Tag Archives: Private

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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Charles Darwin, The Human Being

descent-of-man

Sexual differences in freshwater Swordtail. Male has a long tail appendage to show off to the ladies.

I consider Charles Darwin’s The Origin Of Species and The Descent Of Man two of the greatest books never read by creationists. Both are beautiful works celebrating the details of the natural world. But many creationists condemn them without even a glance. They read reviews, they often say, or they rely on the “experts” to judge the value of Darwin’s “theories”. The unwilling creationists don’t know what they’re missing.

Even within Darwin’s dry technical books -as apposed to his personal journals or autobiography- there is the occasional glimpse into his sense of humor. In The Descent of Man, for instance, one can read a hundred pages of qualitative data and then be surprised with a mild joke, an anecdote, or a quip about the French. Here Darwin talks about the quiet female Cicada:

Every one who has wandered in a tropical forest must have been astonished at the din made by the male Cicad√¶. The females are mute; as the Grecian poet Xenarchus says, “Happy the Cicadas live, since they all have voiceless wives.”

See, wife jokes were funny in 19th century England and ancient Greece. And it goes to show that a century is not a long period of time at all. The year 1871, when The Descent Of Man was published, was yesterday. In the 18th century, Charles’ grandfather, Erasmus Darwin, once wrote about lending a college friend his class notes. The friend angrily returned them with a scribble across the cover, which accused him of atrocious spelling and being the son of a whore. Charles Darwin, you devil, you’re a human being after all. And you’re “descended from monkeys”.

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