Carol, I am unclear how the "revenues" here should be figured. I can't see how one could count the employee salaries as revenues, since Myriad doesn't appear to pay the salaries. Far as I can tell, never touches them.
I can see how they make a profit, but not how the profit margin could be very large. FICA, income taxes, workman's comp... aren't those the same amounts, no matter what the size of your company? How could Myriad justify charging, say, a 10 percent markup on FICA payments?
With 401(k) payments and insurance, yes, I could see some margin on getting group rates. But not a huge one, especially once the bulk of the revenues (i.e., taxes) are taken into account.
Myriad's business, at least the profitable parts, is not unique. Businesses have been setting up dummy "groups" for a long time. I talked to the head of one of them, I believe they went by the name "American Consumers Union", about 10 years ago. It was an independent insurance agent that served as a clearinghouse for individuals seeking group rates. They set up the "union" in case the gov't mandated that those seeking group health rates actually belonged to a group. |
