Cost of Health Care Continues to Rise

[d-ray657]

Originally Posted by whell

D-Ray - the numbers that I posted were Net Profit numbers for all companies listed. This would be the revenue (from all sources, including interest on funds held for reserves by an insurance company) less expenses. The reserves are the "money moving around" part of an insurance company's portfolio: the cash on hand that a carrier needs to maintain to cover anticipated claims expenses. This money is kept invested as you've suggested, and does create it's own revenue stream. However, the net profit figures include this revenue, less expenses.

Just so I understand it, the revenue will include premiums? We are dealing with a revenue stream, in and out, and the profits are a percentage of the inlet portion of the money stream. Under those circumstances, it seems to me like 3-5% of that revenue stream would represent huge dollars in profit, simply because they are dealing with huge dollar volumes. I see that as qualitatively different than a profit based on the cost in manufacturing a product, where the income would represent sales, rather than a constantly flowing stream of money. Whether you agree with the distinction or not, do you see where I'm coming from?

Regards,

D-Ray

[BlueStreak]

Originally Posted by d-ray657

Just so I understand it, the revenue will include premiums? We are dealing with a revenue stream, in and out, and the profits are a percentage of the inlet portion of the money stream. Under those circumstances, it seems to me like 3-5% of that revenue stream would represent huge dollars in profit, simply because they are dealing with huge dollar volumes. I see that as qualitatively different than a profit based on the cost in manufacturing a product, where the income would represent sales, rather than a constantly flowing stream of money. Whether you agree with the distinction or not, do you see where I'm coming from?

Regards,

D-Ray

How do the chickens fit in the revenue stream? How do you quantify the value of a chicken so as to include it into the net profit percentage figure?

It is vital to overall operations to get this out on the table and into a nutshell so we can put it to bed. Anyone who isn't on board with this crucial initiative is invited to explore employment opportunities elsewhere. Negativity based reverse enthusiasm will not be tolerated.

It's tee off time. If you have any questions call my cell, my assistant will get back to you within a few days to set up an appointment so we can schedule a meeting. I'm booked solid through February and after that the only good time for me is wednesday between 3:15 and 3:17 a.m., until after Memorial Day. Then I'm wide open. But, I'm sure I will have found an excuse to fire you by then.

Regards,
Dave
Senior Undersecretary to the Executive Sub-Director in Charge of Monitoring the Existential Committee on Poultry/ Healthcare cost/revenue ratios and "Who keeps smearing feces on the executive washroom mirror?" investigations.

[whell]

Originally Posted by BlueStreak

So, I take it that chicken bartering is not the answer?

Dave

LOL!

[merrylander]

Ah so, it is medicare that caused the price of lotrel (Novartis BP drug) to rise in excess of 10% per year, glad to have that all explained and here I thought it was simple greed. You learn summat every day.

[noonereal]

Originally Posted by merrylander

Ah so, it is medicare that caused the price of lotrel (Novartis BP drug) to rise in excess of 10% per year, glad to have that all explained and here I thought it was simple greed. You learn summat every day.

I like how the pharmaceuticals come out with a new drug, then when it's patten expires they do the same drug in time release and when that patent runs out they combine that drug with another common drug in one tablet and patent it again! Meantime the more effective drug whose patent has long since expired is off the market completely!

And the worse part of all this? Knuckleheads who are victimized by this clamor about there profits being their rights.
Clue: You will never get to that level of wealth so stop supporting things that you hope "one" day might benefit you.

How was this for an early morning post?

Rather caustic and cynical?

thanks

[Grumpy]

Originally Posted by noonereal

I like how the pharmaceuticals come out with a new drug, then when it's patten expires they do the same drug in time release and when that patent runs out they combine that drug with another common drug in one tablet and patent it again! Meantime the more effective drug whose patent has long since expired is off the market completely!

And the worse part of all this? Knuckleheads who are victimized by this clamor about there profits being their rights.
Clue: You will never get to that level of wealth so stop supporting things that you hope "one" day might benefit you.

How was this for an early morning post?

Rather caustic and cynical?

thanks

I would say its a pretty good one for the morning. And spot on..

[whell]

Originally Posted by d-ray657

Just so I understand it, the revenue will include premiums? We are dealing with a revenue stream, in and out, and the profits are a percentage of the inlet portion of the money stream. Under those circumstances, it seems to me like 3-5% of that revenue stream would represent huge dollars in profit, simply because they are dealing with huge dollar volumes. I see that as qualitatively different than a profit based on the cost in manufacturing a product, where the income would represent sales, rather than a constantly flowing stream of money. Whether you agree with the distinction or not, do you see where I'm coming from?

Regards,

D-Ray

No, not really. With insurance there is revenue (inflow) from premium, a very large "inventory cost" if you will with reserves which must be maintained, and large accounts payable. Reserves reduce the "flow" significantly - they can create a small revenue steam but must remain quite liquid. Maybe I'm not reading you right.

[d-ray657]

Originally Posted by whell

No, not really. With insurance there is revenue (inflow) from premium, a very large "inventory cost" if you will with reserves which must be maintained, and large accounts payable. Reserves reduce the "flow" significantly - they can create a small revenue steam but must remain quite liquid. Maybe I'm not reading you right.

This "inventory," rather than costing money while it is sitting there, is creating revenue. I still think there is a qualitative difference in the profit percentage of an insurance company as compared to the profit percentage of a business that creates products.

Regards,

D-Ray

[noonereal]

Originally Posted by whell

No, not really.

why did I know he would not?

[whell]

Originally Posted by d-ray657

This "inventory," rather than costing money while it is sitting there, is creating revenue. I still think there is a qualitative difference in the profit percentage of an insurance company as compared to the profit percentage of a business that creates products.

Regards,

D-Ray

The "inventory" - or reserves - are making some money. But due to the requirement to invest these funds conservatively, the spin off doesn't contribute to huge profit margins. For example, if the average margin, as previously quoted, is 6%, with revenue from assets invested included, that margin is still less than other industries that have low or no inventory costs.