7 ms·
What? They want their bottom line to decrease, not increase. The fastest way to increase their bottom line is to cut costs.
by kylevedder 4y ago
What? They want their bottom line to decrease, not increase. The fastest way to increase their bottom line is to cut costs.
- ben_w 4y agoFrom what I'm seeing, I suspect insurance companies have multiple internal groups, at least one that want to reduce expenses and at least one that wants to increase revenues. Each is motivated independently of the other.
- ericd 4y agoInsurance tends to have maximum profit percentages mandated, at least in the US. I'm not an expert in this, but I assume that this results in a bit of a perverse incentive where the only way to increase your profit is to increase your costs.
- rjtavares 4y agoIf that was the case expenses would never be rejected. The truth is more complicated than that.
- tedunangst 4y agoNo, because their income as capped at the premiums collected. They want to spend 80% on expenses, but not more than that. But they also want projected expenses for next year to go up.
- ahartmetz 4y agoWhy is that so rarely mentioned in discussions of high healthcare costs in the US? It seems like it could explain everything!
- random314 4y agoInsurance can only have a fixed percentage profit mandated by US law. Decreasing the bottomline would literally decrease their profits.