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Insurance company employees have among the lowest productivity to pay ratios of nearly any industry. They harbor a workforce that is low skill, low effort, and

Insurance company employees have among the lowest productivity to pay ratios of nearly any industry. They harbor a workforce that is low skill, low effort, and high profit, largely via nepotistic hiring.

lotsofpulp 2y ago
Insurance companies have low profit margins, 2% to 3% in most cases. UNH is worth more than 5x its nearest insurance competitor (Elevance) because of its large healthcare provider arm, not because of its insurance business. Otherwise, they are all sub $100B businesses, which indicate not a lot of juice to squeeze.
- blackeyeblitzar 2y ago
  I agree they’re not especially big in terms of profit. However, that doesn’t mean they are not evil. These companies increase profit margin by denying coverage. They try really hard to pretend like they are providing a particular service level and will happily collect your money with that expectation. And then, at a later point, they deny coverage, often in a fraudulent way, in order to create their higher margin. To me the low profit margin is therefore not really relevant. If they provided the product that everyone expects that they are paying for, their margin would be lower and that is exactly what should happen.
  - lotsofpulp 2y ago
    How much lower can profit margin get than 2% before a business stops being a business and becomes a charity? Why would it even have shareholders at that point? Surely, even someone who hasn’t operated a business can see why revenue should exceed expenses by a couple percent to survive volatility, much less make it worth investing in.
    - blackeyeblitzar 2y ago
      Maybe it should be near 0% for this business because that is the end result of competition and a functioning market. Or maybe they should just become better at operating more efficiently. But what they shouldn’t do is artificially create profit margin by stealing from their customers and handing them death sentences instead of providing the care that is paid for. When you deceive and defraud customers and literally cause them harm when they’ve paid you to avoid harm, that does seem evil. That’s what I’m pointing out.
    - jimbob45 2y ago
      The business model contains dark patterns incentivizing patient deaths in many cases. It’s not that they’re turning a profit, it’s that they’re profiting off of death. If it was a break-even org (I.e. non-profit), people would likely have less of an issue with it.
- wahnfrieden 2y ago
  The regulations on profit margins incentivized maneuvering to higher prices to increase absolute profit
  - lotsofpulp 2y ago
    7+ different publicly listed companies and myriad mutual/non profit companies as well as self insured businesses all colluding to pay more so they can collect higher premiums? And simultaneously, health insurers denying coverage left, right, and center to pay less so they can profit more? (See adjacent comment by blackeyeblitzar) Make it make sense.
    - dengxiaopeng 2y ago
      There’s definitely precedent for public companies (even international ones!) colluding to artificially increase prices in a sector. Also a hilarious movie with Matt Damon. https://en.m.wikipedia.org/wiki/Lysine_price-fixing_conspiracy https://en.m.wikipedia.org/wiki/Lysine_price-fixing_conspira... https://en.m.wikipedia.org/wiki/The_Informant https://en.m.wikipedia.org/wiki/The_Informant!
      - lotsofpulp 2y ago
        Has there ever been precedent for companies to collude to increase the prices they pay their vendors? I’m seeing a lot of big claims, but no evidence.
    - hyeonwho4 2y ago
      My guess, stated without evidence: 1. Profits are capped as a percent of health care expenditures. 2. Employers (and people in the Marketplace) purchase insurance mostly based on price, which incentivizes lower prices. 3. (I'm guessing) Medicare advantage pays a flat annual rate to insurers. 4. Insurer denies large claims on Medicare Advantage accounts, turning annual rate directly to profits. 5. Insurer's denial of claims for other classes of policy lowers the price of the policy, increasing competitiveness. 6. Providers fight with insurance policy and fall back to billing patients, who can only pay pennies on the dollar. 7. The providers raise future rates to compensate for the costs and losses incurred by denials. 7. Increasing prices for all customers yields the desired absolute profits, without penalizing the company doing the denials.
Loughla 2y ago
How do I get a low skill high pay job? That sounds awesome.
- JumpCrisscross 2y ago
  > How do I get a low skill high pay job Why are you assuming high pay? Claims adjusters make like $50k per year for semi-skilled work.
  - Loughla 2y ago
    Where I live that's a pretty good salary.
bobxmax 2y ago
Source? Not denying what you're saying, just curious about the data.
- smolder 2y ago
  Just personal experience and that of people close to me. Sorry, I have nothing concrete to offer here.

lotsofpulp 2y ago

Insurance companies have low profit margins, 2% to 3% in most cases. UNH is worth more than 5x its nearest insurance competitor (Elevance) because of its large healthcare provider arm, not because of its insurance business. Otherwise, they are all sub $100B businesses, which indicate not a lot of juice to squeeze.

blackeyeblitzar 2y ago
I agree they’re not especially big in terms of profit. However, that doesn’t mean they are not evil. These companies increase profit margin by denying coverage. They try really hard to pretend like they are providing a particular service level and will happily collect your money with that expectation. And then, at a later point, they deny coverage, often in a fraudulent way, in order to create their higher margin. To me the low profit margin is therefore not really relevant. If they provided the product that everyone expects that they are paying for, their margin would be lower and that is exactly what should happen.
- lotsofpulp 2y ago
  How much lower can profit margin get than 2% before a business stops being a business and becomes a charity? Why would it even have shareholders at that point? Surely, even someone who hasn’t operated a business can see why revenue should exceed expenses by a couple percent to survive volatility, much less make it worth investing in.
  - blackeyeblitzar 2y ago
    Maybe it should be near 0% for this business because that is the end result of competition and a functioning market. Or maybe they should just become better at operating more efficiently. But what they shouldn’t do is artificially create profit margin by stealing from their customers and handing them death sentences instead of providing the care that is paid for. When you deceive and defraud customers and literally cause them harm when they’ve paid you to avoid harm, that does seem evil. That’s what I’m pointing out.
  - jimbob45 2y ago
    The business model contains dark patterns incentivizing patient deaths in many cases. It’s not that they’re turning a profit, it’s that they’re profiting off of death. If it was a break-even org (I.e. non-profit), people would likely have less of an issue with it.
wahnfrieden 2y ago
The regulations on profit margins incentivized maneuvering to higher prices to increase absolute profit
- lotsofpulp 2y ago
  7+ different publicly listed companies and myriad mutual/non profit companies as well as self insured businesses all colluding to pay more so they can collect higher premiums? And simultaneously, health insurers denying coverage left, right, and center to pay less so they can profit more? (See adjacent comment by blackeyeblitzar) Make it make sense.
  - dengxiaopeng 2y ago
    There’s definitely precedent for public companies (even international ones!) colluding to artificially increase prices in a sector. Also a hilarious movie with Matt Damon. https://en.m.wikipedia.org/wiki/Lysine_price-fixing_conspiracy https://en.m.wikipedia.org/wiki/Lysine_price-fixing_conspira... https://en.m.wikipedia.org/wiki/The_Informant https://en.m.wikipedia.org/wiki/The_Informant!
    - lotsofpulp 2y ago
      Has there ever been precedent for companies to collude to increase the prices they pay their vendors? I’m seeing a lot of big claims, but no evidence.
  - hyeonwho4 2y ago
    My guess, stated without evidence: 1. Profits are capped as a percent of health care expenditures. 2. Employers (and people in the Marketplace) purchase insurance mostly based on price, which incentivizes lower prices. 3. (I'm guessing) Medicare advantage pays a flat annual rate to insurers. 4. Insurer denies large claims on Medicare Advantage accounts, turning annual rate directly to profits. 5. Insurer's denial of claims for other classes of policy lowers the price of the policy, increasing competitiveness. 6. Providers fight with insurance policy and fall back to billing patients, who can only pay pennies on the dollar. 7. The providers raise future rates to compensate for the costs and losses incurred by denials. 7. Increasing prices for all customers yields the desired absolute profits, without penalizing the company doing the denials.

Loughla 2y ago

How do I get a low skill high pay job? That sounds awesome.

JumpCrisscross 2y ago
> How do I get a low skill high pay job Why are you assuming high pay? Claims adjusters make like $50k per year for semi-skilled work.
- Loughla 2y ago
  Where I live that's a pretty good salary.

bobxmax 2y ago

Source? Not denying what you're saying, just curious about the data.

smolder 2y ago
Just personal experience and that of people close to me. Sorry, I have nothing concrete to offer here.