What to the above have in common?
They are all commodities. A commodity is anything for which there is a demand or has value to someone.One of the characteristics of a commodity is that its price is determined as a function of its market.
Individuals who have Medicare are a value to HMO's. Government pays managed care several hundred dollars each month per beneficiary. The amount is calculated and varies to the geographic location to where the beneficiary lives, medical conditions, age and other criteria, but may be as high as $600-$700 a month. This means that each month Government pays a managed care HMO this amount, per person in exchange for the managed care providing all needed medical care for the individual. If patients are healthy, its profit for the managed care. For an HMO to have some degree of assurance and certainty that it will make a profit, the better it is to have many members and even better still to have members who are healthy or have minimal health problems. Even then, HMO's have something called catastrophic coverage which they are responsible for paying out up to a certain predetermined amount for each individual and then Medicare covers the rest, providing a safety net or cushion if you will for the managed care organization. Therefore as I stated, our grandparents and elderly neighbors are in some respects like o.j., gold, cattle and pigs. Who knew?