Wednesday, August 19, 2009

The Health Insurance Industry: A Growing Parasite on the National Economy

Health insurance industry employment outpaces health providers and all-industry growth rates.

Ross Eisenbrey of the Economic Policy Institute think tank comments,
Economist Paul Krugman and many others have suggested that the health insurance industry has a lot to do with the excessive cost of U.S. health care. As Krugman describes the industry, an important part of its business model is collecting premiums while denying deserving claims and seeking out reasons to exclude patients from coverage they need. It takes a lot of extra employees to do this socially questionable work, and the industry's employment has grown like a weed over the past 10 years.

From August 1997 to August 2007, employment in the health insurance industry grew an astounding 52%, from 293,000 to 444,000.1 During the same period, employment among physicians, nurses, and others who provide health services or work to support them grew half as fast, by 26%, from 10,387,000 to 13,042,000. Employment in the economy as a whole grew even more slowly, by only 12% over the same 10-year period (see figure). The ratio of health insurance industry employees to health service providers grew from 28 insurance employees per 1,000 provider employers, to 34 per 1,000.
Is this not another dot which needs to be connected?


  1. Everything I hear and read about the insurance industry and the need for reform just makes me very very sad. I was mad, then furious, now I'm just very sad.

    I think we are an nation of the insane. I have a mental illness, but I an not insane.

  2. And they talk about how disreputable used car salesmen are---I'd take a used car salesman over a health insurance exec or underwriter ANY day of the week! Health insurance has become just a big rip-off and an industry with virtually no morals or ethics. Close the bastards all down---I'll take my medicine "socialized", thank you!

  3. The U.S. ranks 4th in GDP, yet it is 92nd in distribution of wealth-UN measurement. In other words the top 5% live the best of all nations, and the bottom 25% live worse than in countries such as Greece. This disparity explains why the U.S. with the most expensive medical system is counted as 37th as to quality of care by the World Health Organization. Instead of addressing this disparity, both parties have been handing out tax breaks to the top 5% and corporations. Without election-founding reform, we can expect this trend to continue.

    WAKE UP AMERICAN PEOPLE-the politicians are serving BIG BUSINESS!

  4. I'm with you, Boris. Great comment! And thanks for this interesting ifo, Vigil!

  5. We're not insane; there are just a number of us who are painfully stupid. And the Rushpubliscums manage to whip them up, over and over again.

  6. Parasite, and friend (with benefits) to politicians like Kent Conrad and Roy Blunt.

  7. "The issue here is not that drug and insurance companies, hospitals, physicians, lawyers, and government officials are all evil, or that a single part of the system is a bit out of joint or in need of straightening. On the contrary, even if ALL the players were honest and reasonable, and we could share up some of the shaky foundation, American healthcare would still be a mess. It is the structure that is dysfunctional - not the individuals or organizations involved. Everything is out of whack." Dr. Ezekial Emanuel "Healthcare, Guaranteed"