Health Care Hits a Gusher

Page A17 of this morning's Wall Street Journal (subscription required) has an interesting chart headlined "Oil Hits a Gusher." It shows that fourth quarter profits for U.S.-based oil companies rose a stunning 66.4 percent over a year ago, and accounted for nearly two-thirds of the entire $20 billion increase for all corporations.

The chart was buried in a story about China's increasingly voracious appetite for oil, which is predicted to continue to push up oil prices. Coupled with today's front page story in the New York Times revealing that the oil and gas industry will reap an additional $7 billion in windfall profits courtesy of the taxpayers, it's enough to give one a headache.

But what also caught my eye was the other really long bar in the Journal chart. Health care corporations increased their profits in the same quarter by 68.5 percent -- two full percentage points more than Big Oil! And that accounted for another 30 percent of the increase in total corporate profits in the fourth quarter.

In other words, Big Oil and Big Health got it all (utilities accounted for most of the rest). Whose profits fell? Telecommunications, Basic Materials, Consumer Goods and Industrials . . . you know, the things people want, but might postpone when their gasoline, heating and health care bills rise exponentially.

So what accounts for this rapid increase in health care profits? Perhaps Big Health will take a page from Big Oil's playbook and blame it on the Chinese.