Two assertions without proof here, both of which I find hard to believe. If 2.5% is all grocery stores make, who get the rest of the $4-$5 dollar sticker price on a box of cereal the real cost of which is maybe $0.50 tops?
Well, a box of cereal in my store runs about $2.50, but the short answer here is that grocery stores buy product at whatever they can negotiate, and then market it up very, very little in order to be competitive. Some articles about the industry have shown that the stores make almost zero profit on the food they sell, and depend on the peripheral businesses (wine, beer, flowers, financial services, etc., to make a buck.)
But, more to the point, it’s fairly easy to research this, so you don’t have to believe the political press, who spend most of their time lying through their teeth these days. Morningstar drills deeply into the financial of every publically held company and presents the data in a user friendly format. Look for the “net margin” line under “profitability”.
You can’t lie to the SEC post Enron. They audit your financials and if they catch you, you go to jail. And….I am not sure what your reference means, in that there ARE no oil companies in Alaska; they are all domiciled in Houston, with business operations in Alaska. Nobody in Alaska is calculating the annual returns of any publicly held oil companies.
We can also do the same for some health insurers:
Both those industries are substantially under the US mean and median for profit margins. I provide this particular graphic to show how badly Americans misjudge the profitability of industries:
Also, saying insurers are very, VERY good at eliminating fraud is going way too far. I’ve got relatives who eventually discovered that their insurers had been billed for multiple operations they never had, in places they’d never been, etc., and the insurers never noticed.
You’re mistaking fraud, which usually takes the form of overbilling, for errors, which these situations sound like. At any rate, the health care insurance industry invests millions each year in improving their fraud detection systems AND eliminating errors, because fraud and error eats into those skinny profit margins mentioned above, and their shareholders want their money.
At any rate, fraud remains a problem, but especially in the government programs. The GAO rates Medicare as a “high risk program” vis a vis fraud, for just that reason.
Insurers face a fundamental handicap with respect to fraud prevention: they don’t have full visibility into the treatments a patient has had, so they can’t easily tell what is likely to be fraudulent. A single-payer type system run by the government wouldn’t have this problem.
You’re overly optimistic. A single payer system is just another kind of health insurance. Services are still delivered by the same people they are delivered by today, and claims processing doesn’t change. Fraud will increase, not decrease. You’d be getting rid of the people who are investing in fraud protection, and letting the government, who suck at it, do all the processing.