via First Things | On the Square by email@example.com (Keith Riler ) on 10/23/12
President Barack Obama, Planned Parenthood President Cecile Richards, and countless supporters have claimed again and again that Planned Parenthood provides mammograms. President Obama did so in the second presidential debate, describing the millions of women all across the country who rely on Planned Parenthood for . . . mammograms."
The problem is the mammogram claim is untrue, as was just cleverly highlighted by Schedule Your Imaginary Mammogram Day," a phone campaign that found no Planned Parenthood clinics capable of breast cancer screening. Planned Parenthood has neither the license nor the machines. The most the abortion giant has ever done is refer women to outside mammogram providers, filling the role of the Yellow Pages or Google.
Yet the claim is persistently made, despite its falsehood, in order to rebrand Planned Parenthood not as the abortion business it is, but instead as a health care provider.
Key to that health care narrative is the claim that Planned Parenthood provides substantial cancer-screening services, such as mammograms. (Apparently the pap smears Planned Parenthood really does administer are insufficient fodder for the narrative.)
Why doesnt Planned Parenthood just offer mammograms? Doing so would do real good while saving their public defenders from credibility diminishing lies.
The answer may lie in what economists call the contribution margin." The contribution margin of each procedure is the marginal profit per unit of sale and thus the amount each procedure contributes to the coverage of fixed costs (such as executive compensation) and to profits.
The problem for Planned Parenthood-which thinks and acts much more like a business than most people realize-is that mammograms are much less profitable than the relatively lucrative procedure of abortion.
In his article Mammography: Is its success threatened by low reimbursement rates?", radiologist Dr. James Youker highlights the problem of low reimbursement rates for mammography and the high cost of complying with the increasingly complex regulations." A more recent article by Dr. Gillian Newstead documents the problems persistence:
The American College of Radiology (ACR) conducted a survey that . . . found that the actual cost to perform a screening mammogram was $93.98. With the typical reimbursement rate of approximately $80, it is clear that the hospital lost money for each screening exam performed.
In the outpatient setting, where the costs can be more controlled, the survey found the cost per mammogram to be approximately $59.00. Nonetheless, it is clear that there are no large profits to be made from screening mammography.
Another economic study . . . found that in all practices mammography had a negative profit margin. The loss for physician full-time equivalent (FTE) was variable between the practices studied but was between $50,000 and $100,000 per year.
Since Dr. Newstead penned her article, digital mammography has replaced older technology. Although digital reimbursement rates are 1.7 times greater than film rates (at $140 per screening), digital machines are three to five times more expensive. Thus, mammography economics have improved little to none.
RadNet, the countrys largest imaging and diagnostic company, comments in its most recent presentation that mammogram volumes have been adversely affected by the economy and a government taskforce changing the recommended age from 40+ to 50+." RadNet also comments that it expects continued pressure from Medicare" on reimbursement rates.
If Planned Parenthood were to perform mammograms, we could assume a contribution margin-that is, contribution to profit-of $3.51 per procedure. This is reflective of the average of Dr. Newsteads hospital and freestanding center margins of a $13.98 loss and a $21.00 profit, respectively. Even this may be generous, particularly given Dr. Newsteads comments about mammography losses and the fact that many industry experts describe the modality as unprofitable.
How profitable is abortion? Two scenarios can be used to estimate Planned Parenthoods abortion contribution margin, Scenario A and Scenario B. In both scenarios, 330,000 annual abortions were assumed.
The retail price of an abortion is $500 to $900. The $500 floor was documented some years ago, and is the price that was used in Scenario A. Planned Parenthoods Hudson-Peconic clinic quotes an online price of $900 for a sixteen- to seventeen-week in-clinic abortion. A $900 price was used in Scenario B.
Regarding costs per abortion, data is available from Planned Parenthoods most recent annual report. In that report is a line item entitled Expenses - Medical Services," which should reflect the variable costs associated with procedures like abortions.
These medical service expenses totaled $699 million in the most recently reported period. Two methods are used to allocate that expense to Planned Parenthoods abortions. In Scenario A, Planned Parenthoods own estimate of abortions as 3 percent of services is used. In Scenario B, a 5 times higher expense allocation of 15 percent is assumed.
This 15 percent expense estimate is conservative because abortion doctors use low-cost vacuums and garbage bags; forceps and scissors are reused; and (unlike a mammogram) an abortions result requires little in the way of interpretation or follow-up. Planned Parenthood makes about $400 to $600 per abortion. Scenario As $500 sale price and 3 percent cost allocation results in a contribution margin of $436 per abortion. Scenario Bs $900 sale price and 15 percent cost allocation results in a contribution margin of $582 per abortion.
Abortion is 125 to 165 times more profitable than mammography. Given a choice between 330,000 mammograms or 330,000 abortions, cancer screening will lose every time. Life, love, families, faith, concern for our most vulnerable, presidential credibility: Abortions altar demands many sacrifices. There is no reason to believe mammograms are exempt. Mammograms were invented over forty years ago and Planned Parenthood still doesnt offer them because, in comparison, abortion is a gold mine.
In 2009, a government task force recommended regular mammograms only for women fifty years and older. Planned Parenthoods target audience is young-75 percent of abortions are by teens and twenty-somethings. Planned Parenthoods demographic is unlikely to ever demand breast care.
Mammograms are an unprofitable imaging modality, requiring a cross subsidy from technologies like CT, PET, and MRI. Likewise, Planned Parenthood mammograms would require a similar cross subsidy; requiring a reduction in abortion profits, executive compensation, or both.
On that point, President Obama once argued that health insurance profits were driving up the costs of health care and suggested that eliminating those greedy companies profits and fat salaries would improve health care.
The same could apply here. Cecile Richards earns about $400,000 per year, her directors and top lieutenants are clearing $200,000 to $300,000 each, and ten clinic administrators make over $260,000 each. For forty years and counting, these executives have shown no inclination to offer mammograms. The simple reason is that economics have prevailed.
Keith Riler is a financial analyst who has written for the American Thinker, Faith magazine, Texas Right to Life, and LifeNews.
Thousands call Planned Parenthood for mammograms after Obamas claim
Oops! Obama Accuses Planned Parenthood of Breaking the Law
Schedule Your Imaginary Mammogram Day
James Youker, Mammography: Is its success threatened by low reimbursement rates?"
Gillian Newstead, Digital mammography: Cost and workflow issues"
The Mammogram Hustle
2012 Medicare Physician Fee Schedule Payment Rates: Mammography
Digital Mammography Now?
RadNet Investor Presentation
New Planned Parenthood Annual Report Confirms Abortions Total 91% of Pregnancy Services
How much money does an abortion cost?
Planned Parenthood Hudson Peconic Cost Calculator
Planned Parenthood Federation of America: Annual Report 2009-2010
Planned Parenthood" on FactCheck.Org
Facts on Induced Abortion in the United States
Obamas Profit Problem
Planned Parenthood and the Demand for Abortion