Medicine
(apologies to Mr. Swift)
Extensive research done by the Physicians for a National Health Program (PNHP), particularly by Steffie Woolhandler and David Himmelstein, have identified at least $400 BILLION in annual “waste” from our current system of health insurance (and, of course, lack of insurance for tens of millions of Americans). Drs. Woolhandler and Himmelstein are major advocates of a single-payer system, as am I (OK, I’m not so major!) and I have used much of their research in supporting single payer and in pointing out the limitations of a “public option”. Himmelstein, in his testimony to Congress (http://www.pnhp.org/news/2009/april/testimony_of_david_u.php) and in more detail on his PNHP blog (http://www.pnhp.org/campaign/materials/Refuting%20the%20Public%20Option.pdf) notes that a public option “…foregoes at least 84% of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes. They would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95% of Americans who are currently privately insured were to join a public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16% of the roughly $400 billion annually achievable through single payer.”
More than that, only a part of that 16% is actual insurance company profit, as noted in a letter to the New York Times (June 21, 2009) by Dr. Woolhandler: “Moreover, the savings on overhead from a public plan option are far smaller than you suggest. While it might cut insurers’ profits (which is why they hate it), that’s only 3 percent of the roughly $400 billion squandered on health bureaucracy annually.” (http://pnhp.org/blog/2009/06/25/paul-starr-and-steffie-woolhandler-on-the-public-option/).
Let’s think about that. We waste $400 billion a year in administrative overhead so that the insurance companies can make 3% of that, or about $10-15 billion. That is a lot of money, but it is also a high waste:profit ratio. We could just pay the insurance companies their $15 billion a year, maybe for a limited time (5-10 years, perhaps decreasing 10% per year, so they could get into some other business, perhaps cleaning up the environment or rebuilding infrastructure or teaching underserved inner-city children), and tell them to disappear, leave the debate, get out; then we do single-payer and save the other $385 billion.
Sounds like a good deal to me. And not so bad for the insurance companies, since they won’t have to work or bribe Congressmen! Sure, it is lacking in morality, but so was the bank bailout, and this is a lot cheaper. And it would get us a plan a lot better than any of those being tossed around by the administration and congressional committees.
Maybe we should go for it!
.
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Medicine
A Modest Proposal: Bribe the Insurance Companies
(apologies to Mr. Swift)
Extensive research done by the Physicians for a National Health Program (PNHP), particularly by Steffie Woolhandler and David Himmelstein, have identified at least $400 BILLION in annual “waste” from our current system of health insurance (and, of course, lack of insurance for tens of millions of Americans). Drs. Woolhandler and Himmelstein are major advocates of a single-payer system, as am I (OK, I’m not so major!) and I have used much of their research in supporting single payer and in pointing out the limitations of a “public option”. Himmelstein, in his testimony to Congress (http://www.pnhp.org/news/2009/april/testimony_of_david_u.php) and in more detail on his PNHP blog (http://www.pnhp.org/campaign/materials/Refuting%20the%20Public%20Option.pdf) notes that a public option “…foregoes at least 84% of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes. They would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95% of Americans who are currently privately insured were to join a public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16% of the roughly $400 billion annually achievable through single payer.”
More than that, only a part of that 16% is actual insurance company profit, as noted in a letter to the New York Times (June 21, 2009) by Dr. Woolhandler: “Moreover, the savings on overhead from a public plan option are far smaller than you suggest. While it might cut insurers’ profits (which is why they hate it), that’s only 3 percent of the roughly $400 billion squandered on health bureaucracy annually.” (http://pnhp.org/blog/2009/06/25/paul-starr-and-steffie-woolhandler-on-the-public-option/).
Let’s think about that. We waste $400 billion a year in administrative overhead so that the insurance companies can make 3% of that, or about $10-15 billion. That is a lot of money, but it is also a high waste:profit ratio. We could just pay the insurance companies their $15 billion a year, maybe for a limited time (5-10 years, perhaps decreasing 10% per year, so they could get into some other business, perhaps cleaning up the environment or rebuilding infrastructure or teaching underserved inner-city children), and tell them to disappear, leave the debate, get out; then we do single-payer and save the other $385 billion.
Sounds like a good deal to me. And not so bad for the insurance companies, since they won’t have to work or bribe Congressmen! Sure, it is lacking in morality, but so was the bank bailout, and this is a lot cheaper. And it would get us a plan a lot better than any of those being tossed around by the administration and congressional committees.
Maybe we should go for it!
.
- Poverty And Uninsurance Diverge: So Let’s Solve The Problem!
. Wyandotte and Johnson counties form the Kansas side of the Kansas City metropolitan area. Wyandotte, mainly Kansas City, KS, where I live, is an old “rust-belt” inner city, packing-house industrial city, and is the poorest county in Kansas. Johnson,...
- Dear Senator Brownback: A Letter My Kansas Senator
. Dear Senator Brownback: Thank you for the response to my letter urging your support for health reform, and particularly health reform based upon a single-payer mechanism, such as that proposed in the House’s “Improved and Enhanced Medicare for All”...
- Government Sponsored Health Coverage: The Good, The Cautionary, And The Ugly
The good news: The recent New York Times/CBS News poll (June 21, 2009, http://www.nytimes.com/2009/06/21/health/policy/21poll.html?em) demonstrates conclusively that, as the headline reads, there is “Wide Support for Government-Run Health”. “The...
- Health Reform And The "public Option"
. The debate on health care reform, at least in the inner circles of Washington and the punditocracy, has shifted to whether there will be a “public option” as President Obama has asked for. (e.g., “Obama to forge a greater role on health care”,...
- "the Nation"'s Health Care Bottom Line Is Bottom Of The Barrel
I was initially surprised at reading the editorial "Healthcare Bottom Lines" by J. Douglas Feder in the ostensibly progressive Nation (June 8, 2009) http://www.thenation.com/doc/20090608/feder. After rereading it I was both shocked and disappointed that...