[OC] How UnitedHealth Group makes money

Posted by sankeyart

17 comments

  2. So.. the question here is how can they invest 265 billion dollars in medical costs while also denying 30% of medical claims? this makes it seem like they just can’t afford to not deny that many claims.

    Edit: changed the figure of medical claim denials, it was complete misinformation. I am ashamed and will now crawl into a hole.

  3. So this is what they say, but it’s not exactly what is found by congressional hearing right? This doesn’t show exactly what their expenses should have been if they didn’t have the highest denial rate in the world.

  4. This really shows how broken the US health system is.

    People blame the Insurance companies – but there isn’t a *huge* profit margin here. They can’t suddenly approve the 20% of claims they deny, because there isn’t the money. It’s broken all the way downstream as well.

  5. “But we only make 8% margin” they cried while clearing $32 **billion** in profit last year.

  6. “Billionaire who says he pays taxes confidently states how much he pays in taxes but is unwilling to show you his tax returns”

  7. This is just United healthcare. If the health care system was “nationalized” and brought under the direction of Medicare/medicaid… That has a proven overhead of about 3% (much much lower than a for-profit insurance company) and no profits… Everything in the green section would then fall into the red section and be distributed as actual care to the nation as opposed to going into the pocket of investors and billionaires. Not only that but the reduced overhead there’d be additional benefits paid out. The fact that we have a for-profit health insurance industry blows my mind.

  8. Would be great to see the “Medical costs” broken down further. How much of this money is looping back to the investors also owning UHG? Seems to me the problem is in the absurdly elevated prices of everything health related in the US. Who’s behind that?

  9. One key thing to remember is that while Net Income goes to shareholders, executive pay comes out of “Cost of products sold”.

  10. This type of analysis doesn’t work for an industry like insurance, or at least it’s wildly misleading. 

    Their industry is literally the cost, providing financial services and literally no other tangible assets. In order to make a profit in a financial sector, you have to cycle through costs. 

  11. Hey, with universal healthcare, there is no profit margin.

  12. Let me get this straight: we’re paying a middle man $400B for them to distribute $264B (smoothing that expense for individuals, i.e. the only point of insurance) while only paying 10% of operating income in taxes.

  13. There should be a, “Net Income from Denying Valid Claims” statement branched under “Net Income”

  14. My interpretation….as a very anti-insurance scheme guy.  

    When you pay $1 into insurance, and you play infinite times, you will lose an average of 14% every time you play.  That’s premiums in, medical costs out:  everything else is extraneous bullshit that doesn’t need to be part of the equation.  As a consumer, every dollar you spend only returns to you, a negative 14% per year.  To put that into perspective, that is worse than playing Roulette with your money. 

    Imagine that you could make 14% annually on your money, by just avoiding insurance altogether and paying cash for your healthcare. 

  16. All I see is it cost 400B dollars to deliver 256B dollars of medical care. That is a terrible efficacy.

  17. For those who don’t get the problem:
    Americans are spending 400B on healthcare and getting only 264B worth of healthcare.

    Even if UHG approves 100% of claims, they would still be a net negative just because of the “operating costs”, “costs of products sold”, etc.

    The whole thing needs to be shut down.

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