Grading PolitiFact (Ohio): Dennis Kucinich and faux health care dollars

The issue:

Makes one wonder what a "health care dollar" is, doesn't it?

The fact checker:

PolitiFact Ohio has a solo operation going this time.  Perhaps we can refer to Tom Feran as a "blogger" since he's apparently working without the layers of accountability that help put the mainstream media securely above the rest when it comes to providing reliable information.

Tom Feran:  writer, researcher, editor

Analysis:

Feran, perhaps influenced by the narrative style of the St. Petersburg Times, takes his time getting to the point:

Republicans took control of the House of Representatives this month with the announced intention of dismantling the new health care law.

They started by approving rules that would permit the legislation's repeal without any requirement to make up resulting losses in revenue. The nonpartisan Congressional Budget Office estimated that the Health Care Law Act would reduce federal budget deficits by $145 billion over 10 years. Repealing the legislation (which Republicans formally labeled "the Job-Killing Health Care Law Act") would increase federal deficits $230 billion over the next decade.

This is a fact check of Dennis Kucinich, mind you.  Feran's second paragraph essentially repeats a bogus Democrat talking point about the effect of PPACA on the federal budget.  For my explanation as to why Feran's CBO numbers aren't important, go here.

With the Republicans cast as the budget-busting heavies in this tale, it's time for Feran to introduce the hero:

Rep. Dennis Kucinich is among defenders of the health care law. One of its benefits "is to make sure that more of the health care premium dollar goes for, in fact, health care," the Cleveland Democrat said in an interview on CNN.

One almost expects dramatic Kucinich-to-the-rescue theme music to accompany the first line.  But what benefit is Kucinich talking about?  Surely not the provisions that add additional layers to the federal bureaucracy attached to health care, such as the Independent Payment Advisory Board.  Kucinich must be talking about the new federal regulations under PPACA that fix a minimum percentage of premiums private insurers must apply toward benefits (otherwise offering rebates to their customers).

Unfortunately, the search for context leads to a dead end on the PolitiFact page.  The text of the story refers to "an interview on CNN."  The list of sources in the sidebar to the right features an entry for a Congressional Quarterly transcript of a Fox News interview from Dec. 31.   Did Fox and CNN merge and I missed it?  Kucinich hit a similar talking point Jan. 3 on MSNBC (here).

The, uh, money quote:

"You have to keep in mind," he said, "that prior to the passage of the health care reform bill, one out of $3, of every health care dollar spent, went for corporate profits, stock options, executive salaries, advertising and marketing, the cost of paperwork -- that was over $800 billion a year -- didn't go for health care."

That's a lot of expenses. PolitiFact Ohio thought it would check Kucinich’s statement.

There's the supposed fact check.  But are we checking for the one out of $3 that went to corporate profits and the like or are we checking the "over $800 billion a year" that didn't go for health care?  Bear that question in mind as we continue to follow along.

The congressman's staff said his primary source for the breakdown was a much-cited study by Drs. Steffie Woolhandler and David Himmelstein of Harvard Medical School. Published in 2003 in the New England Journal of Medicine, the peer-reviewed study analyzed administrative costs of the U.S. health system, and found that they consume 31 percent of health spending.

It's a problem for Kucinich to use that study as his primary source.  Will PolitiFact notice the problem?

Kucinich's estimate of the total tab comes from the the official estimate of total health care spending in the United States, the National Health Expenditure Accounts issued by the federal Centers for Medicare and Medicaid Services.

Their latest report, issued this month, said that health expenditures in 2009 reached $2.5 trillion. (The figure represented the slowest rate of increase in 50 years, which was attributed to people losing jobs and health insurance and deferring medical care.)

We did the math. Thirty-one percent of that comes to $775 billion -- close to $800 billion, but not "over" it.

Hmmm.  That's not the problem I had in mind.  PolitiFact neglected to round up from 31 percent to one-third (33 percent).  Doing that makes Kucinich's numbers work perfectly ($833 billion).  Sort of.

But the 31 percent figure might be too low, and a higher percentage could push costs past $800 billion.

Well, that's another way to rescue Kucinich.  Unless PolitiFact uses its method of justifying a "False" rating based on a lack of evidence.

More on the heroic Kucinich:

Kucinich’s staff noted that the study by Woolhandler and Himmelstein looked at administrative costs for the year 1999. Costs since then, they said, reflect "immense growth in (health coverage) plans more complicated to administer." Going back to 1970, the number of physicians has increased by less than 200 percent while the number of administrators has increased by 3,000 percent, according to the federal government and an analysis by Himmelstein and Woolhandler.

Kucinich's staff says it's more expensive now.  Isn't that proof enough?

How about a comment from an expert?

Woolhandler was lead researcher for the 2003 study of administrative costs. Since then, she told us,  "I think it is likely costs have gone up just a little bit as a share" of total expenditures. "The reason they haven't gone up hugely as a share is that they were so high to begin with."

So does that mean the annual cost could top $800 billion? Woolhandler told us she thinks Kucinich’s numbers are correct. But she, too, is offering an educated opinion, rather than a statement rooted in new numbers and up-to-date data.

I'd sure like to see the text of the Woolhandler interview.  How did PolitiFact present the material to keep Kucinich from looking entirely clueless?  And/or produce a Woolhandler quotation that hides Kucinich's cluelessness?

The problem with Kucinich's numbers should be entirely obvious.  The Woolhandler/Himmelstein study dealt in administrative costs in the health care system as a whole.  That means it counted things like physician compliance with Medicare documentation requirements and hospital administration--an entirely different category of expenses than Kucinich's "corporate profits, stock options, executive salaries, advertising and marketing, the cost of paperwork."  With the exception of the last one, anyway.

Kucinich, as noted above, seemed to be specifically targeting private insurance with his comments, since that's the only component of the health care system addressed by the new rules on medical loss ratios.  Kucinich played up the supposed savings in the private insurance market through an appeal to the costs of administration throughout the health care system--a classic misdirection apparently missed entirely by the media expert at PolitiFact.

Speaking of the media expert, he found that Kucinich basically saved the day:

So where does that leave him on the Truth-O-Meter?

• What is clear is that Kucinich’s main point, that a significant amount of the money spent on health care doesn’t go toward actual care, is accurate.
 
• The percentage figure and total dollars figure he cites both are close, but high, as compared to the primary source of data his staff provided us. He may not have overstated the numbers, given what has happened in the health care industry, but current data isn’t available. That’s a point that needs clarification for full understanding.

On that basis we rate his statement as Mostly True.

Kucinich's supposed point that a significant amount of money spent on health care doesn't go toward actual care is trivially true.  Hospitals and doctor's offices have to pay rents, leases, mortgages, salaries, insurance and all manner of things.  Kucinich's so-called point overlooks a fact plainly noted in the study on which he relied:

Administrators are indispensable to modern health care; their tasks include ensuring that supplies are on hand, that records are filed, and that nurses are paid. Many view intensive, sophisticated management as an attractive solution to cost and quality problems27-29; that utilization review, clinical-information systems, and quality-improvement programs should upgrade care seems obvious. However, some regard much of administration as superfluous, born of the quirks of the payment system rather than of clinical needs.

 PolitiFact finds his figures "close" and rates Kucinich's statement "Mostly True."  And now it's time for us to reconsider the earlier question.  What claim of Kucinich's are we checking?  PolitiFact checked Kucinich on an irrelevant claim and ignored the context of that claim.

As noted in the quotation of the study, administration is necessary to modern health care, so the fact that "health care dollars" aren't spent on health care per se (what a semantic mess) is irrelevant to the main point Kucinich was actually trying to make.  His real point was that the PPACA possesses features desirable for reigning in costs, and in doing so he carelessly mixed private insurance funds not used directly for patient benefits with the general cost of health care administration.  It's far from clear-cut that Kucinich has any leg to stand on at all regarding that point even potentially, but it's clear-cut that Kucinich's argument as presented was a total wreck.  Yet PolitiFact overlooked its significant flaws in favor of minor complaints about an irrelevant dollar figure.

Reporting this bad makes it difficult not to consider ideological bias as the direct cause of the giant blind spot.

The grade:

Tom Feran:  F


Afters:

In light of PolitiFact's choice for "Lie of the Year" for 2010, I experienced some amusement with the title of the New York Times article cited for this story ("Taking Control, G.O.P. Overhauls Rules in House") and with the language employed by Ed Schultz during his interview of Kucinich--stuff about giving control back to the insurance companies and special interests.  Come, now!  That type of language isn't appropriate, is it?  The GOP can't take control just by changing some rules, can it?  And since the federal government never took control of health care in the first place, it's ridiculous for Schultz to talk about repeal giving control back to private insurance companies.

It just goes to show how even those who should know better swallowed the Republican lies.  

Or something like that.

More Afters:

Almost forgot!  One of PolitiFact's Web pages featured a striking blurb for the fact check of Kucinich.  Observe:

See what I see?  Lower right:  "30 percent plus is the bitter corporate pill."  Message:  It's the evil corporations responsible for wasting that $800 billion.  The facts in the story simply don't support that conclusion.  The person responsible for that blurb earns an F grade in addition to those awarded above.