Follow the money. There are huge amounts of money flowing into insurance companies in the forms of premiums, and lesser amounts flowing out in the form of payments. When a sizable portion of our GNP is running through such a conduit, it is easy to make fortunes by denying as many claims as possible and delaying the payment of as many claims as possible. Look at the dynamics (we'll use horribly inadequate tiny numbers to illustrate) - if you have a million dollars a week coming in and are promptly paying $900,000 a week in claims, you are making $100,000 a week to pay your employees, pay for overhead, and provide some type of profit to benefit your stockholders. Perhaps $10,000/week is available for investment, yielding more income. Now, let's assume that you manage to deny/defer $100,000 worth of claims every week, for an average delay of 4 weeks until you give in and pay them (assuming you pay them at all). Now you don't have $10,000/week to bolster investments - you have an accumulating $10,000 per week PLUS a constant revolving float of $400,000. Now multiply this theoretical (minuscule) tiny little insurance company by any appropriate scaling factor and you can see how the denial/deferral of otherwise real authentic payable claims can create a huge rolling slush fund from which the insurance companies or their clients can derive additional income. This is not a secret in hospitals and medical practices. Unfortunately, the public is very poorly informed about this tactic, nor its financial load on the health-care system.
