The Medical Loss Ratio
The history of health care payments, part III
Welcome to The Frontier Psychiatrists. Today’s post is a collab with my friend,
. It’s another banger— when it comes to medical economics. I’ll remind my readers I have a book for their enjoyment on the beach (with a Kindle for the time being): Inessential Pharmacology. (Amazon Affiliate Link).
The Affordable Care Act aimed to restrict health insurance profits by specifying that insurance companies couldn't be greedy. They defined this by mandating that a fixed percentage—usually 80% of the premiums collected—be spent on providing health care.
The idea was to prevent “obscene profits.” The company can keep no more than 20% of premiums collected — that sounds good, right? Only problem? For-profit companies have a fiduciary responsibility to make more money for their shareholders. So the CMO goes to the CFO and says, “Dude, the most we can make is 20¢ per $1 now; the party’s over”. You could save money through preventative ways to keep your patients healthier. Go forth, provide…
 | A guest post by
|