Indeed. Here’s a post I made over in this thread (Why isn’t anyone actually looking to cut healthcare costs?), in response to a poster involved in the US insurance system who was explaining the need for administrative costs. My response was that most of those costs were solely the result of the unusual US system, and would be greatly reduced under a single-payer system:
In the single payer system where I live (Canada), medical offices only have to report claims to two different agencies: the provincial health insurance commission for the great majority of patients, and to the Workers’ Compensation Board, a different provincial agency, for treatment for work-related injuries. In practice, WCB is not a large portion of payments for medical care in the province. There is therefore only one set of codes needed, not over 100.
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If no one is doing an audit, how does the consumer or client know if they are being overcharged or if mistakes are being made or if someone is engaging in various forms of fraud?
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Here, the [del]consumer[/del] patient does not have any involvement in payment, since there are no co-pays or deductibles. The two clients (insurance commission and WCB) can and do conduct audits.
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There are drug rebates to various states. Many entities work out rebate agreements between drug manufacturers and clients. They, usually government entities, recoup some of their expenditures on drugs directly from manufacturers. These are processed and billed quarterly, with invoices going to various manufacturers, payments being collected, and disputes being resolved.
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The provincial governments have worked out a system for uniform drug costs across the country, for drugs used in the hospitals, by using their combined purchasing power, just like WalMart.
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You need to have people who interface with customers to answer questions about policies and charges, or provide information about constantly changing plans and coverages.
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Since coverage of medical matters is uniform and universal within a province, there is no need for that function in our system. [del]Customers[/del] Patients never have to ask those questions, since payment is made by the medical commission directly to the doctor or the hospital.
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You need to have the same thing for providers who call with questions.
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The provincial insurance commission is the one that sets the terms, so there is no need for this function in our system.
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I don’t see how you get out of administrative overhead. You can move it around a bit, but it can’t be eliminated entirely as long as some measures of accountability, review, and dealing with customers are required. It’s a sub-business within itself. A necessary one.
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Every system has administrative overhead. But the amount of administrative overhead multiplies the more complex your system. Administrative overhead in a single-payer system is much lower than a multi-payer, private insurance system.
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I can’t even imagine how, regardless of design or government, there isn’t a conscientious and detailed review of spending, payments, rebates, who is spending how much on what, and the like. You can’t get rid of that and still have a system that is accountable to the customer and to the taxpayer.
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Agreed, any system needs an effective audit system. However, the more complicated your payment system, and the more payors there are, the more complex and expensive the audit function becomes. Here, the medical insurance commission performs regular audits within the medical system, and has the statutory power to claw back over-payments. Because there is only one payer and one payment structure, audits will be much simpler and less expensive than what you are describing.
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