The success of The Right in damaging some of themselves and most of the rest of us can be seen in the strange situation we have with health care coverage. Here we have in one of the rich industrialized countries, a system of health care which many of us can't even afford and which many more of us access through expensive, cumbersome, inefficient, frustrating insurance plans. Most of us will face hardship if we are faced with serious, ongoing health problems because we will have to start juggling our money to cover health costs. Yet in most other industrialized countries, nobody considers that they will become poor because of health problems or that they will have more severe health problems because they are poor. It's a no-brainer, but not for us.
You can take almost any aspect of medical care and single-payer systems do it better for less. Let's examine, for a start, administrative costs.
Administrative costs of health care:
If in the United States we streamlined our administrative costs so that they matched Canadian levels,
- we would save $286 billion of the 1660.5 billion we spent in 2003.
- This would leave $6940 for each currently uninsured person in this country, quite enough more than is necessary for them to be covered.
How large a percentage of our bill are administrative costs?
- In 1999, administrative costs of health care in the United States were 31% of the total costs. In Canada, they were 16.7%.
- For US insurers themselves, overhead was the highest for investor-owned Blue-Cross/Blue-Shield plans (26.5%), second highest for commercial carriers (19.9%) and lowest for government-run Medicare (3.1%), the closest thing we have to a single payer system.
Our administrative costs are due to:
- the fact that we have more than 1200 private health insurers in the US which each have varying numbers of kinds of coverages. This causes "fragmentation, inefficiency and dupicative bureaucracy" because hospitals, clinics and doctors offices have to sort through thousands of different forms dealing with different amounts and types of coverage, different regulations on coverages, different requirements for documentation, different rules for eligibility, different copays, etc. etc. A study cited in more than one article finds that in Seattle, 2000 patients with depression were covered by 189 different insurance plans and 755 different policies.
- Private insurance requires functions that are not necessary in a single-payer system:
- Underwriters
- Marketing
- corporate incentives to increase profits by erecting hurdles to payment such as complicating and stalling payment so that companies can hold their money longer and so that some hospitals and clinical offices will give up trying to recover payments.
- Having to bill a multiplicity of insurance companies and institutions means that hospitals cannot pay a lump sum, and have massively complex accounting costs.
The National Center for Policy Analysis, a Dallas-based think tank tightly tied to supporting The Right has tried to challenge the conclusions about bureaucratic costs attributable to our private system of insurance. The Right's position is laid out in Twenty Myths about Single-Payer Health Insurance: International Evidence on the Effects of National Health Insurance in Countries around the World by John C. Goodman and D.M Herrick(see below) and elsewhere. Goodman and Herrick say the conclusions of single-payer supporters are based on three false assumptions:
- That low costs are considered to be synomymous with effectiveness.
- That higher costs of private insurance bureaucracy result in worse outcomes.
- That the relatively low cost of bureaucracy results in better incomes.
Additionally, they claim that they assume that "administrative costs do not produce offsetting benefits. Among the benefits of the plethora of private insurance providers, say Goodman and Herrick, are:
- the ability to appeal to different tastes and preferences among consumers for amenities such as varied levels of copayment, choice of physician network, limited waiting for physicians visits, etc. (I have to interject here that I never thought of any of the above as amenities...more like juggling what I could afford.)
- the administrative use of a portion of the funds to ensure that "the remaining funds are spent wisely providing quick and convenient service."
- the control of "moral hazard (e.g. the tendency to overconsume when the service is perceived as being free rather than rely on the Canadian approach of using waiting lines as a method of rationing services.)"
- According to Goodman and Herrick, we actually save bureaucratic costs because we don't have hidden administrative costs such as to cover the costs of "rationing by waiting," wasted resources because national health systems have "perverse incentives", the Canadian fee structure (and others for national health plans) makes patients make multiple, and therefore more expensive, visits. (Incentives!!! Legitimate incentives for The Right are pretty much limited to the thrill of competition and profits. These folks promote "entrepreneurial providers in an unfettered marketplace and direct access to specialists and specialty services based on the willingness to pay.")
In his article, Myths and Memes about Single-Payer Health Insurance in the United States: a Rebuttal to Conservative Claims, (see below) John P. Geyman demolishes Goodman's and Herrick's "myths." After pointing out that they present data either from biased sources or no data, he presents the following comparison of specific adminstrative costs per capita in US dollars and provides the source, a study in The New England Journal of Medicine:
- Insurance overhead: U.S. 259, Canada 45
- Employer's cost to manage health benefits: US 57, Canada 8
- Hospital administration: US 315, Canada 103
- Nursing home administration: US 62, Canada 29
- Administrative costs of practitioners: US 324, Canada 107
- Home care administration: US 42, Canada 13
Total US 1,059, Canada 307
Here I have only dealt with administrative costs. I haven't touched the stuff that really matters: cost, availabilty and quality of medical care. But it should be clear from just the examinationof administrative costs that many of them have to do with trying to maintain a multi-party private system of insurance based on competition and profits. The trends indicated here continue throughout.
The two main sources I used:
Geyman, John P. Myths and Memes about Single-Payer Health Insurance in the United States: A Rebuttal to Conservative Claims, International JOurnal of Health Services, Volume 35, No. 1, pp 63-90, 2005. It is available online for a fee at:
http://baywood.metapress.com/app/home/contribution.asp
Goodman, J.C. and Herrick, D.M., Twenty Myths about Single-Payer Health Insurance: International Evidence on the Effects of National Health Insurance in Countries around the World, National Center for Policy Analysis, Dallas, 2002.
