Health Insurance

The health insurance industry is a very large and integrated industry in the U.S. economy. Health insurers, sometimes called managed care companies, are often thought of as the gate-keepers to American healthcare. They tend to control what doctors can be seen and how often, how much you will pay, and what the doctors and hospitals will receive. As such, these companies are perhaps the most important aspect of the American healthcare system today.

Health insurers come in various forms and offer diverse products that distinguish themselves from other insurance companies as well as other businesses. It is often said that this is the only business where the consumer (the person receiving the healthcare) has no active role in the decision-making process, and the provider (the doctors or hospitals providing the care) has no say in how much pay they receive for a service. Thus the health insurer has gained control over the “healthcare equation”.

These companies set the pay structure they will grant to providers for specific services, and set the rules for the consumers on how they can use the services provided. It seems to be a great role to be in from an investor standpoint – controlling your destiny is advantageous to controlling your success.