The Business of Healthcare

By 2025, healthcare spending will account for 25% of GDP in the United States. That’s big business. And recent health care reform laws enacted under President Obama will most likely expedite this trend, at least in the short term (just look at the massive lobbying that the industry is currently engaged in with state level exchanges).

Here’s an useful graphic that explores the business side of healthcare:

The Business of Healthcare
Image compliments of Best Healthcare MBA

60% of all bankruptcies are health related. And yet 3/4 of the people who go bankrupt for health reasons had insurance. So insurance is failing at precisely what it was designed to help with: catastrophe (you do know that insurance doesn’t exist to pay for your annual checkup at the doctor, right?)

It is estimated that 1/3 of all healthcare spending is wasteful. And $210 billion is spent on redundant procedures motivated by fear of liability.

During the height of the economic downturn, there was a 56% increase in insurance company profits while close to 3 million people could no longer afford coverage.

It’s no wonder that investment companies like Berkshire Hathaway enjoy significant holdings in insurance companies.

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