Wednesday, December 16, 2009

Bean Counters Look at Only Half the Story

We often ask why Medicaid and insurance companies don't see the full results of their actions? Why do they NOT understand that their procedures and policies when it comes to childbirth, produces less healthy babies and cost them much more money in the long run?

A recent article about the single-mindedness of airline accountants has cost the airlines millions, yet they think they are actually making money. We are talking about baggage fees. A few years ago, the airlines (with the exception of Southwest and JetBlue) started charging for checking in. even one bag.

For the second quarter of 2009, this amounted to almost $670 million in baggage fee revenue. The bean counters were jubilant! Look how much money we've brought in, just from charging baggage fees.

Of course, the bean counters had no way of calculating how many passengers chose. NOT to fly the airlines that charged baggage fees. Second quarter revenue dropped by almost $130 billion. Those airlines that do not charge baggage fees suffered losses that were less than half of what the baggage fee charging airlines suffered. (Not to mention how hard it is to get back a customer that has left you for the competition)

(Click here to read article).

Very often when looking for solutions to improve birth, the bean counters, as well as the birth advocates view only one side of the financial equation. It is important to look at all sides when making decisions.


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