Numbers Don’t Lie, Right?
Well, not without a bit of help as Okanogen at Corrente noted in Death by Math.
S/he is a bit prescient as today on All Things Considered they asked the question: Are Insurers’ Profits As Low As They Claim?
The answer is yes and no because the insurance companies used that marvelous symbol, %, to tell their tale of woe. Their claim is that health insurance company profits are only 1% of the cost of health care in the US. That is probably close, but they fail to note that insurance companies only fund approximately 35% of the actual health care that people receive.
The ATC article notes that using the standard methods for determining profits, the difference between income and expenses, the health care insurance companies make profits between 2 and 10%, nor is it explained that in the expenses there are megabuck executive salaries and perquisites, marketing costs, and all of the other things that they spend money on other than paying for actual health care for policy holders. In the corporate world there is no difference between the money spent on a pacemaker, and the annual dues at a country club for the CEO, they are just expenses.
