Health Insurance Case Study

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Recommended: Competition in the health care industry

Past Health Insurance Industry Growth Factors Multiple variables including employment, legal, and advance medicine factors contributed to past growth that the health insurance industry experiences. Employment Post world war II, the chance of attracting talented workers back into the workforce is scarce. Many lives and talents were lost in the war and the unemployment rate skyrocketed. Employers were left to fight over a small pool of talents (“Shift to Employer-Based,” n.d). In order to attract the best workers, employers were pressured to increase wages. Increasing wages will cause an instability in the economy, as demand for goods increases while the supply for workers decreases. If employers increase wages, the cost of goods will increase …show more content…

This strict regulation began in 1939 when employer-sponsored health plan was first introduced and passed into law to increase the United States’ unemployment rate (EBRI, 2002). Government officials who regulate the health insurance industry are state insurance commissioners. Each health insurer must meet their state’s various requirements in order to receive an operating license. Each state also has the flexibility to design and implement its own insurance coverage within federal guidelines. Several state regulations that the government has been monitoring and will continue to regulate to make sure health insurance are in compliance are HIPPA, payment models, taxation, employee compensation plans, employee welfare, health care quality and …show more content…

These suppliers have low bargaining powers because of the price sensitivity competition to get on health insurance companies provider list and formulary (Groat, 2007). Health insurance companies are the middle men to suppliers and patients and have the ability to negotiate costs that are profitable but yet affordable to both suppliers and patients. Currently health insurance organizations heavily rely on their supplier for business and operation to distinguish themselves from their competitors. For example, over the course of a year, UHG have acquired catamaran and collaborated with Walgreens to enhance their Optum RX division and pharmacy

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