Insurers' Maximum Sustainable Benefit For Profits of 5% () are the highest portion of a premium dollar insurers can pay, throughout the year, and match 's probability (0.8413) of profits of at least 5%. To adjust for differences in PLRE variability, = 0.8000 - 1 * because PLREs above 0.8000 do not yield these profits. Table 1 Row 11, shows = 0.79715 and = 0.78419. and can pay higher benefits than (0.7500), but = 0.6419 and = 0.3000. must cut 's benefits by 60% because it is so inefficient.
Table 1 Row 12 shows dollar values of average policyholder benefits ( * $4,000). , , , and can provide average benefits of: $3,189; $3,137; $3,000; $2,568; and $1,200. Contrary to capitation advocates' claims, these are reduced benefits, cuts in medically necessary and appropriate care due to providers' inefficient insurance operations, not capitation induced savings from increased clinical efficiency.