A year of computer snafus boiled over Oct. 13 when the St. Francis hospital system declared WellPoint Inc. in breach of its contract because of habitually late payments.
Those computer problems already have helped to wipe out the Indianapolis-based health insurer’s expected profit growth for the year. And some analysts fear WellPoint will continue to lose customers and market share until the end of 2009.
“These companies pay claims,” Dave Shove, a health insurance analyst at BMO Capital Markets in New York, said regarding health insurance companies. “If you don’t get this right, everything else falls apart.”
Read the whole thing. It has all the signs of an imploding business model, failure to pay claims, failure to merge systems, shareholder lawsuit. Clearly Wellpoint is collapsing, and its Board of Directors knows it. Collapsing insurance companies are just one reason we need Medicare for All.
Wellpoint is an especially needy parasite, it could use more than one adopter, won't you consider adopting a parasite?
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Unstated issues
Of course it's likely Wellpoint's CEO is still extremely well paid (probably getting a bonus), and even if fired probably has a golden parachute.
But beyond Wellpoint - JWM Neurology mentioned in the article: you have to wonder what kind of profit margins they're running if they can withstand something like a third of their patients paying late/underpaying/not paying at all, taking a 5% to 10% hit on their cashflow, paying 22 neurologists plus staff, malpractice premiums, overhead, and only might have to make an extra draw on their credit line. Same with all of the other providers whose payments have been so severely delayed.
Not to defend Wellpoint, or any other insurer. The length of time insurers delay payment even under normal conditions adds a lot of expense for providers in maintaining cashflow/working capital, and consequently contributes to higher health care costs.
every paycheck they get a shitload of cash,
and most employees don't need or use expensive care--it's only a small portion of them that use up the resources, and Wellpoint and all the others have a steady and reliable stream of cash coming in all of the time no matter what.
(it's the same with Mutual Fund companies--every paycheck they get tons of cash.)
valid point
The providers certainly bear some responsibility for our health neglect system. However, most of those issues would be swiftly addressed by a single payer system, which is why until very recently most providers opposed single payer.