Lies, damn lies and statistics

Although I disagree with most of the goals of the Obama administration, I must admit that I admire the way they manipulate the flow of news and the selective statistics presented to support whatever information is released. Two examples show why it is important to have an analysis of every bit of information released by the White House.

First we have the canard that Medicare is actually more efficient than private health insurance companies. To support this, we are offered the fact that Medicare spends 2% on administrative costs as opposed to insurance companies who spend 12% on the same type of cost. On the face of it, the percentages are correct, but only because these numbers are reached by using the percentage of cost over the total expenditures. Thus, Medicare, which deals with elderly patients in the last years of their lives, spends more on each patient and the administrative cost is less. Let’s simplify this by using concrete numbers.

Assume that an insurance company has 100 customers of all ages, while Medicare has 100 who are 65 or older and we need $1200 worth of employees to deal with the paperwork of the insurance companies and $2,000 for Medicare. And now let us assume that we spend $100 per privately insured patient and $800 for those on Medicare.

The private insurance company spends $10,000 on their customers with a payroll of $1200 on employees. The percentage on administrative cost is 12%.

Medicare, on the other hand spends $100,000 and $2,000 on payroll, giving it 2% expenditure.

It takes no mathematical genius to see that the more efficient Medicare ends up screwing the taxpayer.

The next canard came yesterday when Obama used California as an example of energy efficiency when he stated, "Californians consume 40 percent less energy per person than the national average."

Again, the devil is in the details.

California has a temperate climate that leads to less consumption of electricity than Buffalo, NY or Miami, Fla., with the result that homes consume less heat in the winter and less air conditioning in the summer.

In addition, Obama used the fewer number of Californian power plants as an example of its efficiency. The little detail that he very carefully neglected to mention was that California imports 20% of the electricity it consumes from states without its environmental restrictions.

When Helen Thomas begins to question the flow of information form the White House, it is time for the rest of the press to start doing their homework.