Quote:
Originally Posted by aceventura3
Just as a simplistic illustration, Cigna has about 300,000 employees, and they have other operating expense (overhead) of about $3.9 billion - that means their overhead expense is about $130,466 per employee. So that includes salary, benefits, supplies, space, etc. everything needed to serve their customers per employee. Let's assume government can do it for half of that or $65,233 per employee. How does the government do that trick????
Do they use low wage employees, reducing professionalism and hurting service?
Do they rent cheap office space?
Do they buy pens at volume discounts?
Or, is the thought that government can pull that trick off bullshit?
Assume the government can do it. How is Cigna going to compete. Are they going to fire highly paid employees? Are they going to be able to match the fact that the government pays no income tax? Are they going to go from being profitable to losing money? How long will that last? Will they cut services? will they go out of business?
What??? Think it through for me, and give me your conclusion of what happens with the public option.
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We are not talking about some hypothetical world where overhead costs "could" be lower. We are talking about an actual world where everyone else's overhead costs ARE lower. Even the private insurers in other nations do not come close to the 31% average of American companies.
The four main components of overhead in American companies are marketing, underwriting, corporate services and dealing with claim eligibility in a system with so many different plans and options. A simple payer system has lower overhead in all these areas. Since that is not in the cards for the US, a public option can significantly improve on costs at least as related to marketing and corporate services.
And all of this without even touching on the issue of whether you are actually reading the reports right, as Jazz seems a lot more qualified to do that than I am.