Problem of Privatized Healthcare System boiled down to "MarkUp"

...I've been trying to sum up the reason for the biggest cause of cost differential between our system and other industrialized western democracies and came up with a one word summation. "Markup".

 

Claudia's presentation bore this out.

 

Individuals, and our government purchase health care through a health insurance company middleman. Countries with good health and low costs purchase directly from health care providers. There's other things too, but the primary cause of cost difference is, "markup".

 

As any businessperson knows, you can't sell at cost and make a profit. If you buy an item for $100 and want to net 15% profit and have 25% in costs, incl. advertising, administration, salaries, commissions, entertainment, travel, stock options, lobbying, etc., you need to mark up the $100 basic cost 140%, so the cost to the buyer is $140, not $100. After expenses, the seller (insurance company), comes up with a $15 profit on $100 of health care, but needs to mark it up to $140 to make $15. Where you have $600,000,000 in stock options for Bill Mc Grath at United Health Group plus smaller stock options for the other executives, it  probably increases "expenses", so mark up might be more like 145% or 150%.

 

Health providers have to keep pace with inflation, and they actually provide the "health care". Unfortunately when they justly increase their cost by 5%, and we purchase their care through a health insurance middleman, our increase is 5% x 140% = 7% and a 7%  increase becomes 9.8%. Other countries deal only with the provider increase, no markup.

 

I'm going fishing. See you guys and gals in July, by which time I'm sure you will have our politicians squared away on a single payer system.

 

Best regards,

                          Brian Stompe