Study reveals UnitedHealth's profit margins four times what it claimed [pdf]

And you're wanting someone else to go demonstrate to you that the single entity that is both 1) largest health insurer and 2) largest health provider in the country has significant market power?

I'll assume that this is legitimate ignorance and not a bad faith attempt to muddy conversation, and I'll direct you to a few resources where you can read several years of extensive investigative reporting on the myriad ways the pay-vider structure enables acquisition and exploitation of market power:

https://www.economicliberties.us/data-tools/unitedhealth-gro...

https://www.statnews.com/unitedhealth-group-investigation-he...

https://www.wsj.com/us-news/unitedhealth-medicare-fraud-inve...

https://www.wsj.com/health/healthcare/medicare-health-insura...

https://publicintegrity.org/topics/health/federal-programs/m...

You can also read the public filings of the payviders to read them bragging about their use of these techniques.

Here's direct reporting on the concentration itself: https://www.ama-assn.org/press-center/ama-press-releases/ama...

1. Certain government contracts are what are called "cost plus" contracts. These have the same flaw. If the contractor earns 20% above "costs", they're incentivized for a cost blowout. Same with insurance premiums. If you have $100B in premiums, then $20B doesn't have to be spent on healthcare. But if premiums were $1T, then that same ratio is $200B. It incentivizes insurers to raise premiums; and

2. Health insurers cheat on the ratio by moving profits elsewhere. For example, UHC has a pharamaceutical benefits manager ("PBM"). Sounds inocuous but it's evil. PBMs bulk negotiate with drug suppliers but can basically keep the volume discount as an extra profit. PBMs do much more such as constantly force what medications are covered to force people to ssee providers even and get a prescription for whatever the new medication is even if they're stable on current medications. The whole point is to make people give up (or die).

But health insurance companies also own providers like hospitals and medical providers, either directly or through thinlyhh veiled subsidiaries meant to hide profits and that corporations are making healthcare decisions (something certain states have laws against).

The whole thing is a ridiculous system and needs to be scrapped.

[1]: https://www.cms.gov/marketplace/private-health-insurance/med...

We have a set of accounting rules that apply to firms who are middlemen with clearly distinct transactions with both their suppliers and customers. We have another set of accounting rules that apply to firms who act as a third party agent in a transaction.

Whenever you have such a classification, you are always going to have a gray area in between, firms where a judgement has to be made on which set of rules to apply.

Your unemployment example is great: we have 6 different definitions of unemployment, U1 through U6. Different ones should be used in different situations. And there are grey areas between the classifications -- are you a "discouraged worker" (u4) or "marginally attached worker" (u5)?

The "Insurance Style" View (If they copied UHG's model): If an investment fund counts your $1000 deposit as their own revenue and treats buying stocks for you as their own cost, they made $50 on $1150 of sales and have a 4.3% profit margin.

The distinction is that the insurance company is not selling you medical services; those are covered by your and other clients' own money. They are selling the service of managing a central fund to reduce risk for the people who are part of it. For them to claim that you were paying them for medical services, they shouldn't just be covering the hospital bills—they should be operating the hospital and buying and selling the drugs themselves. It might feel like they do that, but this is actually done by the healthcare providers and pharmacies, with the costs merely covered by the insurance fund.

Grocery-Bagging Analogy: Imagine you pay a teenager $10 an hour to help bag customers' groceries. In that hour, $2000 worth of groceries get bagged, and your business takes a $100 fee from the store for the service. After paying the teenager, you pocket $90.Do you claim a 90% profit margin on your $100 service fee? Or do you claim that your "costs" were $2010 because you included the value of the customers' groceries, pretending your margin was a measly 4.3% while walking away with almost all the fee?