Question

A health care insurance company finds that its division in one state is losing money and decides to cut off insurance to that state in order to cut costs. Is this the best decision?

Answer 1

Soln. The decision to cut off the insurance to the state, where the company is loosing money, is not the best decision. There can be several reason for the loss in revenue and company has to investigate and take proper action rather than simply shutting the business off in that state. The issue can be quite temporary, which can occur in any state and in that case, company has to completely shut down the business. So, the idle decision would be to understand the root cause of the loss and then tries to take remedial action to solve it rather than closing the insurance in that particular state. A small, remedial action may make the state most profitable in future.