How do you measure profitability? I’ve assiduously stayed from the health care controversy that has dominated the news headlines in the United States for the last calendar year, since everyone involved with it seems to come out of it looking worse for the wear. However, there is one aspect of the debate that I have found amazing, revolving around how profitable or unprofitable the health treatment business is for insurers, pharmaceutical firms, and hospitals.
Let me be clear up front, though. This is not a post about health care reform but about how far better measure profitability. On one part of the issue, you have proponents of health care reform arguing that health-care companies, generally, and health insurance providers, specifically, make huge earnings.
By extension, in addition they suggest that one of many ways to reduce healthcare costs is to reduce these profits. On the far side of the issue, you have competitors of healthcare reform noting that health care firms really fall in the lower rung of the market in conditions of profitability.
Each aspect uses its own measure of success to make its point. 1. Dollar income: For the surprise value, there is certainly nothing better than dollar revenue. 100 billion in income seems awe inspiring. In ’09 2009, the aggregate amounts (in billions) for publicly traded firms in the health care business were the following.
In terms of dollar profits, pharmaceutical companies deliver much higher profits than other parts of the health care business. 3.5 billion. In …