Comments on y-intercept blog: Is Health Care a Natural Monopoly?

Taking on more customers would only reduce average...

2009-12-12T16:26:30.278-07:00

Taking on more customers would only reduce average costs if the new customers have a lower average cost than existing customers.

Insurance companies don't live to reduce costs, they live to give their shareholders high guaranteed profits.

As such, insurance companies seek monopoly status as they feel it would give them the power needed to create sustained high profits.

I think that when I hear the term "natural monopol...

2009-12-01T16:28:35.195-07:00

I think that when I hear the term "natural monopoly" I consider the avergae-dost model of economies of scale. I believe an insurance company's success depends on keeping its average costs down, which can be achieved by adding more and more premium-payers to the income stream: the more payers, the lower the average costs (generally caused by relatively view chronically sick individuals).
Thoughts on my thoughts?--Charmcoach

But it's so much easier to keep customers with the...

2009-11-04T20:18:46.035-07:00

But it's so much easier to keep customers with the command and control model.