At 08:27 AM 12/8/97 -0800, you wrote:
>I think that even if they could measure output, they wouldn't care about
>it. What they care about is total revenue minus total cost (or stated as a
>rate of return). Because HMO revenues are largely fixed per patient once
>the deal has been struck, they try to profit by cutting costs.
Actually, there are two sources of profits for HMOs: cutting costs and
avoiding covering people who are likely to be/get sick. In general, the
best way for an HMO to boost its profits is to cream-skim healthy folks
(which is a pretty mixed metaphor).
This is also true, incidentally, of banks, who tend to make money on only a
very small portion of their checking account clients. These are yet two of
many examples of why the unrelenting chorus of "let's have more competition
and we'll all do better" is such bullshit.
Anders Schneiderman
P.S. From Sunday's Washington Post, from an article on corporations
encouraging their employees to take short mid-day naps: "'Our research
shows that naps can be a countermeasure to fatigue.'" In constrast,
staying up all night was found to correspond with increasing fatigue...
