Seriously...

Isn't that the answer?

I get that most of the seasoned founders, CEO's, and other executives that run and found health insurance companies know how to maximize their profits, how to spend more profit on bonuses rather than on claims, and how to pass on expenses, marketing campaigns, and legal liabilities onto the sick in the form of premiums.

But surely there are good people out there. People that never even thought about founding such a venture. After all, why attempt it? The industry is monopolized by a few large conglomerates. Cutting into their market share will surely be difficult, let alone possible.

But why not? Let's explore this...

I want to found a health insurance company.

Let's pretend for a sec I have the startup cash and some substantial venture capital that loves the idea. One that is embedded in some basic immovable principles. Take this trip with me:

1. As CEO, there's a ceiling to how much money will make me happy. I don't need to make more and more and more every year. I'll hit a point where I'm good, where any future increases really will become overkill.
   
2. I don't want shareholders; at least not ones that expect alot of money back. I want backers that are content with a modest return, and a pat on the back knowing that they're part of a revolution; ones that will find other ways to profit on their affiliation with a revolutionary and NEW healthcare system.
   
3. Since I'm building it from scratch (I have a technology and business process engineering background), all IT systems will be integrated, forms will be electronic, minimal, and efficient, and the BARE MINIMUM number of people needed at any given time in the company's growth lifecycle will be hired, keeping employee expense and headcount low, but compensated above standard rates in order to promote retention.
   
4. A corporate culture would be established that promotes Customer Services, Client Wellness, and internal efficiency. This, along with excellent pay, would ensure that employees felt ownership for the company, the cause, and the mission statement.
   
5. There would be strict, transparent protocol governing the changing of rates and premiums. This company would be the Southwest Airlines of health insurance, offering the lowest premiums in the industry bar none.
   
6. Profits would not be the sole, or most important driver. The company will operate under the premise of keeping the lights on, expanding as needed ONLY to accommodate growing client base and not to accommodate outrageous bonuses. Simplistically put, there should be enough money to keep the lights on, some for a rainy day, and that's it. Lean and mean.
   
7. The primary goal of the company will be to pay claims and make sure that no one goes broke because they're sick. This company will "help" not deny or hurt. Obviously, there will have to be protocol for fraud, but the tie will go to the runner. The company will have a propensity to error on the side of health and life.
   
8. The company will do away with the "Deductible." This is a con. It is outrageous to collect monthly payments from people for coverage, but then tell them that those payment EARN THEM THE RIGHT to pay the first $1,000 of expenses when services are required. Customer's will pay a premium every month, and they will be covered at a very low rate.
   
9. As mentioned, premiums will be extremely low. But the company will further leverage risk by providing people of healthy habits with discounts. IF you don't smoke, you will pay less. If you don't do drugs, you will pay less. There will be a strong focus on preventive care, but not in the way companies are doing it now. Now, they're saying "OK we'll cover preventive care, but your premiums are going up and so is your deductible." BS!!! You get standard coverage. If you take care of yourself, you will pay less. Period.
   

These are just some of the guiding principles that come to my mind. Now, the cynicism aside (e.g. "ohhh it's impossible to break into that market." "The insurance companies would never let that happen." "You don't know what your doing, your just talking silly," etc), is this possible? Can this be done? Can such a company be started to compete with the monopoly that currently exists? Is it possible to run a company with such principles, provide this intermediary duty that insurance companies provide, and do its part to advocate for the sick? If not, why not? If so, how could this get done? Wouldn't such a company quickly steal market share if it truly managed to be that cheap and provide service with much more integrity?

Forget the "Public Option." I'm for it, but the government is in the pocket of the current insurance establishment.

Can some motivated, relatively well-funded citizens upstart a legit competitor and change the game? Your thoughts?


[edit on 17-10-2009 by tommy_boy]

This is a very good paper napkin plan. The devil is in the details, of course, but it's a great start. I have seen something similar here in Texas with Simple Energy. They are a bare bones electric company with an incredibly simple web site. Since they are really just billing for usage provided by Oncor (the electricity provider), they don't have much else to do. The result is they charge the lowest rates I have ever seen. It would be easy for them to add all sorts of bells and whistles, but they don't and it keeps it cheap and easy.

As for insurance, the details would include things such as having sales reps that go to the doctor's offices to get then to sign up to accept the insurance. In addition, you would need to figure out the negotiated rates between what they would normally charge and what you will pay them, etc.

I like the idea of discounts, too. No deductable and no copay/coinsurance, but a nice discount based on the number of claims in a year, etc.

This could work, but would take a while to get established. and a pretty sizable chunk of startup funds.

Originally posted by tommy_boy


Can some motivated, relatively well-funded citizens upstart a legit competitor and change the game? Your thoughts?


[edit on 17-10-2009 by tommy_boy]

tommy_boy,


A star for you. I fully commend you on your thoughtful ideas about this and I'd do the exact same thing that you are thinking of. Good thinking!


But, the reality is, as you asked, can this idea work? In one big word: NO!


You have to be licensed by the gov't to even be able to set up such an insurance company and, given the innovative, democratic ideas that you have, there's no way in hell that you'd have a snowball's chance in hell to set up such an insurance company.


That is why it is critical to NEVER allow government to set up licensing procedures -- it is through this damn mechanism that they are able to keep the good-minded competitors out of the game and only to allow selfish, greedy bastards to run the game.


The game is f***k'd.

I'm with ya! I want to start up a bank. Get people into houses that they can actually pay off by making the mortgage rates lower and not offering any credit cards or any other outrageous loans, basically just doing mortgage finance and holding onto people's money and keeping it safe really safe not like actual banks. Too bad I don't have the capital.

[edit on 17-10-2009 by ldyserenity]

Originally posted by tommy_boy
T
Now all we gotta do is figure out how to do it

Let's face it: There's plenty of wealth to be gained as a health insurer, but tempering the greed also means we can take care of people and still make a buck.

What do you think?

What I think, tommy_boy, is that you are to be commended, again, for your egalitarian thinking. I like how you approach from a win-win standpoint. No matter WTF happens life, don't lose that, ok?


I once had -- and still do have -- such a win-win approach in life, but now, with the sheer level of experience in life as I know it, there's a snowball's chance in hell that anyone, no matter who they are, CANNOT set up any sort of insurance company that could operate on a win/win scenario.


The system is totally jacked and f***d. The good guys lose out; the bad guys win and laugh their asses off to the banks.


The ONLY way that anyone can set up an insurance company along the lines of what tommy_boy has been thinking is to have these two things happen:

1) The total ending of the Federal Reserve, the elimination of the Federal Reserve notes and the replacement of the same with a new monetary system that is not privately-owned; and,

2) The wholesale elimination of the entire system of "laws" that govern the United Slaves of America and replacement of the current color-of-law system of laws with the system of Substantial Laws, the ones that are based on the Organic Constitution and the Common Law. ALL insurance corporation charters exists under the aegis of the color-of-law system that currently governs the United Slaves of America, so, in order to set up an insurance company along the lines of tommy_boy's nice vision, it would have to be set up under the Organic Constitutional Laws/Common Laws -- and those Laws are inactive and completely smothered over by the currently-dominant color-of-law system.


So, if those two conditions happen, then, yes, one can go ahead and set up such an insurance corporation.


And what are the likelihoods of those two conditions happening? Unlikely. I do see the Fed failing completely by the end of this year, but I don't think that the color-of-law system would be eliminated with the Fed. And that sucks.