Babhadfad12 t1_j1upej5 wrote
Reply to comment by JRZane in Why are NJ doctors, especially those in family medicine all joining for-profit, multi-specialty medical groups? Those groups do are deteriorating the good doctor and patient communication/relationship that use to exist. by Eastcoastpal
> Did you know that in 2020, during a pandemic, Indep Blue Cross had its highest profit year EVER!?!? Think about THAT one….
3.4% “profit” margin in 2021, 2.9% in 2020, 2.1% in 2018. And not really a profit margin since Independence Blue Cross is a not-for-profit so there are no owners to distribute profits to.
https://www.ibx.com/about-us/annual-reports
Managed care organizations (aka health insurance companies) have tiny profit margins in general. UHC has 6%, as an outlier, but the rest, Elevance, CVS, Cigna, Humana, Centene, Molina, etc all have 2% to 4% profit margins, year after year for a decade +.
Not really much juice left to squeeze there. The bigger profit margins are in pharmaceuticals, software vendors, equipment vendors, and doctor groups (which PE firms had noticed 10+ years ago).
JRZane t1_j1uvr5f wrote
as a business owner, I understand the importance of margins, but that marginal increase translates to them profiting 2.6BILLION dollars more than the previous year. My real point being this was during a pandemic. Sure, during typical years a 2-4% increase is a sign of good, lean management. but it's the same way flood insurance companies make more money during floods....it sure seems counter intuitive, no?
and keep in mind that increase also included the "cost sharing" programs where all copays were waived because they were making so much damn money apparently they felt guilty or were just concerned about blow back. I haven't seen any published figures about what they "waived" but Im willing to bet it'd bump that 2.6B up a bit if they weren't on the hook for it.....
https://news.ibx.com/independence-health-group-reports-2020-financial-results/
maybe im just cynical because I see it from clients perspective and see so many people struggling to access care to sustain a basic quality of life I believe in this country should be an inherent right. I dont believe healthcare should be attached to employment, and I do NOT believe in single-payer solution. (government OPTION.....maybe.)
Babhadfad12 t1_j1uwp9c wrote
> as a business owner, I understand the importance of margins, but that marginal increase translates to them profiting 2.6BILLION dollars more than the previous year.
Nominal profits are not comparable year to year, especially due to the decreasing purchasing power of the currency, aka inflation. Hence, it is most appropriate to use profit margins when comparing a business’s performance over time.
> Sure, during typical years a 2-4% increase is a sign of good, lean management. but it's the same way flood insurance companies make more money during floods....it sure seems counter intuitive, no?
Health insurance companies are kind of / not really insurance companies, which is why I think managed care organizations is a better term for them.
JRZane t1_j1uxc97 wrote
Just reading the report I linked.
"Independence Health Group, Inc., (Independence) the parent company of Independence Blue Cross, LLC, reported solid financial results for 2020 with total revenue of $21.8 billion, up $2.6 billion or 13.5 percent over 2019"
you could argue the same for profit margins too. If you want to get into depreciation, cash on hand, deferred losses, bad debt, real estate depreciation/appreciaiton. then those numbers Never mean anything at all. you're still getting lost in the numbers and missing my ACTUAL initial point. what you're saying is valid, but I believe your missing the forest for the trees here. good day, good luck. im out.
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