The Health Insurance Straw Man

We keep hearing from politicians and reports from the media that the health insurance industry is making intolerably high profits and that therefore we need a government-sponsored plan to bring costs down (like that’s gonna happen).

Newsbusters.org has ranked 53 American industries by profitability. Health Care: Insurance and Managed Care operates at a 2.2% profit (makes 2.2 cents profit per dollar of revenue). This is excessive to our leaders? If so, why are they not going after Public Gas and Electric Utilities at 8.7 % profitability? Wouldn’t the higher rate of return be more highly intolerable?

I’d be interested in seeing a report on the profitability of health-care related litigation services.

Here’s the list:

2008 Industry Rank as % of Revenues
1. Network and Other Communications Equipment 20.4
2. Internet Services and Retailing 19.4
3. Pharmaceuticals 19.3
4. Medical Products and Equipment 16.3
5. Railroads 12.6
6. Financial Data Services 11.7
7. Mining, Crude-Oil Production 11.5
8. Securities 10.7
9. Oil and Gas Equipment, Services 10.2
10. Scientific, Photographic and Control Equipment 9.9
11. Household and Personal Products 8.7
12. Utilities: Gas and Electric 8.7
13. Aerospace and Defense 7.6
14. Food Services 7.1
15. Industrial Machinery 6.9
16. Food Consumer Products 6.7
17. Electronics, Electrical Equipment 6.5
18. Commercial Banks 5.2
19. Telecommunications 5.1
20. Chemicals 5.0
21. Construction and Farm Machinery 5.0
22. Insurance: Life, Health (stock) 4.6
23. Information Technology Services 4.5
24. Computers, Office Equipment 4.3
25. Metals 3.9
26. Wholesalers: Diversified 3.5
27. Insurance: Property and Casualty (stock) 3.3
28. Specialty Retailers 3.2
29. General Merchandisers 3.2
30. Health Care: Pharmacy and Other Services 3.0
31. Packaging, Containers 3.0
32. Beverages 2.9
33. Engineering, Construction 2.7
34. Health Care: Medical Facilities 2.4
35. Health Care: Insurance and Managed Care 2.2
36. Petroleum Refining 2.1
37. Food and Drug Stores 1.5
38. Pipelines 1.5
39. Wholesalers: Health Care 1.3
40. Semiconductors and Other Electronic Components 1.0
41. Energy 0.9
42. Home Equipment, Furnishings 0.7
43. Food Production 0.6
44. Wholesalers: Electronic and Office Equipment -0.3
45. Diversified Financials -0.6
46. Motor Vehicles and Parts -0.7
47. Insurance: Life, Health (mutual) -3.0
48. Hotels, Casinos, Resorts -4.5
49. Automotive Retailing, Services -7.9
50. Forest and paper Products -9.6
51. Entertainment -10.0
52. Real Estate -13.4
53. Airlines -13.5