Thursday, October 08, 2009

Chart of the Day

Many Obamacare supporters have been demonizing private sector health insurance companies. The profit motive, they claim, is inherently inconsistent with effective health care -- so more government is the answer. Do the data support this view?

Big Government's Patrick Tuohey answers:
Beverly Gossage, Research Fellow for Show-Me Institute and founder of HSA Benefits Consulting wondered which insurance companies rejected the most claims. She found her answer in the AMA’s own 2008 National Health Insurer Report Card. The chart below appears on page 5 of the 16-page report.

source: American Medical Association

As Tom Blumer says on NewsBusters:
The Medicare denial rate found in the study was, on a weighted average basis, roughly 1.7 times that of all of the private carriers combined (99,025 divided by 2,447,216 is 4.05%; 6.85% divided by 4.05% =1.69).

You would think Medicare's sheer size might enable it to have smoother procedures with its providers that would enable it to turn down a lower percentage of claims. But no, this is the government we're talking about.

So who's the most "heartless" now? And why should Americans accept the idea of gradually being forced into a government-run system when, based on documented government experience, they will be more likely to see their claims denied?
Yes, the numbers doubtlessly also reflect private insurers' ability, outside of "guaranteed issue" states like New York and New Jersey, to choose their customers. Yet, it's more evidence the health reform crowd hasn't made its case. As this amusing video confirms.

(via Don Surber, reader John B., TigerHawk)


Anonymous said...

While these facts are interesting, I wonder what percentage of total health care spending is accounted for by insurance company costs/profits. I suspect it is very low.

@nooil4pacifists said...

I've answered here.