A cost center literally puts a stop to how much you can spend, it doesn't have the flexibility of a profit center.
It's a very different world where it's possible (for some) to get the latest treatment because it exist vs. a world were it doesn't because there isn't money for it.
I am no fan of private insurers but it's very different.
Edit: Not sure why this comment warrant a downvote. Anyone care to elaborate?
I'd also like to propose a thought exercise for you. Imagine a private insurer. They have, say, 50K clients. They make a couple million dollars a year in profit and make many millions of dollars in medical payments. Next year they double in size, which reduces their risk of failure and improves profit margin slightly. The better profit margin allows them to reduce costs a bit to attract more new clients. The next year they do the same, and the year after. Then they start merging with other insurers while continuing to grow. All along, as their client base grows, they improve profitability (and/or reduce costs) and their business becomes less risky.
Suppose eventually all Americans use this one enormous insurance company. They have the power to negotiate the best rates with doctors, drug companies, hospitals, etc. They have such a large client base that there is no risk, just extremely predictable income and expense. They can get costs as low as the medical industry will allow because they have such a large base.
Now suppose that this one enormous company is simply a part of the federal government. What changes to make single payer not work when it was working just fine before the words "federal government" were introduced?
its uncommon to say an entire organization is a cost/profit center; instead you would say x department is a cost/profit center.
FWIW, i believe most insurance companies make their money from investing the insurance premiums - i would say within an insurance company the finance department is likely the profit center, and whichever department handles payouts to healthcare providers would be seen as a cost center for the org.
oh it may be worth adding- most major US insurance companies are run as non-profit organizations.
Another way to put it is that companies have both cost and profit centers, public healthcare systems like the one in Denmark only have a cost center.
I am not sure what this seems so controversial.
This IS the big difference between a system which is purely run by tax money and don't take any revenue and then one which do.
Every dollar a private insurer makes (or invests) is a dollar they didn't spend on care for their clients. If you assume that insurers have, say, a 5 percent margin, the fastest way to cut the cost of care by 5% is to eliminate the profit.
You are getting way to hung up on the internal details of how it works.
Insurance companies are one part of the healthcare package. There is a reason it's a business which can do well or not so well.
Thats very different than a public healthcare system where EVERYTHING is budgeted.
I also don't know why you think private corporations are excluded from having budgets. I assure you that Aetna and Kaiser and all the other insurers have budgets for the medical care that they pay for. They cannot print money to pay the bills. All they can do is raise rates or provide less coverage. On the other hand, the government can print money if they need to.
We are talking about a healthcare system like the US version and comparing it to the Danish version.
The funding of those two systems are very different. The US healthcare system is run as a business with profits.
There is no such thing as profits in a public healthcare system like the danish and so everything is a cost.
In the US system thats not the case.
I frankly don't know why this is such a controversial discussion.