Tag Archives: medical

Health Care CEO Misleads Using Numbers

Many opponents of health care reform are throwing numbers around, making it sound like the health care industry is barely profitable. They claim a 2-3% profit margin. It’s a half-truth –that 2-3% is, in fact, the percentage of total revenue, which is different from net return on investment. For example, CNN Business lists fortune 500 industries by profit margin of total revenue.

If I make $2 for every $100 I collect in revenue that’s 2%. But if I make $2 million for every $100 million I collect that also 2%.  If my operating costs are 20% of my gross profit (the insurance company average is about 17%), then in the former example my net profit is $1.60, a 400% return on my $0.40 investment. In the latter example it would be $1.6 million, also a 400% return. In both I keep 80% of the gross. In other words, the health care industry’s revenue is ginormous, and its operating costs are low. There’s tons of wiggle room for profit even with having to pay out medical claims.

No one would stay in any business with a 2-3% net return on investment when CD bank rates are 2.85% for a 5 year certificate. With those numbers a business might as well invest its money and do nothing. The real numbers show that the health care industry’s return on share holder equity is 16%. Not a bad return at all. But if you accept the profit margin lie, then the health care companies must be operating at a major loss, which we know isn’t true.

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Flu Vaccination – Free Medical Advice On The Street

I think this is the type of socialized medicine the GOP will accept wholeheartedly, because it’s absolutely free, with no cost to the taxpayer. What better place is there to gain solid medical advice than from the street. Forget those egg-head doctors and their years of training and their access to the greatest data bases of knowledge in the world. I want the dumbo brunette on the corner who passes out pamphlets, and her gibbering throng of morons who can’t help but play to a camera, to determine whether or not I get the flu shot. Would you ask any of these halfwits to do your taxes? I think not.

 

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Filed under Culture Warfare, Science