cream skimming
Harvesting top layer
Cream skimming is the practice of selecting only the most profitable customers, cases, or opportunities while avoiding less lucrative ones.
Insurance companies cream skim by favoring healthy applicants; schools may cream skim by enrolling high-performing students.
The term evokes skimming rich cream from milk, leaving the less valuable portion behind.
Also called cherry-picking.
Division into distinct levels
- market segmentationSplitting audiences by shared traits
- coverage gapsUninsured risks in plans
- vulnerable populationsGroups disproportionately susceptible to harm
cherry-picking
Choosing only supporting examples
- adverse selectionPre-contract hidden knowledge problem
profit maximization
Pursuing greatest possible gains
stratification
Division into distinct levels
- market segmentationSplitting audiences by shared traits
- coverage gapsUninsured risks in plans
- vulnerable populationsGroups disproportionately susceptible to harm
cream skimminguniversal service
Guaranteed availability to all
universal coverage · open enrollment · non-discrimination · adverse selection · community service
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