Sunday, October 25, 2009

Phony AP Fact Check Equates Hershey sweets to Health Insurers. This is a Major News Outlet Advocating Ludicrous Industry Talking Points

To start with, profits are different from income. Profits happens after health insurers pay for everything from salaries and bonuses to brick and mortar costs. It's what's left.

In the AP analysis below, profits are "presented" as "all of the above," and not just what's left after expenses. AP blatantly misinforms the public under the disguise as "fact checking." I've never seen anything like this.

Never in the following piece does AP's "fact check" make the distinction. Cute.
(AP) - 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."
See how they set that up? Profits for consumer goods, with their highly mechanized factories churning out product, are compared with a bloated industry of employees, buildings and CEO's. A bizarre comparison to say the least. Don't forget, this is the Associated Press, a supposed "news" organization. They continued with this;
"Profits barely exceeded 2 percent of revenues in the latest annual measure. 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
That was AP's snarky attempt at humor by Calvin Woodward, from the conservative wing located in Washington, D.C..

Maybe the White House is calling out the wrong faux news agency.


  1. Yea, John, and a lot of people think that's pretty reasonable, but that 2% is ONLY the profits they have to pay taxes on. It does NOT include all of the other waste the industry generates (high CEO salaries and bonuses, marketing and advertising, broker commissions, actuarial costs, and etc.). The insurance bureaucracy itself drains 31% of our healthcare costs without ever laying hands on the patient.

  2. The key is "Return on Investment." I haven't gotten around to researching that figure yet.

    2% profit is about on par with grocery stores.

  3. Personally, I'd be happy to pocket 0.1% of what is spent on health care.

    The reports of ONLY 2% remind me of the old urban folklore scam of cooking a bank's books so you can skim the round-off difference in interest.