Sunday, February 27, 2011

Representative Stark Goes By The Numbers In An Attack On The Heath Insurers

The Disease Management Care Blog can put up with U.S. Representative Pete Stark's unrepentant progressivism. It can tolerate his embarrassing partisan bombast. It forgives him for being so easily baited into trading vulgarities with his constituents. However, the DMCB draws the line on the internet posting of monochrome text with simple raw numbers to attack health insurers. Mr. Stark's latest anti-insurer sucker punch describes "hundreds of millions" and "billions" in health insurer profit.

Last but not least, a maroon colored trim? What was the Congressman's staff thinking?

Everyone knows that compared to Congress' health care spending, hundreds of millions and billions are mere chump change. Mr. Stark's faux sticker shock fails to note that the profits only seem high because of the total amount of money under management, most of which is committed to reserves. He also conveniently fails to note that the health insurers' really have an anemic 3.8% net profit margin. Details on Wellpoint's 3.75% and Humana's 1.28% corporate "criminality" can be found here.

Compared to the profits of health information service providers (19%) and medical device manufacturers (12.5%), the real story is that the insurers are being squeezed by the Feds on one side and the provider system on the other. No wonder the newly centrist Obama Administration felt that Mr. Stark's brand of socialism was too awkward and decided to expand funding for Medicare Advantage.

Fortunately, says the DMCB, these inconvenient health care truths can be overcome by smarter web packaging. The helpful DMCB suggests using long-honored below-the-belt content like anecdotes ("until Mrs. Smith decided to buy health insurance after she got sick....") images of circa 1930's dust bowl children and hyperlinks leading to more information extolling the virtues of the Cuban health care system.

And for crying out loud, more "flash," interactivity and, most of all, colors. What are you trying to do, Mr. Stark.... mimic the boring blue-toned CMS website?


Bradley Dean Stephan said...

Agreed that showing raw numbers is useless, vs. showing margins as a percentage of total revenue. However, we also must ask what went into the expense side of the ledger - that's where the value of a single payer or Medicare-for-all system comes into the fore. E.g., I recall some 'obscene' salaries/bonuses/stock options paid out to United Healthcare honchos over the years. Also, how about the millions poured into marketing? Are these a good spend of our precious, finite healthcare dollar?

Jaan Sidorov said...

Good question. AHIP quotes studies saying that those administrative costs represent a weenie fraction of total health care spending.