Statistics, as the saying goes, are like a Speedo. What they show you is interesting, but what they conceal is essential.
Consider the recent comments by Ezra Klein in the Washington Post. Mr. Klein first asks us to all shed a tear for the health insurance industry, telling us that it’s profit margin is only 4.54%. That sounds like the same math used by Hollywood studios to explain why blockbuster movies that gross hundreds of millions actually lose money.
But Mr. Klein (in a blog post widely circulated by AHIP) is not only chief apologist for the private payer community, but is also its finger pointer-in chief. Why are healthcare costs so expensive? According to Mr. Klein the problem is caused by “new and incredibly expensive treatments.”
Per Mr. Klein the problem is … innovation ... of the pharmaceutical and medical technology varieties. In other words what we need are fewer new molecular entities (NMEs) and not too many cutting edge medical technologies. Really?
As Albert Einstein said, “Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.”
This strategy of projection and finger pointing misdirection is not only wrong – it will boomerang against those making the argument. Every poll on the issue of healthcare reform makes it abundantly clear that patients and physicians are keenly aware and unhappy with those who support a short-term cost-based payer-friendly paradigm over a more holistic patient-centric health care solution.
As Harvard University health economist (and Obama healthcare advisor) David Cutler has noted, "Virtually every study of medical innovation suggests that changes in the nature of medical care over time are clearly worth the cost." The repercussions of choosing short-term stock prices over long-term results are pernicious to both the public purse and the public health.
