Viewing entries tagged with 'Profits'
MUST SEE TV: AHIP's Mike Tuffin on PBS' Newshour
Posted by The Campaign on March 11, 2010 at 6:18 AM
MUST SEE TV: AHIP Hits the Nightly News To Discuss Costs and Set the Record Straight on Health Plan Profits
Posted by The Campaign on March 09, 2010 at 4:57 PM
CBS and ABC both reported on today's developments in the health care reform debate. Watch the full clips below which include important setting the record straight segments on health plan profits as well as good discussion on what is driving premium increases.
AHIP's Karen Ignagni on CBS Evening News:
AHIP's Robert Zirkelbach on ABC Evening News:
ICYMI: Slate's Tim Noah on Health Care Costs and Health Plan Profits
Posted by The Campaign on March 08, 2010 at 2:52 PM
While in general Tim Noah's recent article on Slate.com is off in many ways, he does have two very good points on health care costs and health plan profits.
Here they are:
On Health Care Costs: "Health insurers and other complain that the health reform bill does little to control doctor and hospital bills, especially in the private sector. That's true."
On Health Plan Profits: "Profit margins in the health insurance business aren't especially great. On Fortune magazine's list of the 53 most profitable industry sectors, health insurance ranks 35th."
FACT CHECK: What They Are Saying About Health Plan Profits
Posted by The Campaign on March 08, 2010 at 7:39 AM
Independent experts and economists all agree -- health plan profits are not driving health care costs or premiums higher. Here are what some of the experts are saying:
Alwyn Cassil, Center for Studying Health System Change:
“‘…this idea that (taking) this $12 billion that they have in profits … would fix our health-care spending problems is just a pipe dream.’” (Louisville Courier-Journal, Health insurers defend profits, 02/21/10)
Henry Aaron, Senior Fellow, Brookings Institution:
“‘Insurance company profits in the large picture have very little to do with the overall rising cost of health care,’ said health care expert Henry Aaron, a senior fellow at the Brookings Institution.” (ABC News, Health Insurance Profits: Not So Outrageous After All?, 11/10/09)
Kaiser Health News:
“With the nation’s health care spending estimated at $2.5 trillion this year, even the elimination of insurers’ profits and executive compensation would lower health care spending by just 0.5 percent.” (Kaiser Health News, Ad Audit: What If?, 06/19/09)
Jeff Jacoby, The Boston Globe:
“To such overheated agitprop, the only useful response is a cold shower of facts, and the Associated Press supplied a timely one last week. For all the impassioned talk about obscene profits and bodies piling up, reports AP’s Calvin Woodward, ‘health insurance profit margins typically run about 6 percent’ of revenue, a return ‘that’s anemic compared with other forms of insurance and a broad array of industries.’” (The Boston Globe, Jeff Jacoby, Hyperbole in the health debate, 11/01/09)
Rick Newman, U.S. News & World Report:
“...on the whole, blaming insurance firms for runaway healthcare costs is a weak argument, because the insurance industry isn’t all that profitable to start with.” (U.S. News & World Report, Why Health Insurers Make Lousy Villains, 08/25/09)
Steve Pearlstein, The Washington Post:
““Health insurance companies aren’t ridiculously profitable over time.” (The Washington Post, Weekly Q & A, 10/28/09)
Associated Press:
“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.” (Associated Press, FACT CHECK: Health insurer profits not so fat, 10/25/09)
Dr. Peter Kongstvedt, Economics Professor, George Mason University:
“Insurance companies are not the major drivers of cost inflation.” (CBS News)
Ezra Klein, The Washington Post:
“...it’s hard to see how [health plan profit margins of 3.3%] are a primary driver of health-care spending, much less the growth in health-care spending.” (The Washington Post, Ezra Klein, Profits and the Insurance Industry, 09/10/09)
Rick Newman, U.S. News & World Report:
“Some reformers want health insurers to simply hand over a chunk of their profits to help lower premiums and overall healthcare costs. The Senate Finance Committee bill, for instance, would levy a $6.7 billion annual fee on insurers to help pay for reform, in addition to fees on drugmakers and device manufacturers. But insurance companies aren’t the cash cows some imagine them to be. The profit margin for health insurance companies over the past year was 3.4 percent, according to the research firm Morningstar. That’s better than the median of 2.2 percent, but it ranks only 87th out of 215 industries. Drugmakers, by contrast, have a profit margin of 16.4 percent.” (US News & World Report, Why More Competition Won’t Fix Healthcare, 10/29/09)
The New York Times:
“The president said that health insurance companies were making ‘record profits.’ America’s Health Insurance Plans, the main lobby for insurers, contends that ‘for every $1 spent on health care in America, approximately one penny goes to health plans’ profits.’” (The New York Times, Experts Dispute Some Points in Health Talk, 07/23/09)
Les Funtleyder, Health Care Analyst:
“‘2008 was a terrible year. So the comparisons, while numerically correct, leave out a bit of context.’ Health care analyst Les Funtleyder at Miller Tabak says millions of people lost coverage last year because they lost their jobs, not because insurers purged their rolls.” (Marketplace, Insurer profits rise while coverage falls, 02/12/10)
Bill Frezza:
“If you took all the profits that all the health insurance companies made in 2009 and used them to pay for medical care in 2010 you would cover the country's medical bills for ... two days. Then what?” (RealClearPolitics.com, Why Washington Can't Reform Healthcare, 02/15/10)
FACT CHECK: Putting Health Plan Profits in Perspective
Posted by The Campaign on March 08, 2010 at 7:32 AM
Health plan profits continue to be a focus of the reform debate. Here are some important facts about health plan profits:
Analyzing 13 of the 14 health plan companies on the Fortune 500 list (these 13 have filed their initial year-end financial statements with the SEC) the profit margin for these 13 companies averages 3.19 percent for 2009 -- for 2008 it was 2.3 percent for these same 13 companies.
- Six of the 13 companies actually saw a decline in their profit margin - averaging a decline of 48.7% in profit margin from 2008 to 2009.
For the five largest health plans (determined by market cap), the average profit margin for 2009 is the second lowest from 2005-2009 - 2008 was the worst year.
- 2009 - 5.2% (4th)
- 2008 - 3.2% (5th)
- 2007 - 5.6% (2nd)
- 2006 - 5.4% (3rd)
- 2005 - 6.4% (1st)
According to Yahoo! Finance's analysis of the latest quarterly data, the net profit margin for the entire health care sector is 13.26%. Using the same index, health plans have a 4.3% net profit margin - 208% less than the entire health care sector.
According to Yahoo! Finance's analysis of the latest quarterly data, the net profit margin for drug makers was 21.3% compared to 4.3% for health plans - 395% less.
According to Fortune Magazine, the health insurance industry had a profit margin of 2.2% in 2008, ranking them 35th on the Fortune list of industry profits. This is below pharmaceuticals (#3, 19.3%), medical products and devices (#4, 16.3%), and medical facilities (#34, 2.4).
5 drug companies had profit margins of more than 20%
14 companies had profit margins of more than 10% -- which is more than double the health plan industry average
The average profit margin for health plans 3.19% vs. 18.67% for drug companies
The highest profit margin health plan company: 7.3% vs. 47.48% for a drug company.
One company had more profits than the entire health plan industry
The top two highest profit drug companies had almost double the entire profits for the health plan industry
Click here for a document putting health plan profits in perspective.
Fact Check: Putting Health Plan Profits In Perspective
Posted by The Campaign on February 12, 2010 at 12:10 PM
Facts about health plan profits:
- Analyzing 9 of the 14 health plan companies on the Fortune 500 list from 2009 (these 9 have filed their initial year-end financial statements with the SEC) the profit margin for these 9 companies averages 3.9 percent for 2009 -- for 2008 it was 3.1 percent for these same 9 companies.
- Five of the nine companies actually saw a decline in their profit margin – averaging a decline of 47.2% in profit margin from 2008 to 2009.
- For the five largest health plans (determined by market cap), the average profit margin for 2009 is the second lowest from 2005-2009 - 2008 was the worst year.*
- 2009 - 5.2% (4th)
- 2008 - 3.2% (5th)
- 2007 - 5.6% (2nd)
- 2006 - 5.4% (3rd)
- 2005 - 6.4% (1st)
- According to Yahoo! Finance’s latest analysis of quarterly financial data, the net profit margin for the entire health care sector is 11.1%. Using the same index, health plans have a 3.4% net profit margin – 226% less than the entire health care sector.
What Others Say About Health Plan Profits
- Ezra Klein: “...it’s hard to see how [health plan profit margins of 3.3%] are a primary driver of health-care spending, much less the growth in health-care spending.”
- Henry Aaron, Brookings Institution: “Insurance company profits in the large picture have very little to do with the overall rising cost of health care.”
- Dr. Peter Kongstvedt: “The insurance companies are not the major drivers of cost inflation…”
- Kaiser Health News: “With the nation’s health care spending estimated at $2.5 trillion this year, even the elimination of insurers’ profits and executive compensation would lower health care spending by just 0.5 percent.”
*Source: Analysis of SEC Data
FACT CHECK redux: The Facts About Health Plan Profits
Posted by The Campaign on February 11, 2010 at 7:05 AM
Health plan profits continue to be a source of debate in the larger conversation about health care reform. While there has been focus on the levels of profits, many independent experts continue to note that health plan profits are not a key driver of increasing health care costs. Below are some key points on health plan profits and fact checks setting the record straight:
Fortune 500 puts the health plan industry profits at 2.2%, 35th on the list. This is below other sectors of the health care industry. Click here for the full list.
For every dollar our nation spends on health care, less than one penny goes towards health plan profits. A sincere cost-containment discussion would focus on the other 99 cents. Check out this document which sets-the-record-straight about health plan profits.
ABC News reports on the attempt of some to vilify health plans by focusing on health plan profits, but as this article points out profits are neither as high as some claim nor are they the main driver of health care costs.
- “…the companies' profits still represent a miniscule percentage of the $2.5 trillion Americans spend every year on health care.”
- “‘Insurance company profits in the large picture have very little to do with the overall rising cost of health care,’ said health care expert Henry Aaron, a senior fellow at the Brookings Institution.”
The AP does a quick fact check on the claims about health plans’ profits. The article notes that many of the claims being used in the debate are misleading and in some cases wrong. - “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.”
- “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.”
- “…in pillorying insurers over profits, the critics are on shaky ground.”
According to Ezra Klein, a blogger for the Washington Post:
- "The insurance industry is not a particularly profitable industry."
- Health plans are "...the 86th most profitable industry as measured by profit margins, with an average margin of 3.3 percent."
- "...it's hard to see how [health plan profit margins of 3.3%] are a primary driver of health-care spending, much less the growth in health-care spending."
Fact Check: Another Media Outlet Sets the Record Straight on Health Plan Profits
Posted by The Campaign on November 12, 2009 at 11:56 AM
ABC News reports on the attempt of some to vilify health plans by focusing on health plan profits, but as this article points out profits are neither as high as some claim nor are they the main driver of health care costs. Key excerpts are below: “…the companies' profits still represent a miniscule percentage of the $2.5 trillion Americans spend every year on health care.”“‘Insurance company profits in the large picture have very little to do with the overall rising cost of health care,’ said health care expert Henry Aaron, a senior fellow at the Brookings Institution.”
FACT CHECK: Associated Press – Health insurer profits not so fat
Posted by The Campaign on October 25, 2009 at 2:16 PM
The AP does a quick fact check on the claims about health plans’ profits. The article notes that many of the claims being used in the debate are misleading and in some cases wrong. Here are some key excerpts from the article:
“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.”
“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.”“…in pillorying insurers over profits, the critics are on shaky ground.”
“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 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.”
For the full article, click here.
FACT CHECK: Health Plan Profits In Perspective
Posted by The Campaign on October 08, 2009 at 12:56 PM
While some claim that health plans make the most profits, here are the facts:
Fortune 500 puts the health plan industry profits at 2.2%, 35th on the list. This is below other sectors of the health care industry. Click here for the full list.
According to Ezra Klein, a blogger for the Washington Post:
- "The insurance industry is not a particularly profitable industry."
- Health plans are "...the 86th most profitable industry as measured by profit margins, with an average margin of 3.3 percent."
- "...it's hard to see how [health plan profit margins of 3.3%] are a primary driver of health-care spending, much less the growth in health-care spending."
For every dollar our nation spends on health care, less than one penny goes towards health plan profits. A sincere cost-containment discussion would focus on the other 99 cents. Check out this document which sets-the-record-straight about health plan profits. Also, check out Fortune Magazine's recent industry profitability rankings. In 2008, health plans had a profit margin of 2.2% and are 35th on the list.
