RE: Medical cost Ratio

[Guest guest]

No coincidence that these are the worst payors to docs, thankfully NOT the dominant insurer my area.

Many of employers my area will try one or 2 of these plans, but after 1-2 years of employee complaints they switch out.

Also, with a relative shortage of primary docs my community, many not taking the poorer payor plans----------- 1 large hospital provider will not even see Aetna pts, a real problem when the largest oncology group works for that system.

Matt in Western PA

Medical cost Ratio

Cross post from another list.

Interesting info...kind of suggests how small groups are powerless.

Locke, MDhttps://www.theverdengroup.com/uploaded/Verden%20Report_SE_Cost%20vs%20Profit%20in%20Managed%20Care%20Today.pdf

Medical cost Ratio

Why not? Because of something called Medical Cost Ratios (or MCRs). MCR is simply the percentage of premium money that is spent on reimbursement to providers for rendered health care services. At a time when we have the largest number of uninsured individuals, decreasing MCRs and increasing premiums have combined for record profits to insurers. That is, the profit margin comes not only from increasing premiums, but by lowering the amount MCOs spend on health care. Insurers reduce what they spend by controlling costs in a number of ways. In its finest form, cost-cutting comes about through efficient operations, negotiating better contracts with such high volume service management companies as labs and diagnostics, and actively promoting well care programs to achieve healthier members. Some of this happens, of course, but there is a growing trend across the board to simply cut reimbursement rates to providers and erode their revenues through policy and procedure changes. We believe that the results of such strategies are a major contributor to the ever-growing profits of publicly traded MCOs this year. Below, we examine ratios for four of the five5 largest publicly traded national managed care organizations.

Looking at the three quarters ending September 2007, we can see how MCRs have decreased period to period.

And while the percentage points appear small, the financial impact is mighty.

[Guest guest]

This is a great resource, and I have emailed it to some of my

patients, who complain about the way things are with their insurance.

One of my deep dark secrets (just between you and me) is that in

my misspent youth (from about 1987 – 1996, I worked part-time as an HMO

and PPO medical director. The term at the time was “loss ratios,”

rather than “cost ratios.” I can verify from personal

experience that everything in the PDF has a strong ring of truth. I

battled that kind of thinking every day for 9 years. Micropractice

is much more fun.

don

From:

[mailto: ] On Behalf Of Locke's in

Colorado

Sent: Saturday, January 05, 2008 7:05 AM

To:

Subject: Medical cost Ratio

Cross post from another list.

Interesting info...kind of suggests how small

groups are powerless.

Locke, MD

https://www.theverdengroup.com/uploaded/Verden%20Report_SE_Cost%20vs%20Profit%20in%20Managed%20Care%20Today.pdf

Medical cost Ratio

Why not?

Because of something called Medical Cost Ratios (or MCRs). MCR is simply the

percentage of premium money that is spent on reimbursement to providers for

rendered health care services. At a time when we have the largest number of

uninsured individuals, decreasing MCRs and increasing premiums have combined

for record profits to insurers. That is, the profit margin comes not only from

increasing premiums, but by lowering the amount MCOs spend on health care.

Insurers reduce what they spend by controlling costs in a number of ways. In

its finest form, cost-cutting comes about through efficient operations,

negotiating better contracts with such high volume service management companies

as labs and diagnostics, and actively promoting well care programs to achieve

healthier members. Some of this happens, of course, but there is a growing

trend across the board to simply cut reimbursement rates to providers and erode

their revenues through policy and procedure changes. We believe that the

results of such strategies are a major contributor to the ever-growing profits

of publicly traded MCOs this year. Below, we examine ratios for four of the

five5 largest publicly

traded national managed care organizations.

Looking at

the three quarters ending September 2007, we can see how MCRs have decreased

period to period.

And while

the percentage points appear small, the financial impact is mighty.

[Guest guest]

intersting kelly

I am not signed on with any of these turkeys.

Puts into cold numbers what we already know just from living.

Medical cost Ratio

Cross post from another list.

Interesting info...kind of suggests how small groups are powerless.

Locke, MD

https://www.

<https://www.theverdengroup.com/uploaded/Verden%20Report_SE_Cost%20vs%20

Profit%20in%20Managed%20Care%20Today.pdf>

theverdengroup.com/uploaded/Verden%20Report_SE_Cost%20vs%20Profit%20in%2

0Managed%20Care%20Today.pdf

Medical cost Ratio

Why not? Because of something called Medical Cost Ratios (or MCRs). MCR

is simply the percentage of premium money that is spent on reimbursement

to providers for rendered health care services. At a time when we have

the largest number of uninsured individuals, decreasing MCRs and

increasing premiums have combined for record profits to insurers. That

is, the profit margin comes not only from increasing premiums, but by

lowering the amount MCOs spend on health care. Insurers reduce what they

spend by controlling costs in a number of ways. In its finest form,

cost-cutting comes about through efficient operations, negotiating

better contracts with such high volume service management companies as

labs and diagnostics, and actively promoting well care programs to

achieve healthier members. Some of this happens, of course, but there is

a growing trend across the board to simply cut reimbursement rates to

providers and erode their revenues through policy and procedure changes.

We believe that the results of such strategies are a major contributor

to the ever-growing profits of publicly traded MCOs this year. Below, we

examine ratios for four of the five5 largest publicly traded national

managed care organizations.

Looking at the three quarters ending September 2007, we can see how MCRs

have decreased period to period.

And while the percentage points appear small, the financial impact is

mighty.

[Guest guest]

These huge corporations are basically monopolies that

are never going to go away in our lifetimes and have a

legalized license to steal. Hence they meet one of

the qualities of a great investment.

Aetna with the lowest loss ratio has returned 29% over

the last year or so while the market in general

returned ~7%. The art of medicine is a calling.

Making money in medicine is evidently better done

through investing in insurance companies.

Ben

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[Guest guest]

Good points.

Check out stock price...shoulda bought in 2000 and quintupled my money.

http://finance.yahoo.com/q?s=AET

Locke, MD

-----Original Message-----From: [mailto: ] On Behalf Of Ben BrewerSent: Saturday, January 05, 2008 8:32 PMTo: Subject: RE: Medical cost RatioThese huge corporations are basically monopolies that are never going to go away in our lifetimes and have a legalized license to steal. Hence they meet one of the qualities of a great investment. Aetna with the lowest loss ratio has returned 29% over the last year or so while the market in general returned ~7%. The art of medicine is a calling.Making money in medicine is evidently better done through investing in insurance companies.Ben ____________________________________________________________________________________Be a better friend, newshound, andknow-it-all with Yahoo! Mobile. Try it now. http://mobile.yahoo.com/;_ylt=Ahu06i62sR8HDtDypao8Wcj9tAcJ