2016 Postmortem
Related: About this forumUS Health Care Is So Expensive Due to High Administrative Costs of PRIVATE Health Insurers
http://economix.blogs.nytimes.com/2008/11/21/why-does-us-health-care-cost-so-much-part-ii-indefensible-administrative-costs/
The United States spends nearly 40 percent more on health care per capita than its G.D.P. per capita would predict. Given the sheer magnitude of the estimated excess spending, it is fair to ask American health care providers what extra benefits the American people receive in return for this enormous extra spending. After all, translated into total dollar spending per year, this excess spending amounted to $570 billion in 2006 and about $650 billion in 2008. The latter figure is over five times the estimated $125 billion or so in additional health spending that would be needed to attain truly universal health insurance coverage in this country.
One thing Americans do buy with this extra spending is an administrative overhead load that is huge by international standards. The McKinsey Global Institute estimated that excess spending on health administration and insurance accounted for as much as 21 percent of the estimated total excess spending ($477 billion in 2003). Brought forward, that 21 percent of excess spending on administration would amount to about $120 billion in 2006 and about $150 billion in 2008. It would have been more than enough to finance universal health insurance this year.
The McKinsey team estimated that about 85 percent of this excess administrative overhead can be attributed to the highly complex private health insurance system in the United States. Product design, underwriting and marketing account for about two-thirds of that total. The remaining 15 percent was attributed to public payers that are not saddled with the high cost of product design, medical underwriting and marketing, and that therefore spend a far smaller fraction of their total spending on administration.
One of these is an earlier McKinsey study explaining the difference in 1990 health spending in West Germany and in the United States. The researchers found that in 1990 Americans received $390 per capita less in actual health care but spent $360 more per capita on administration.
A second, more recent study of administrative costs in the American and Canadian health systems was published in 2003 by Steffie Woolhandler and David Himmelstein in The New England Journal of Medicine in 2003. The study used a measure of administrative costs that includes not only the insurers costs, but also the costs borne by employers, health-care providers and governments but not the value of the time patients spent claiming reimbursement. These authors estimated that in 1999, Americans spent $1,059 per capita on administration compared with only $307 in purchasing power parity dollars (PPP $) spent in Canada
Two studies using more detailed bilateral comparisons
dogman
(6,073 posts)Can you imagine if you were offered a 10% savings on your bills?
Hoyt
(54,770 posts)health care expenditures from the current $3 Trillion to $1.38 Trillion.
Your source says $150 Billion is attributed to "excess" Admin. OK, let's reduce $3 Trillion by $200 Billion "excess admin." So now, all he has to do is cut expenditures from $2.8 Trillion to $1.38 Trillion. Where the heck does that come from. Truthfully, I think you'll find there is a lot of admin in Medicare for all, maybe no $200 Billion, but certainly not a minimal amount.
I've been for single payer since 1980, but Sanders is not being honest about the cost and how we finance it. He needs to come out and say -- we are going to slash provider payments; increase taxes a lot more than he's been saying; put restrictions on utilization, covered service, drugs, etc.; patients are going to have to become more responsible in how/when they seek healthcare, etc. Then, he's being honest. Oh, and he needs to be frank about anything like his proposal passing Congress in the foreseeable future.
amborin
(16,631 posts)corporations
Hoyt
(54,770 posts)enough to keep from having to at least double what Sanders projects average folks' taxes will need to increase to fund his plan. He needs to be honest about the cost of all his proposals.
amborin
(16,631 posts)Hoyt
(54,770 posts)Avalon Sparks
(2,566 posts)Yup, that's the ticket
jwirr
(39,215 posts)Scuba
(53,475 posts)Roaberner
(19 posts)I like Obama.. But ACA (Obama care) is horrible!
dsc
(52,166 posts)yes, adminstrative costs are a problem but even the article says they are only a fifth of the problem and frankly that is the highest estimate of that problem I have seen. The main culprets in our high costs are hospitals and doctors both of which are priced way higher here than anywhere else.
PowerToThePeople
(9,610 posts)The takers have taken nearly the whole pie already. There isn't enough capital left with the makers for them to continue supporting themselves.
Societal collapse is inevitable.
Unless #Bernie2016
liberal_at_heart
(12,081 posts)area51
(11,918 posts)We need to transition to single-payer.