Fraser Institute bankruptcy mini study spins facts

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      The Fraser Institute’s motto is: “If it matters, measure it.” Mark Twain had a different take: “Lies, damn lies, and statistics.”

      It’s easy for statistics to become lies. A recent Fraser Institute mini study demonstrates how this can happen. This study was produced to contribute to the heated debate in the United States over Barack Obama’s proposal to bring in a publicly funded health-insurance option.

      One argument used to support a public option is that it would reduce the large number of bankruptcies experienced by Americans who have inadequate insurance to pay for expensive medical procedures.

      A 2007 national study by legal, medical, and sociological researchers found that medical expenses contributed to nearly two-thirds of all personal bankruptcies in the U.S. Most medical debtors were well educated, owned homes, and had middle-class occupations, the study noted. Three quarters had medical insurance but had accumulated large medical debts, lost significant income due to illness, or mortgaged their homes to pay medical bills. Some lost coverage when they changed jobs.

      An earlier study by the same authors noted that Canada’s universal health insurance resulted in lower bankruptcy rates.

      Not so, claims Brett Skinner, the Fraser Institute’s director of bio-pharma and health-policy research, and senior policy analyst Mark Rovere. If the 2007 national study is correct, they argue, because of Canada’s single-payer system, “we should expect to observe a lower rate of bankruptcy in Canada compared to the United States, all else being equal. Yet the most recent data shows that the non-business bankruptcy rate in Canada is statistically the same as it is in the United States.”

      But Skinner and Rovere don’t use the most recent data, which would undermine their case. They use data from 2006 and 2007 that shows bankruptcy rates being higher in Canada than in the U.S. In both years, the Canadian bankruptcy rate was 3.0 per thousand population. In the U.S., the rate was 2.0 per thousand in 2006 and 2.7 in 2007. Skinner and Rovere conclude that a publicly funded health-care system doesn’t lead to lower bankruptcy rates.

      Why, though, didn’t the Fraser authors use 2008 data? It’s not that it wasn’t available. The Fraser study is dated July 7, 2009, and the footnotes indicate they were checking Web sites up to June 17.

      The United States Bankruptcy Courts released its 2008 bankruptcy statistics on March 5, 2009, and the office of the superintendent of Bankruptcy Canada’s annual insolvency-rates Web page was last modified on March 10, 2009. Skinner and Rovere could easily have used the 2008 data.

      But this new data shows that in contrast to 2006 and 2007, the U.S. bankruptcy rate was higher than Canada’s.

      Nor is 2008 the only year American bankruptcies surpassed those in Canada. The Fraser study claims “we should expect to observe a lower rate of bankruptcy in Canada compared to the United States, all else being equal.” But all else is not equal. The U.S. revamped its bankruptcy law in 2005—the Bankruptcy Abuse Prevention and Consumer Protection Act—making it more difficult for consumers to declare bankruptcy. In 2006, the first year used in the Fraser study, American bankruptcy rates plummeted.

      In the six years before the law came into effect, the Canadian rate averaged 3.8 per thousand population, while the average American rate was 6.7 bankruptcies per thousand—nearly 75 percent higher.

      In fact, 2006 and 2007 are the only two years in the past decade in which Canadian bankruptcy rates exceeded the American ones. And they are the only two used in the Fraser analysis.

      Bob Lawless is a professor at the University of Illinois School of Law and a nationally acclaimed expert in bankruptcy and corporate law. In a post on, a blog for law professors and other experts in credit and bankruptcy, Lawless chastises the Fraser study for using bankruptcy rates for the total population rather than for the adult population (over 18). Despite the housing and financial collapses, not many 11-year-olds are declaring bankruptcy these days. Lawless allowed that the results would likely not be much different if Skinner and Rovere had used the more relevant adult population.

      Lawless accuses the Fraser authors of being “extremely selective” in their use of bankruptcy data. “By limiting the data to 2006 and 2007,” he concludes, “the report is able to support the anti–health-care-reform agenda that the Fraser Institute seems to further.”

      It mattered, and the Fraser Institute measured it.




      Jul 17, 2009 at 12:15am

      This is one of those times you have to call a spade a fucking shovel.
      "They spun..." is more aptly put as "They lied through their fascist loving, warmongering, poor bashing teeth..."

      The Big Lie(s) and the myriad variety and quantities of everyday lies have been foisted upon us by corporate interests and their swivel servant/pol lackies for so long they don't even make the effort to cover up their manipulations. In other words they have little respect for the intelligence of the average Canadian citizen any more.

      This growing epidemic of police lawlessness and their general disrespect for the citizens who pay their wages can be traced back to Mulroney appointing a sock puppet RCMP commissioner who acquiesced to Mulroney's demands to have his attorney General briefed weekly on the results of the ongoing investigations of (alleged) criminal behaviour by members of Mulroney's caucus. We should also be pressuring the Supreme Court to revisit their decision to allow police to lie to suspects.

      When your country and it's military and police establishments are growing fat off all the guzzling of greasy US imperial bathwater then you know that the bullshit hacks at Canwest/CTV and the likes of the third rate "think" tank..Fraser Institute et al are spinning like dervishes of deception on a daily basis..


      Jul 18, 2009 at 8:05pm

      Donald Gutstein, you have a very large and serious flaw in your opinion. That flaw focuses on the timing of the data of which you cry foul.

      The national study targeted by the Fraser Institute was for 2007. It is unreasonable and irrational to expect them to use statistical data newer than the date of the study they targeted including the dates of the study's original sample dates.

      In the study they target, they use 2006 and 2007 sample data and compare it to statistical findings they found about for the year 2001 to make their points.

      Somehow using the same sample period has produced an non-relative attack on their findings just like sleepswithangels has attacked Mulroney. If what sleepswithangels says is intelligent and that person is an average Canadian then I don't care if "they have little respect" for the average Canadian's intelligence. sleepswithangels, along with the OP appear to be average Canadians and worthy of Mark Twain's description.


      Jul 18, 2009 at 8:19pm

      SWA, you had me with your invective-laced intro but then lost me in the subseqent rant. I can't stand the Fraser Institute but I can't stand them because I hate people who (a) rely on dogma to fully inform their views; and (b) tell others that they possess the truth and that everyone else is wrong. Apply this anywhere you want - TFI, religion, political parties, etc. There's a better way to challenge these people without resorting to crazy-based hyperbole. But keep it up, you're off to a good start and we need more critical-based discourse on these sorts of things.


      Jul 20, 2009 at 11:05am

      mea culpa

      There is a missing element of cohesiveness in my initial rant but how does that exculpate the Fraser Institute from being extremely selective with their source material and manipulative with their published study(ies)?

      BC's concentration of right wing slanted mass media is a case study in journalism classes in other countries on the evils of corporate manipulation of "news" and the Fraser Institute is their frequent "go to" source for anything that will make rich people feel warm and fuzzy with bonus points scored if the poor and disenfranchised are shat upon and further marginalized.

      Oh I see! I'm a very bad boy. The Fraser Institute is infallible and would never lie or manipulate the truth in order to advance the aims of the elite right wing sector. That's why Pacific Press acts as their personal publicity machine and we all know how impartial Canwest/Global is.

      apologies to John Cleese


      Mar 10, 2010 at 2:32pm

      It might help if someone actually read the study and the related materials.

      The Fraser study doesn't hide the fact they picked only 2006 and 2007 for their study, they stress the fact. They also clearly explain their reasoning. Prior to the 2005 reforms (which took effect in 2006) bankruptcies in the US were much more easily declared than in Canada. Those reforms brought the US system much more into line with the Canadian one making the numbers more on par. Of course, those same reforms are at least partially responsible for the 2006 numbers being exceptionally low as many people rushed to file in 2005 to avoid the stricter rule so in fact 2007 would possibly be the only really representative year.

      As for 2008, that's also clearly explained as that was the year that the mortgage crisis hit the US. Canada was largely buffered from that bursting bubble due to our completely different financial system.

      You can argue all day over the veracity of their claims but it's a little hard to accuse someone of cherry picking data when they actually clearly explain why all the other data points are excluded.


      Jun 7, 2010 at 9:28am

      The problem with their comparison is that the bankruptcy figures cannot be assumed to be fully blamed on the healthcare system. The methodology for the calculation of the numbers seems OK but there is no causal pathway leading towards stating that the bankruptcies are related to public healthcare system. It would be better to compare the figures for number of bankruptcies related to healthcare system, which they stated earlier at somewhere between 12 – 17% and compare that to the Canadian rates, which I assume is around 2 – 3%. However, they do not use these figures even though they have the numbers.

      joe pierce

      Dec 31, 2010 at 11:25am

      Oh I see! I'm a very bad boy. The Fraser Institute is infallible and would never lie or manipulate the truth in order to advance the aims of the elite right wing sector. That's why Pacific Press acts as their personal publicity machine and we all know how impartial Canwest/Global is.

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