Solar Blemishes VIII

Or Lies, Damned Lies and Statistics.

This morning the Sun presented yet another editorial advocating for a public option in health care reform (or is it health insurance reform? I can't keep up with all of the semantic games). They included some statistics to help make their case.

As Sen. Maria Cantwell, D-Wash., explained so well to her committee colleagues, the reason to approve a public option is this: Over a 10-year period, she said, insurance company profits soared by 428 percent and premiums rose 120 percent while the average wage of an American worker nudged upward only 29 percent.

428%? When you've actually done some research, as I have, and know that the largest health insurers profit margins are in the low- to mid-single digits a number that large just seems too good (or bad) to be true. Turns out that it is.

The figure originates from this report from Health Care for America Now (HCAN). The claim that "insurance company profits soared by 428 percent" is very misleading. The information is contained on p. 8 of the report. HCAN merely took the 10 largest publicly-traded health insurance providers in 2007 and compared each company's net profit in 2007 to their net in 2000.

This is not an accurate representation of the growth of profits of the industry as a whole, or even how the profits of the 10 largest insurance companies in 2000 compared to the 10 largest in 2007. It is merely a reflection of how these individual companies grew during this time (many of them from relatively small firms). This "study" is rougly equivalent to saying that, since the New England Patriots won 5 games in 2000 and 16 games in 2007, that wins in the NFL increased by 220% during that time. It is an absolutely meaningless statistic.

When you look into who HCAN is or, rather, who comprises HCAN, it's easy to see why they would present such a misleading study. HCAN is a coalition of left-wing organizations, including ACORN, AFSCME, MoveOn.org, National Council of La Raza, SEIU, Center for American Progress Action Fund and many more. This is a conglomeration of leftist activist groups that was created for the very purpose of pushing the left's version of health care reform. The left dismisses their opponents as shills for Big Insurance and Big Pharma but an organization whose very reason for being, its raison d'être, is to advocate for a particular policy is considered beyond reproach.

Once again, the Sun editorial board simply parrots the assertions of liberal/leftist politicians, media and activist groups without even a cursory check of the facts. It's one thing for a politician to do this but quite another for journalists.