Profiting from health care

A recent analysis from FactCheck published by The Associated Press and picked up by newspapers and blogs around the country examines the obscene profits of the health care industry and finds them overstated.

The article in question attempts to provide a counter balance to the belief that health insurers are big, greedy corporations by comparing their profits to those of companies like Hershey and Yahoo!. The problem is that the article, presented as an objective look at the other side, ignores an important aspect of the issue itself: morals.

This piece, which has been used by Fox News to excuse private health insurers, puts claims from politicians about health insurer’s profits side by side with the profits of other companies. The article states that health insurers only posted a 2.2 percent profit margin last year. Well, golly, that sure is a tiny little number, especially when compared to Clorox’s 8.7 percent.

Conveniently, larger numbers are left out of the article. Numbers like $833 million—Humana’s net income for 2007. Or $1.3 billion—Kaiser Permanente’s 2006 net income. Those numbers seem pretty obscene to me. I would think that if FactCheck was trying to be objective, it wouldn’t have tried to downplay the very profits in question by converting the numbers to a smaller, friendlier format.

Omitted entirely is the question of whether or not people should be making money off of health care, or even how that money is made. According to George Rede of The Oregonian, the United States is the only developed country that lets insurance companies profit from basic health coverage. This fact suggests that there is some fundamental trait that American companies and policy makers are missing. Or does everyone else just have it wrong?

Yahoo! posting profits from new technologies is a much different story than Humana posting profits from denying people coverage. Cases like that of Peggy Robertson, a woman who was denied coverage by Golden Rule Insurance unless she was sterilized, come to mind. Robertson’s preexisting condition? Having had a cesarean section during the birth of her son. Or a recent survey done by the U.S. Department of Health and Human Services showing that 6 percent of cancer patients lost coverage after being diagnosed.

It is impossible to discuss the health care issue solely as an expression of numbers, and attempting to do so ignores a gigantic part of the problem. The problem is not how obscene health insurer’s profits may or may not be, but that they make a profit at all. Comparing the health care business to the chocolate candy business is just absurd.

Insurance companies’ denying of coverage just further emphasizes the need for a real public option. Those 6 percent of cancer patients who were denied coverage need to have somewhere to go for help. Unfortunately, the plans that are currently being discussed are falling very, very short. Under the current House bill, the plan would only be offered to about 30 million people—15 million short of the total number of those currently uninsured as counted by the U.S. Census Bureau—and not even until 2013, according to current projections.

Our own Oregon Sen. Ron Wyden has tried to insert some helpful ideas into the debate. Sen. Wyden’s plan, known as the Healthy American Act, emphasizes the need for guaranteed, affordable coverage for all while keeping costs down and helping those who cannot afford coverage with subsidies. This seemingly rational plan was deemed too radical by lawmakers who proceeded to pursue a more ineffective plan.

FactCheck needs to consider what an issue actually entails before fact-checking it and refrain from making comparisons between industries in completely different arenas. Skewing the numbers only serves to downplay the negative impact of private insurance and the need for a real insurance plan rather than some joke of a bill that just has “public option” written on it.