed to create competition (which it won't...it will just put them all out of business). If you look at each state report, the consolidation is almost always because of Blue Cross and one other major insurer (either United HealthCare, Aetna or Cigna for the most part). Blue Cross has always been the dominant insurer in each state (in some cases they were chartered by the state and even subsidized). Recently though, WellPoint has bought many of them (each state is a separate company) and made them public owned corporations.
What's not being brought up here is that the reason the HMO's (United HealthCare, Cigna and Aetna) have taken over so much of the rest of the market, is because of HIPAA. HIPAA has been implemented in stages starting in 7/97....regulations that have put many of the smaller insurers that offered group and individual plans, out of business.....that's what happened to the competition. After the company goes under, they close the home office, lay off the entire staff (including the execs) and sell the accounts to one of the bigger insurers still in business.....that's what a lot of the mergers were....fire sales and not a bunch of CEO's putting their heads together and trying to figure out how to monopolize the industry without getting caught (that's not the case with WellPoint though, they were mergers).
I have a post I started that's all about HIPAA and how it's put us in the mess we're in but, it's not being mentioned.....it's reform that focuses on what's idealistic and not realistic....it doesn't take into consideration any of the real mechanics of how insurance works....only the way should be or needs to be, what's right and moral....that's all good but, you have to look at the other half too:
Profits at 10 of the country’s largest publicly traded health insurance companies rose 428 percent from 2000 to 2007.
The 428% number is an average of only the top 10 publicly traded companies.....it's being used to show proof of the market consolidation because it was due to a large increase in sales volume. It's not meant to represent how much profits increased for the entire health insurance industry. That would be much lower because it would include all the other companies....the bottom ten (that lost money and went under) and all the ones in between......which would include all the mutual companies (that don't have shareholders....the policyholders are the owner in a sense).
HCAN's report was used to write this article about the market consolidation:
Then the Newsvine link that you gave is from a blogger that took the stats that showed market consolidation through increased sales volume of top ten insurers and turned it into a blog about insurance company profits being the reason we need better health care:
What Health Care Crisis: From 2000-2007 Profits At The Largest Publicly Traded Health Insurance Companies Rose 428%
or
CNSNews.com - Rockefeller Uses Health-Insurance Profits Statistic Calculated by ACORN-Backed Group to Make Case for Government-Run Health Care (http://www.cnsnews.com/news/article/52418 - broken link)
Same report just that Rockefeller is commenting on it.
Well! Maybe the poor people should just use their drug money to buy stock in pharmaceutical companies, and then buy their needed drugs with their dividends.
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