Should health insurance companies be not-for-profit or for-profit entities? The theory is that profit increases competition, innovation and is generally beneficial to the general good. This idea certainly makes sense for computers and cars. In those industries risk and innovation result in benefits to the consumer and reward the stock holder. General Motors is a perfect example of what happens when, in a competitive industry, there is a lack of innovation.
Health insurance companies have no interest in innovation and risk. This is why they attempt to insure the healthy. Medicine, by contrast, has an interest in innovation and new therapies. As a result, the entities that fund medicine are at odds with medicine, because innovation often increases cost, at least in the short run. Today 23 cents of every insurance premium dollar represents profits and the cost of advertising. It has nothing to do with patient care. This is why the health insurance carriers are so opposed to a public option. Once the 23% profit margin is removed, the public option could provide the exact same benefits for twenty-three percent less without reducing care or doctor compensation. Michael J. Quinn, Esq.
