Report Details Health Care Sector Profit Margins

According to a report from America's Health Insurance Plans (AHIP), the health plan industry has an average profit margin of only 4.4% and is not a primary driver of rising health costs. The report ranks profit margins throughout the health care sector and the health plan industry ranks 12th out of 16--behind major drug manufacturers (with the highest profit margins at 15.4%), medical instruments and supplies (13.9%), and other drug manufacturers (13.6%). Recognizing that rising health costs pose a major issue to the sustainability of the health system,  health plans and organizations like America's Health Insurance Plans have begun to focus on cost-saving and value-maximizing efforts such as targeting patients for preventive care, expanding medical homes, supporting the use of health information technology, and adjusting incentives.