FACT CHECK: Health insurer profits not so fat

[shagdrum]

FACT CHECK: Health insurer profits not so fat
By CALVIN WOODWARD, Associated Press Writer Calvin Woodward, Associated Press Writer – Sun Oct 25, 2:34 pm ET

WASHINGTON – Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They're all more profitable than the health insurance industry.

In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making "immoral" and "obscene" returns while "the bodies pile up."

Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would "keep insurance companies honest," says President Barack Obama.

The debate is loaded with intimations that insurers are less than straight, when they are not flatly accused of malfeasance.

They may not have helped their case by commissioning a report that looked primarily at the elements of health care legislation that might drive consumer costs up while ignoring elements aimed at bringing costs down. Few in the debate seem interested in a true balance sheet.

But in pillorying insurers over profits, the critics are on shaky ground. A look at some claims, and the numbers:

THE CLAIMS

_"I'm very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years." House Speaker Nancy Pelosi, D-Calif., who also welcomed the attention being drawn to insurers' "obscene profits."

_"Keeping the status quo may be what the insurance industry wants their premiums have more than doubled in the last decade and their profits have skyrocketed." Maryland Rep. Chris Van Hollen, member of the Democratic leadership.

_"Health insurance companies are willing to let the bodies pile up as long as their profits are safe." A MoveOn.org ad.

THE NUMBERS:

Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better — drugs and medical products and services were both in the top 10.

The railroads brought in a 12.6 percent profit margin. Leading the list: network and other communications equipment, at 20.4 percent.

HealthSpring, the best performer in the health insurance industry, posted 5.4 percent. That's a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach and Molson and Coors beers.

The star among the health insurance companies did, however, nose out Jack in the Box restaurants, which only achieved a 4 percent margin.

UnitedHealth Group, reporting third quarter results last week, saw fortunes improve. It managed a 5 percent profit margin on an 8 percent growth in revenue.

Van Hollen is right that premiums have more than doubled in a decade, according to a Kaiser Family Foundation study that found a 131 percent increase.

But were the Bush years golden ones for health insurers?

Not judging by profit margins, profit growth or returns to shareholders. The industry's overall profits grew only 8.8 percent from 2003 to 2008, and its margins year to year, from 2005 forward, never cracked 8 percent.

The latest annual profit margins of a selection of products, services and industries: Tupperware Brands, 7.5 percent; Yahoo, 5.9 percent; Hershey, 6.1 percent; Clorox, 8.7 percent; Molson Coors Brewing, 8.1 percent; construction and farm machinery, 5 percent; Yum Brands (think KFC, Pizza Hut, Taco Bell), 8.5 percent.

 

[shagdrum]

And some interesting observations from this link:

The average profit margin for health insurers last year clocked in at an anemic 2.2%. What does that mean from the investor position? They would have done better to put their money into FDIC-insured savings accounts at their local bank, let alone a CD or other guaranteed investment device. A 2.2% profit margin would normally trigger a stockholder revolt.

In comparison, trial lawyers showed a profit margin of almost 14%, six times that of the health insurers. Do Democrats scream about villainous trial lawyers and windfall profits taxes on those that exploit the legal system and drive prices up across all American industries? No, because the trial lawyers share a good portion of their filthy lucre with Democrats.

I’m glad the AP finally decided to check facts on Democratic lies about the health-insurance industry. My question to them would be, what took you so long? And to the rest of the media, why haven’t you done any real reporting on this outrageous lie?​

 

[JohnnyBz00LS]

Is health insurers’ profit 2% or 22%?

Your article is a perfect example of distortion and deception using numbers that are not relevant to the industry being discussed. The big difference between “Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo” and the health insurance industry is that those other companies/industries actually produce a tangible product using their OWN capital investment (equipment, facilities). In contrast, the health insurance industry is simply a middle-man exchanging money and taking a cut out for his own “overhead” and profits using CUSTOMER’s capital in the form of premium revenues. Therefore applying a “profit margin” calculation for industries that produce tangible goods to what is essentially a financial services industry can only lead to the false conclusion that “profit margins” are only 2.2%, when in reality they are more like 22%, which puts them firmly at the top of the Fortune 500’s most profitable industries list.

http://pnhp.org/blog/2009/10/26/is-health-insurers-profit-2-or-22/

Is health insurers’ profit 2% or 22%?

Posted by Don McCanne MD on Monday, Oct 26, 2009
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Health insurers’ profits 35th of 53
By Calvin Woodward
The Washington Post
October 26, 2009
Health insurance profit margins typically run about 6 percent, give or take a point or two.
Health insurers posted a 2.2 percent profit margin last year, placing them 35th of 53 industries on the Fortune 500 list. As is typical, other health sectors did much better – drugs and medical products and services were both in the top 10.
Leading the list: network and other communications equipment, at 20.4 percent.
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/26/AR2009102600229.html

And…

Morningstar
October 26, 2009
Health care plans – net profit margin: 3.3%
http://biz.yahoo.com/ic/522.html

And…
American Medical News
August 24, 2009
Medical loss ratios of largest publicly traded health plans:
Average 85.2% (non-weighted, range 82.9% – 86.8%)
http://www.ama-assn.org/amednews/2009/08/24/bisb0824.htm


In simple accounting terms, profit represents the difference between gross revenues and the cost of producing and marketing the products or services sold. So what is the product that the private insurers are selling us? Administrative services.

Unlike most other businesses, the revenues of the private insurers include our own funds that essentially are held in trust for the eventual payment of medical claims – currently 85.2% as represented by their medical loss ratios. Their business costs relate strictly to their product – the administrative services – currently 14.8% of their revenues. Thus their profit margin, to make sense, should be calculated based on their business model of providing us administrative services, but not on the funds held in trust which involve negligible expenses but which provide them with long term investment income. (Profit statements for the notorious financial services industry should also be adjusted accordingly since that is also our money that they are jerking around.)

The 3.3% profit margin reported by Morningstar includes the funds held in trust, but if adjusted to include only all costs of their legitimate business operations of producing and marketing their administrative services then their profit margin is actually 22.3%. That moves them into first place on the Fortune 500 list of profitable firms, in front of the network and communications equipment industry (20.4% profit).

To be realistic, playing with these numbers does not change the fact that eliminating these profits would have only a very small direct impact on our total national health expenditures – saving less than 1% of our health care dollars. What would have a tremendous impact would be to eliminate an industry that has the incentive of a 22% profit margin on a product that is designed to reduce our access to the health care that we need, not to mention a product that places a costly administrative burden on our health care delivery system. Eliminating the private insurance industry could have a huge direct impact on our health care spending – diverting perhaps $4 trillion over the next ten years from administrative waste, and redirecting it to patient care.

We need to take heed of this comment in today’s Los Angeles Times:
“As President Obama’s push for a healthcare overhaul moves toward its final act, the oft-vilified health insurance industry is on the verge of seeing a plan enacted that largely protects its financial interests.”

http://www.latimes.com/business/la-fi-health-insure26-2009oct26,0,11741,full.story

If you had one ounce of intellectual honesty or knew one iota of business economics, you should’ve been able to see through this smokescreen. But you apparently have your head so far up the insurance industry’s behind you can no longer smell the skunk from the crap.

 

[shagdrum]

:blah: :blah: :blah:

so..when a proponent of universal healthcare cherry picks the accounting standards to apply and provides a clever but ultimately specious and misleading argument to justify using those standards, he finds exceedingly high profit margins in the health insurance industry. And we are supposed to view that blatant distortion as credible?

Every industry has certain accounting standards that are appropriate to that industry. Applying a different standard to those numbers would be inappropriate and misleading. But that is exactly what the blog cited is doing. It is taking the actual numbers from the financial statements of the insurance companies (which do use the appropriate accounting standards) and applies different and inappropriate accounting standards to distort the numbers. If the standards he advocates were appropriate to the healthcare industry, those standards would be used in the financial statements of those insurers. It would also be reflected in the FASB standards for the health insurance industry.

 

[JohnnyBz00LS]

To paraphrase the statement used by the right wingers when they are arguing against abortion rights, "Just because it's a "standard" doesn't mean it's appropriate".

 

[shagdrum]

"Just because it's a "standard" doesn't mean it's appropriate".

Then you have to justify the standard you provide in this case. The author in that blog avoided that by misrepresenting the standard used by the insurance companies, in effect creating a straw man that he then attacked and substituted his cherry picked standard for.

"It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place"
-H. L. Mencken

 

[JohnnyBz00LS]

The author in that blog avoided that by misrepresenting the standard used by the insurance companies, in effect creating a straw man that he then attacked and substituted his cherry picked standard for.

Not at all unlike Woodward's cherry-picking of tangible-goods industries to which he compared the health insurance industry. Why didn't he compare it to auto, life or property insurance companies? Woodwards' "analysis" is bogus and you know it.

Additionally, McCanne did not "misrepresent" any standard. He clearly stated that how profit margins ARE calculated do not make any sense and merely suggested HOW THEY SHOULD be calculated. You obviously missed this part that I had bolded just so you could see it:

Thus their profit margin, to make sense, should be calculated based on their business model of providing us administrative services, but not on the funds held in trust which involve negligible expenses but which provide them with long term investment income. (Profit statements for the notorious financial services industry should also be adjusted accordingly since that is also our money that they are jerking around.)

You need to brush up on your "critical reading", son.

 

[shagdrum]

Have to have a villain in the health insurance industry, don't you.

Additionally, McCanne did not "misrepresent" any standard. He clearly stated that how profit margins ARE calculated do not make any sense and merely suggested HOW THEY SHOULD be calculated. You obviously missed this part that I had bolded just so you could see it:

Actually McCanne did misrepresent the standards (and failed to mention that they were in fact institutionalized standards; FASB standards) so he could claim that the standard that FASB gives (and that the providers use) is inappropriate and that his cherry picked standard is more appropriate. Basically, he is dismissing the wisdom and experience that went into the construction and evolution of the unbiased FASB standard so that he can use whatever standard he prefers to get the numbers he wants. Then he is simply making a clever but dishonest argument for rationalizing it.

Unless he can give specific reasons for rejecting the FASB standard (not the straw man misrepresentation of the standards used he gives) he is simply working to substitute his standards and cook the books in favor of his worldview.

You can not simply dismiss the wisdom and experience of generations inherent in the FASB standards in favor of a clever but fallacious and dishonest argument.

 

[JohnnyBz00LS]

Have to have a villain in the health insurance industry, don't you.

Why not? AHIP refers to proponents of health care reform as the "enemy". Screw them.

A top lobbyist for the major private insurance industry trade group, America's Health Insurance Plans (AHIP), urged Congressional Republicans to not even consider helping Democrats pass health care reform lest they aid an "enemy who is down."

Actually :blah: :blah: :blah:

Why don't you stop dodging this question and instead defend the original analysis? Why didn't he compare it to auto, life or property insurance companies? If you can show that health insurance profits are in-line with other insurance industries, the argument might have some credibility. Otherwise, you are left defending a dishonest, misleading "analysis" based on cherry-picked numbers. But then again, that seems to be all that you do around here.

 

[Mick Jagger]

you are... defending a dishonest, misleading "analysis" based on cherry-picked numbers. But then again, that seems to be all that you do around here.

 

[foxpaws]

Otherwise, you are left defending a dishonest, misleading "analysis" based on cherry-picked numbers. But then again, that seems to be all that you do around here.

+1

 

[shagdrum]

Why don't you stop dodging this question and instead defend the original analysis? Why didn't he compare it to auto, life or property insurance companies? If you can show that health insurance profits are in-line with other insurance industries, the argument might have some credibility. Otherwise, you are left defending a dishonest, misleading "analysis" based on cherry-picked numbers. But then again, that seems to be all that you do around here.

Apparently you didn't read the article:

Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.​

Considering the nature of the argument being countered in the article, it would be inappropriate to merely confine the argument to the insurance industry.

Also, that line in the article shows that you are lying and misleading.

It is also rather telling that you are abandoning the argument that the accounting calculations are wrong in the article. It seems you are simply throwing out any argument to rationalize your hatred of health insurers; you are grasping at straws to defend an illogical, emotional view.

 

[hrmwrm]

Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

stated but without correlation. nowhere in the article is an actual comparison to another insurance standard.
nice try at a save, but you still have no arguement.

 

[hrmwrm]

Why don't you stop dodging this question and instead defend the original analysis? Why didn't he compare it to auto, life or property insurance companies? If you can show that health insurance profits are in-line with other insurance industries, the argument might have some credibility. Otherwise, you are left defending a dishonest, misleading "analysis" based on cherry-picked numbers. But then again, that seems to be all that you do around here.

shag got *owned*

 

[shagdrum]

stated but without correlation. nowhere in the article is an actual comparison to another insurance standard.
nice try at a save, but you still have no argument.

The article gives the source of it's information. You can check the comparison yourself, which obviously neither of you have. You are simply interested in moving the goalposts to legitimize your dismissal of these facts and in trying to embarass and discredit me.

That link shows that the breakdown of profit margins for the insurance industry for 2008 was as follows: Life Insurance 4.6%, Property & Casualty Insurance 3.3% and Health/Medical Insurance 2.2%.

Now, are you two going to continue trying to move the goalposts with this argument or find some other specious argument to legitimize your dismissal of the truth?

 

[PetesSweets86]

Why don't you stop dodging this question and instead defend the original analysis? Why didn't he compare it to auto, life or property insurance companies? If you can show that health insurance profits are in-line with other insurance industries, the argument might have some credibility. Otherwise, you are left defending a dishonest, misleading "analysis" based on cherry-picked numbers. But then again, that seems to be all that you do around here.

this is why (in relation)
YouTube- Austin powers its a bit nutty.

 

[hrmwrm]

http://money.cnn.com/magazines/fortune/fortune500/2009/industries/223/index.html

hmmm. quite the comparison to 2007.

 

[shagdrum]

http://money.cnn.com/magazines/fortune/fortune500/2009/industries/223/index.html

hmmm. quite the comparison to 2007.

Apples and oranges. What the article (and I) were pointing out were the average profit margins for those general industries for 2008. What you were are pointing out are the actual profits of select individual companies in the health insurance industry. Profit margins are not the same as actual profits and the industry average is different from individual industries.

If you wanna make an honest comparison, look at the profit margins for the insurance industries mentioned in 2007. What you get is as follows: Life Insurance = 10.65% for 2007 (4.6% for 2008), Property and Casualty Insurance = 9.9% for 2007 (3.3% in 2008) and Health/Medical Insurance = 6.2% in 2007 (2.2% in 2008).

Besides, I don't see what your point is. In all but four of those individual providers citing in your link, profits DROPPED by a very significant margin. If anything, that reinforces the claim that health insurers profits are not that great and have been dropping.

 

[fossten]

Johnny (and those who agreed with him) evidently missed calculus and managerial finance in college.

 

[JohnnyBz00LS]

The article gives the source of it's information. You can check the comparison yourself, which obviously neither of you have. You are simply interested in moving the goalposts to legitimize your dismissal of these facts and in trying to embarass and discredit me.

If the article you linked to in your original post has a link to the Fortune 500’s list, I missed it (I looked again and still don’t see the link you just now provided, so it must be well hidden). But thanks for that link dude, you just steered right into your own torpedo. And digging up ALL of the RELEVANT data and getting it on the table to make a fact-based honest assessment is NOT moving the goalposts.

That link shows that the breakdown of profit margins for the insurance industry for 2008 was as follows: Life Insurance 4.6%, Property & Casualty Insurance 3.3% and Health/Medical Insurance 2.2%.

And yet Woodward avoided listing those numbers in the article (as did you previously), and instead cherry-picked numbers from unrelated, product producing industries that ALL just happen to show profits higher than 2.2%:

The latest annual profit margins of a selection of products, services and industries: Tupperware Brands, 7.5 percent; Yahoo, 5.9 percent; Hershey, 6.1 percent; Clorox, 8.7 percent; Molson Coors Brewing, 8.1 percent; construction and farm machinery, 5 percent; Yum Brands (think KFC, Pizza Hut, Taco Bell), 8.5 percent.

Not only that, but both YOU and Woodward omitted mentioning these numbers from Fortune 500’s listing:

18 Commercial Banks 5.2% <- This is the highest performing “financial services” industry in the list
39 Wholesalers: Health Care 1.3%
45 Diversified Financials -0.6%
47 Insurance: Life, Health (mutual) -3.0%

All of which are at or below the lowest profit number quoted in the article. Therefore you’ve proven beyond a doubt that Woodward cherry-picked numbers from unrelated, product-producing industries (which makes a profit from adding value to raw materials) to make an apples-oranges comparison in an effort to provide a skewed portrayal of the health insurance industry (which makes a profit from handling other people’s money) as a financial weakling passing along so much of the premium dollars they bring in to barely be able to turn a profit. Not only that, but in your defense of Woodward’s “analysis”, you further that false portrayal by intentionally omitting other insurance and financial services industries (that also make a profit from handling other people’s money) that perform worse than the Health/Medical insurance industry.

So lets summarize:

1) You post an article that proposes that the health insurance industry (an industry that makes a profit by channeling money from customers to providers and skimming some for themselves off the top) isn’t as profitable as other industries that produce tangible goods (industries that make a profit by taking raw materials and adding value to it then selling the end product at a higher price that offsets the cost of the raw material and the cost of labor adding value to it). To support this proposition, they offer profit numbers for selected examples of those other “product producing” industries that just happen to be higher than the health insurance industry (averaging 7.1% for the industries quoted in the article vs 2.2% for the health insurance industry) while omitting ANY profit numbers from either other insurance industries or financial services industries that, like the insurance industries, also make a profit handling other people’s money.

2) I post an article that points out two key flaws in your original article: A) The false comparison to product producing industries, and B) The distortion that results from calculating profits based on the funds held in trust: OUR PREMIUM DOLLARS.

3) You go off on a tangent about “accounting standards” claiming McCanne used some “cherry-picked” accounting standard, all the while completely missing the point about differences between the types of industries being compared in the original article which was the impetus for McCanne’s application of a different standard for calculating profit margins.

4) I clarify my original point that Woodward was making a false comparison of the health insurance industry to product-producing industries and challenge you to make a proper comparison to OTHER insurance industries.

5) You oblige by providing the missing link to the Fortune 500’s listing of profit margins, and then select ONLY those insurance industry segments that are showing HIGHER profit margins than the health insurance industry (the average of those segments you quoted is 3.95% vs 2.2% for the health insurance industry).

6) Inspection of Fortune 500’s list reveals that, when compared amongst ALL the industries that either provide insurance or financial services (i.e.: making profits from handling other people’s money), the health insurance segment at 2.2% is NOT at the bottom of the list as you and Woordward are attempting to show, but it is actually ABOVE THE AVERAGE of 1.8%.

7) We haven’t even begun (at least until hrmwrm hinted at it) to talk about the fact that the SINGLE YEAR that Woodward has selected to pull his numbers from is 2008, which was a very hard year for the health insurance industry and ignores the higher profits they had been reporting in years prior.

It is abundantly clear that Woodward cherry-picked industries that showed high profits by making money in entirely different ways in an attempt to distort reality and help make his argument that the health insurance industry is barely making a profit look reasonable. Your lack of critical thinking to look beyond his smokescreen and instead defend him, EVEN AFTER I’VE POINTED OUT THE FLAWS AND DISTORTIONS in Woodward’s “analysis”, proves your dishonesty and lack of credibility and integrity.

 

[shagdrum]

If the article you linked to in your original post has a link to the Fortune 500’s list, I missed it

From the article:

Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better — drugs and medical products and services were both in the top 10.​

I never said the article gave the link. I said it gave the source. Nice straw man.

FYI: Expecting an article in the Associated Press to give specific numbers concerning a point that is only tangentially related to the actual argument is an absurdly inappropriate expection; it IS moving the goalposts.

And yet Woodward avoided listing those numbers in the article (as did you previously), and instead cherry-picked numbers from unrelated, product producing industries that ALL just happen to show profits higher than 2.2%:

Woodward didn't "avoid" anything. He focused on countering a specific argument for which the numbers you claim he was "avoiding" were only tangentially related. Considering the context of the argument in the original article (and the argument being countered by that article) the other industries being compared were not irrelevant, unrelated or misleading (as you are implying).

Also, if you knew why they include the qualifier "mutual" (basically, co-op type entities unique to parts of the non-healthcare insurance sector of the insurance industry), you would know that to cite the "mutual" listing in comparison to healthcare insurers is to mislead.

"Mutual" and "stock" are used as qualifiers for the double listings of Life and Property insurance on that list for a very specific reason; they are structured differently, run differently, subject to different laws and subject to different accounting standards then shareholder based companies (which include the healthcare insurance industry as well as the other industries on the list). To ignore that reason for differentiating between "mutual" and "stock" and inappropriately cite them as you do is to cherry pick and compare apples and oranges; to mislead through a false analogy and disinformation.

So, are you cherry picking and misleading because you simply don't know what you are talking about or because you are intending to deceive?

Despite your smug demeanor, your argument is based on ignorance, distortion and disinformation.

it is no excuse for presumptuous ignorance that it is directed by insolent passion
-Edmund Burke

 

[JohnnyBz00LS]

Woodward didn't "avoid" anything. He focused on countering a specific argument for which the numbers you claim he was "avoiding" were only tangentially related. Considering the context of the argument in the original article (and the argument being countered by that article) the other industries being compared were not irrelevant, unrelated or misleading (as you are implying).

These are the claims Woodward is countering:

THE CLAIMS

_"I'm very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years." House Speaker Nancy Pelosi, D-Calif., who also welcomed the attention being drawn to insurers' "obscene profits."

_"Keeping the status quo may be what the insurance industry wants their premiums have more than doubled in the last decade and their profits have skyrocketed." Maryland Rep. Chris Van Hollen, member of the Democratic leadership.

_"Health insurance companies are willing to let the bodies pile up as long as their profits are safe." A MoveOn.org ad.

Funny, I don't see any reference, directly or tangentally, to other industries' profits in ANY of those claims. Therefore Woodward CHOSE to cherry pick profit numbers to build his strawman argument. If he was attempting to argue directly against those claims, why did he even bother bringing other industries' profits into the argument and instead focus on debunking the claim that insurance company profits have skyrocketed during the Bush years or that they are merely protecting their profits? Because he CAN'T. He can only build a strawman to tangentally argue insurance profits weren't as big as other industries whose buisness models and profit machines operates completely different than insurance companies to support it. And YOU are siding with a tangental argument supported on tangental data that does ABSOLUTELY NOTHING to dispute the original claims.

*owned* :bowrofl:

 

[shagdrum]

:blah: :blah: :blah:

A few facts you are ignoring that misrepresent things; 1) the original claims being countered were never qualified as being in comparison to any specific industry so, by default, was in comparison to all "for-profit" industries, and 2) The other industries being compared to had stockholders and were profit based whereas the mutuals you cited were non-stockholder, essentially non-profit based organizations. That is the fundamental difference that would prevent comparisons between the two in the area of profit-margins. Other differences are not relevant to the comparison (as you are falsely claiming); in fact, as I have pointed out, accounting standards are constructed in such as way as to, among other things, make measurements like profit-margins comparable between similar profit motivated industries (another fact you are ignoring).

Basically, you are misrepresenting the argument being made (and the argument being countered) as making a false dilemma in claiming that the healthcare industry cannot be compared to other industries in the area of profit margins. Again, you are clearly grasping at straws to defend your worldview against reality.

But distortion, misdirection and mere rhetoric is all you have (backed up with smugness, of course). The fact is that your entire argument hinges on two distortions 1) misrepresenting the health insurance industry so as to presumptuously dismiss the wisdom of experience (inherent in the FASB standards) to apply cherry picked accounting standards and 2) comparing the profit margins of the health insurance industry to cherry picked portions of the insurance industry that are essentially run as non-profit organizations (and are not a part of the health insurance industry). Basically, your myopic focus on ideology leads you to distort reality to make it fit the theory. If reality has to be distorted to fit the ideology, then the ideology needs to be re-evaluated.

On a side note, it is rather sad when a forty-eight year old man feels the need to claim he "owned" someone.

 

[fossten]

Johnny's 48? Geez, I had put him at 19.

 

[JohnnyBz00LS]

On a side note, it is rather sad when a forty-eight year old man feels the need to claim he "owned" someone.

No, what is truly sad is that you actually believe I give a crap about what you think about me or my age. But even that isn’t nearly as pathetic as a voting-age “adult” who doesn’t know when he’s made a complete fool of himself by pointing out someone’s age and thinking that is a personal attack. Get a life.

1) the original claims being countered were never qualified as being in comparison to any specific industry so, by default, was in comparison to all "for-profit" industries

“By default”? Who defines this “default”? You are not entitled to your own reality. When someone talks about a specific industry segment (health insurance profits), it is inherently implied that they are speaking exclusively about and relative to THAT industry segment. If Bill Gates makes a statement about how great profits are for Microsoft, only an idiot would try to draw a comparison of that to profits for the oil industry or the automotive industry and intentionally exclude any comparison to profits of the software industry in which Microsoft competes. And it takes an even bigger idiot to buy into that false comparison. Nice try at distorting reality to fit your “argument”, but you FAIL.

2) The other industries being compared to had stockholders and were profit based whereas the mutuals you cited were non-stockholder, essentially non-profit based organizations.

First off, there was only ONE mutual out of the 4 industries I cited. Secondly…….

in fact, as I have pointed out, accounting standards are constructed in such as way as to, among other things, make measurements like profit-margins comparable between similar profit motivated industries

That statement undermines your arguments that health insurance industry profits are NOT comparable to insurance mutuals, which is also at odds with the fact that Fortune 500 included mutuals on their listing of “most profitable industries”. Just because mutuals don’t pay dividends to stockholders doesn’t mean they don’t have motivation to stay out of the red. Additionally, any “normalization” of profit-margin measurements between industry types that results from using so-called appropriate “FASB accounting standards” does nothing to normalize profit-margin expectations or performance between those industry types. For any valid, fair comparison of profit margins to hold water, it must be constrained to the particular type of industries where all of the companies operating within them are subjected to the same, or at least similar market, regulatory and economic forces. Anything else is an irrelevant, apples and oranges comparison.

Words YOU need to heed:

Basically, your myopic focus on ideology leads you to distort reality to make it fit the theory. If reality has to be distorted to fit the ideology, then the ideology needs to be re-evaluated.

Bottom line: Woodward attempted to counter statements made about health insurance profits by comparing heath insurance profit margins to cherry-picked numbers from industries that make profits by completely different means than the insurance industry does and is subject to different market, regulatory and economic forces. This produces an intentionally distorted perception that the health insurance industry is barely making a profit and is an under-performer in terms of profit margin. He also avoids making a direct comparison to other insurance or financial services industries that would undermine his exaggeration.

And then there’s Shaggy, humping the leg of this fraudster. :leghumper: Quite frankly, I can't watch much more of this. :yuck: