Your April 24 editorial (“Anthem case should set new health priorities”) is slightly misguided. From a purely business perspective, why shouldn’t Anthem expect to make a profit on all its products? If it doesn’t intend to make a profit on a product, then why sell it? You wouldn’t sell a can of Coca Cola for 25 cents when it cost you 50 cents to put it on the shelf.
Also, Anthem’s expectation of profit doesn’t inherently equate to guaranteed profit. Basically, that is how insurance works. At the end of the year, some plans will over-perform while others under-perform. The risk of a massive claim payment is not unknown. Why is Anthem the enemy for adversely reacting to risk?
It seems as though people have forgotten why the health insurance industry is here in the first place. The first service is to act as an intermediary for payment. Providers trust that insurance companies will pay them their fees eventually. Health insurance also helps when a catastrophic event takes place. A hospital visit could cost upwards of $5,000 depending on what services are determined to be provided.
Health insurance companies raise rates because providers bill them for the services. Those services cost a lot of money. A simple yearly checkup can cost upwards of $200 a visit.
You insist that insurance companies are to blame by saying they should structure payments to providers in a way that encourages people to live healthier lives. It is by no means that simple. People eventually get sick and need to go to a doctor. The price of that doctor’s visit has skyrocketed due to licensing, malpractice insurance, the cost of educating the provider and the level of service consumers expect.
Many perspectives need to change if we are to have real health care reform.
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