Is there a Cost Angel in Health Care. You can be Insured There Is

After finding so many parties that seem to cause the price of health care to rise, we should be able to look to the health care Insurance companies as one group that is on the side of the cost angels. If anyone has a vested interest in containing and reducing costs it is surely the insurance companies.

Whoa, there nugget! Let’s not go off getting ahead of ourselves. Before we just “ass-u-me”, perhaps we can consider what motives are behind these pillars of capitalism and selfless servants of society’s civil subjects. First and foremost they want to make money, more importantly profits. Secondly, No! there is no secondly; they want to make money, the more the better. So how would their making money, affect the cost of health care?

There would seem to be two basic ways for them to make money. Way number one, they can operate their businesses efficiently, control their costs and provide their services at a more competitive rate so that they can gain clients and thereby increase their profits by gaining market share. Now this is very hard to do; it requires constant diligence to controlling operational costs, obtaining exceptional investment returns and reducing pay outs whether fraudulent or even justified. But these efforts are directed at increasing profits and do not clearly lead to lower costs for us health care consumers. Just because the premium costs are as low or lower than their competitors would also require that they pay out at the same claims level as their competitors; and in order to know that that would happen the companies would have to violate one of their profit-motives. So naa! Cheaper for them is not cheaper for you.

Way number two, they can do all the above and they can raise the cost of health care in order to justify their rate increases. Now this is the easy way to make money. The higher the cost of health care, the higher the cost of their premiums, and guess what; their regulatory body and government approved rate of return is going to generate more absolute cash in profits than if the cost of health care is lower. So our salvation from these advocates of avarice is unlikely to be realized.