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You haven’t done anything but prove the GP’s point. Their margins are necessarily low, so they should want total medical costs to increase in order for their g
by jtbayly 3y ago
You haven’t done anything but prove the GP’s point.
Their margins are necessarily low, so they should want total medical costs to increase in order for their gross profit to increase. And in fact, just checking one of them from your links, it has:
https://www.macrotrends.net/stocks/charts/HUM/humana/gross-margin https://www.macrotrends.net/stocks/charts/HUM/humana/gross-m...
- ochoseis 3y agoThere is certainly nuance but UHC’s net income has grown from under $4B in 2010 to over $20B today. https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-group/net-profit-margin https://www.macrotrends.net/stocks/charts/UNH/unitedhealth-g...
- lotsofpulp 3y agoNominal profits are more work to analyze since you have to figure out if UHC is selling to 5x as many customers in 2020 as they were in 2010, and then also adjust for inflation and a bunch of other stuff. It is simpler to just look at profit margin.
- lotsofpulp 3y agoI agree with AnthonyMouse that a business might be incentivized, but only if the business has so much market share that they can singlehandedly drive those prices up. Or if there is collusion between all the businesses. But the fact that there are so many publicly listed companies, and they have such similarly low profit margins, indicates they have very little pricing power.