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Subject: Unbiased reporting the the health care industry
Nanheyangrouchuan    10/16/2009 9:49:43 PM
Relentlessly punish the health insurance industry.

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The Daily Walk of Shame: "Unbiased" Health Insurance Industry Report
A recent PwC report on health-care reform seems factually flawed and politically timed.

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By Jordan DiPietro
updated 3:17 a.m. MT, Fri., Oct . 16, 2009

This new Motley Fool series examines things that just aren't right in the world of finance and investing. Here's what's got us riled today. If something's bugging you, too -- and we suspect it is -- go ahead and unload in the comments section below.

Today's subject: One day before a critical vote was to occur in the Senate committee on health-care insurance reform legislation, PricewaterhouseCoopers released a report warning of increased family premiums and an overall increase in health care costs if comprehensive health-care legislation was passed. The report, paid for by the industry trade group America's Health Insurance Plans (AHIP), is intended for circulation on Capitol Hill and will also be promoted in new advertisements. Karen Ignagni, AHIP's President and CEO, said "between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system".

This all comes out despite a report released last week by the nonpartisan Congressional Budget Office (CBO) stating that the legislation in question would reduce the federal deficit by $81 million by 2019 and would probably extend coverage to about 29 million Americans who currently lack insurance.
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Why you should be indignant: Where to begin? There are at least three very good reasons to be apprehensive of PwC's report.

1. Because the report is commissioned by AHIP, a group that represents health policies from companies like Aetna (NYSE:AET), Aflac (NYSE:AFL), and Humana (NYSE:HUM), PwC should have been extra careful to dispel any apparent conflict of interests. However, instead of performing tremendous due diligence, PwC seemed to have produced a report with too many holes to poke through and too much room left to be guessing about the legitimacy of their work.
2. It is possible that PwC was not aware when AHIP was going to release their report. However, the fact that it was unveiled one day before a critical Senate committee vote seems to be suspicious at best, and politically motivated at worst. Officials of the Obama administration questioned the timing and authorship of the report.
3. John Gruber, a health care economist at the Massachusetts Institute of Technology, said he evaluated the report the day after its release and found it deeply flawed. Among the problems with PwC's analysis, Gruber highlighted:

a. The report fails to take into account administrative overhead costs that he said will "fall enormously" once insurance policies are sold through new government-regulated exchanges.
b. It also failed to consider government subsidies that would be provided to help moderate-income American's purchase insurance.
c. It reaches the opposite conclusion as Gruber, who says that premiums would actually decline for individuals purchasing and families purchasing insurance, with or without government subsidies.

The bottom line: Gruber says "If you literally take the data from the CBO, you can see that individuals will be saving money in a nongroup market."

What now? Well, you can choose to believe PwC's report or you can choose not to. Before you reach any conclusion, consider this: In the early 1990's PwC performed similar studies for the tobacco industry, which included bigwigs like Phillip Morris International (NYSE:PM) (then part of Altria) and Reynolds American (NYSE:RAI). They provided supposedly hard data that showed how a new excise tax on tobacco would destroy hundreds of thousands of jobs.

The report was apparently so lopsided that another consulting firm, Arthur Andersen, reviewed PwC's work. They found "serious methodological problems and errors of omission (one-sided analyses likely to lead to misinterpretation) in both the PW Report and the [tobacco industry's Tobacco Institute] Estimates." Ultimately, the string of blunders made by PwC led Andersen to report that "these and other serious flaws in the Price Waterhouse Report and the Tobacco Institute Estimates build upon one another in a cumulative fashion to present grossly exaggerated and misleading estimates of job loss from an increase in the federal excise tax on tobacco products."

There are some eerie similarities here considering that one of the methods considered for funding health-care reform is a tax on some very expensive "Cadillac" health-care plans. Looks to me like another case of lobbyists hiring consulting groups to find data that supports their claims instead of performing a comprehensive, objective analysis.

This report has conflict of interest written all over it. Ill-timed. Factually debatable. Contrary to reports by the CBO. I'm not buying one word of it.

Put aside the crazy town hall meeting thoughts on health-care reform for one moment and let me know -- what do you think about the PwC health insurance industry report?

Fool contributorJordan DiPietrodoes not own shares of any companies mentioned. Aflac is aMotley Fool Stock Advisorpick. Phillip Morris is aGlobal Gainsselection. The Fool has adisclosure policywith no conflict of interests and which releases information in a timely manner.

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Pages: 1 2
sentinel28a       10/18/2009 6:14:49 AM
Punish the health care industry...because the VA, Indian Health Services, and Medicare are run so much better.
 
 
Quote    Reply

PlatypusMaximus       10/18/2009 8:44:38 AM
Assault the liberty and property of Americans because (depending on how you look at it) the accounting industry lied about the insurance companies.
 
 
 
Quote    Reply

Nanheyangrouchuan       10/18/2009 1:22:28 PM

Assault the liberty and property of Americans because (depending on how you look at it) the accounting industry lied about the insurance companies.

 

 


 
Insurance companies assault Americans' bodies with "no storms".  Can you think of any other industry sector in which you pay in full and on time for a service and can be legally refused use of that paid for service?
 
Quote    Reply

sentinel28a       10/19/2009 2:10:36 AM
Home insurance.  My basement flooded and I couldn't get the insurance company to pay up, since they don't cover groundwater.
 
Same thing with my health insurance.  Surgery: covered well and pretty much paid for.  Outpatient got-the-flu? They covered a tiny bit.  But that's because I want to keep my premiums low and I don't have outpatient coverage on my plan.  If I want it, I pay more.  Kind of like if I want to ship next-day air, I have to pay more for that, too.
 
BTW, Nan, claiming that MSNBC is unbiased is like claiming Fox News is unbiased. 
 
Quote    Reply

PlatypusMaximus       10/19/2009 8:02:33 AM
So, pass a law that bans lopsided reporting. What are you strange, strange people fighting? What are you waiting for?
The plan is to give more by having people pay more and get less. The insurance industry is a tax ID#, a logo, and people who buy insurance, you want the same thing the insurance industry wants, you just want to be the one that chooses what happens, and to who.
 
Quote    Reply

Nanheyangrouchuan       10/19/2009 10:42:03 AM

Home insurance.  My basement flooded and I couldn't get the insurance company to pay up, since they don't cover groundwater.

 

Same thing with my health insurance.  Surgery: covered well and pretty much paid for.  Outpatient got-the-flu? They covered a tiny bit.  But that's because I want to keep my premiums low and I don't have outpatient coverage on my plan.  If I want it, I pay more.  Kind of like if I want to ship next-day air, I have to pay more for that, too.

 

BTW, Nan, claiming that MSNBC is unbiased is like claiming Fox News is unbiased. 


Still the insurance industry. Did you know that the insurance industry is going to be subsidized by the WB and IMF to go out and provide "simplified" home, property and medical policies to people in developing nations?  Sat in on that little session at World Water Week in Stockholm in August.
 
MSNBC may be biased, but Motley Fool, not so much.
 
 PM, your ideas are stupid and wrong.

 
Quote    Reply

reefdiver       10/19/2009 11:02:13 AM
And pray tell - what evidence do we have that the government's reports on all this should be trusted? How can the government confirm or deny anything when the bills are even complete?  Talk about "choke on a gnat and swallow a camel". Nonetheless, both sides deserve to be heard.
 
The Coopers report basically said what should be intuitive to any bright high-school kid:
 
If you require everyone to buy insurance or pay a $750 annual fine
AND
If you require the insurance companies to accept all pre-existing conditions without any exclusionary period on these conditions (NOTE: the potential problem might be solved with an exclusionary period)
THEN
many savy people will pay the $750/year because its less than they would pay in premiums. Many might even drop their current policies.  They would then plan on buying insurance only if they actually needed it - perhaps paying cash for minor doctor visits (which they would anyway with a high-deductible plan).
THUS
because the plans are now being flooded with high-risk people, but the new pool of healthy people promised by the government did not sign up to help "spread the risk",
THEN
since the risk went up, but the member pool did not, then costs spread over the pool will rise instead of dropping and the insurance companies will have to raise rates. (or go out of business, but wait - they're too big too fail... We know where that leads)
 
 
 
Quote    Reply

reefdiver       10/19/2009 11:04:03 AM
Whoops - that was supposed to be:  :How can the government confirm or deny anything when the bills AREN'T even complete?"
 
Quote    Reply

sentinel28a       10/19/2009 8:31:51 PM
Everybody's biased, Nan.  MSNBC says "Torch the insurance industry!"  You agree with that.  Fox says "Obama is way over his head!"  I agree with that.  We're both biased. 
 
Okay, let's get rid of the insurance industry.  All of it.  Clear it out.  What do you plan on replacing it with?
 
Because I'm telling you, I like having travel insurance, the way luggage gets handled.
 
 
Quote    Reply

Zhang Fei       10/19/2009 9:05:58 PM
BTW, Nan, claiming that MSNBC is unbiased is like claiming Fox News is unbiased. 
News coverage from Fox News is pretty even-handed. Heck, news-wise, it's a model of neutrality compared to CNN, and the rest of news channels:
I made the point yesterday that Fox News has opinionists — pundits — and also straight, or straighter, news. And bless the network that understands the difference: the difference between news and opinion, or news and partisan attacks. On CNN, the anchorman Anderson Cooper was interviewing David Gergen. This was at the time the ?tea party? protests began. Gergen was saying that Republicans needed to find their voice. Cooper responded, smirkingly, ?It?s hard to talk when you?re teabagging.?

According to the Urban Dictionary, ?teabagging? is ?the insertion of one man?s sac[] into another person?s mouth.?

Well, CNN has opinionists, too — though when your anchorman is Anderson Cooper, do you really need opinionists? This morning, I thought of a CNN moment that a lot of us wrote about at the time. A host, D. L. Hughley, said that the 2008 Republican convention was like Nazi Germany. He said, ?It literally looked like Nazi Germany. It really did.?

It really did. Never forget that CNN is a real news network, and Fox an unreal, or fake, or illegitimate one. The Obama White House tells you that. Never forget it, never.

P.S. I don?t much care whether CNN has comedians saying the Republicans are Nazis. To be a Republican — certainly a conservative — is to be called a Nazi almost as a matter of routine. But could the CNN types stop whining about Fox? Get off their high horses about Fox? That?s the bothersome thing: the clueless hypocrisy (although if hypocrisy is clueless, is it genuinely hypocrisy? To be taken up later . . .).
 
Quote    Reply

Zhang Fei       10/19/2009 9:24:24 PM
I have to wonder what the media reaction would be if Fox News reporters started calling liberal demonstrators fudge packers..
 
Quote    Reply

usajoe1       10/20/2009 5:11:06 AM
Msnbc is nothing but far left network, from top to bottom.
 
CNN is a boring version of Msnbc
 
Fox is more to the right but its news guys like Shepard Smith, Chris Wallace, and Bret Baier are some of the best in the business. Its opinion guys like Hannity, Oreilly and Beck are entertaining. Fox news has news and opinion unlike the other two, which are cheerleaders for the Obama administration, almost 24/7
 
That is why Fox news destroys both of those networks put together in ratings.
 
Quote    Reply

sentinel28a       10/20/2009 2:59:19 PM
I think Fox is too sensationalistic in its news coverage.  I like Shep Smith, but every time the guy comes on, I think of Don Henley's song "Dirty Laundry":
 
The bubbleheaded bleached blonde comes on at five
She can tell you about the plane crash with a gleam in her eye
It's interesting when people die
 
I think that of other talking heads too (the song is more appropriate for Katie Couric).  As I've said before, I think O'Reilly is a great author but a poor host (with his penchant for overriding everyone when they try to talk), Hannity is okay, Beck is just insane, Greta van Susteren only seems to come alive when something happens to blonde white girls.  All that said, it's fine with me if Fox wants to lean right.  It's fine with me if MSNBC wants to lean left, though their mindless, Pravda-like worship of Obama is disgusting to watch.  CNN isn't much better.
 
What angers me is when the left and the Obama administration bitch and gripe about Fox criticizing the President.  So it was okay for CNN and MSNBC to go after Bush hammer and tongs, but now that the shoe is on the other foot, it's not okay?  Conservatives want a voice on talk radio and a network that listens to them, but that's not okay?  No, no...it has to be the left's message and only the left. 
 
How very, well, Nazi of them.
 
Quote    Reply

Zhang Fei       10/20/2009 7:40:28 PM
I think that of other talking heads too (the song is more appropriate for Katie Couric).  As I've said before, I think O'Reilly is a great author but a poor host (with his penchant for overriding everyone when they try to talk), Hannity is okay, Beck is just insane, Greta van Susteren only seems to come alive when something happens to blonde white girls.  All that said, it's fine with me if Fox wants to lean right.
 
These are commentary, not news programs. The people you highlighted are not reporters. CNN's Campbell Brown is a reporter. Anderson Cooper is a reporter. They spent the Bush years lashing out at Bush every chance they got, and have spent the past nine months treating Ogabe as a conquering hero, and rubber-stamping all his initiatives, while trashing his opponents as extremists, racists, teabaggers and so on. In the meantime, the only really bad thing Beck has said is to call Ogabe a racist. Note that he did not call Ogabe's followers as a whole racists.
 
Quote    Reply

Zhang Fei       10/20/2009 10:30:28 PM
Krauthammer on Ogabe and the media:
 
Look, the great sin of Fox News is it broke the monopoly of the liberal media.

 

That's the reason why it is so wildly successful. I once said years ago that the genius of Roger Ailes and Rupert Murdoch is to have discovered a niche audience of American broadcast news, namely, half of the American people.

 

And the other consequence is that it angers the Obama administration, which is used to, particularly after last year, wall-to-wall adulation.

 

I mean, this is almost comical if you look at the lineup. On the one hand, in the tank are NBC, ABC, CBS, NPR, PBS, CNN and MSNBC. Some of these like MSNBC are so in the tank they need scuba gear. Some of them occasionally emerge for a breath of air, but only occasionally.

 

And Fox stands up and refuses to bend a knee, and that's what they can't stand.

 

Look, CNN was patted on the head by the Obama administration as objective. CNN is an organization that a few weeks ago had a fact-checking on a "Saturday Night Live" skit that was mildly critical of Obama, but did no fact checking on wildly, grotesquely, libelous racist statements allegedly made by Rush Limbaugh which were not made by Rush Limbaugh.

 

?That's not a matter of sloppiness. That's a matter of ideology.

 
Quote    Reply
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