Ok, I am sorry but that number has been bugging me. It looked far too low. I finally had the time to look up the link, and the study it referenced.
As far as I can see, that number is from the study in the New England Journal of Medicine, august 21 2003. Which uses numbers from 1999. The same study finds administration to be 31 % of the total US costs. Brought forwards to 2013, the CDC estimates the US total healthcare costs to be 2,9 trillion.
So if administrative costs remain the same fraction, they would have been about 1 trillion in 2013. It is worth noting that the same study finds Canadian administrative costs to be 30 % of the US ones, which would indicate a potantial saving of 700 billion.
Possibly. However, the economics of scale works for countries just as they do for businesses. And that indicates that it should be cheaper for the US to provide healthcare to its citizens than the UK. Also…I mentioned Taiwans implementation of UHC earlier in the thread. How they drew on the experience of countries which had had UHC for a long time, and picked what seemed to work best.
Being able to look at 50 -100 years of adminsering UHC, what has worked and what didn’t would allow the US to avoid a lot of the initial missteps.
Did you read the opening posts of the thread? It is about the US having switched over to the Canadain system. Its been detailed where the US system spends more than the Canadian one, and where the potential savings are. Once again the major ones are administration, medical waste and infficinecy and health care insurance companies. The minor ones, which is unlikly to be touched much are defenive medicine, tort and hiher salaries, but they only total about 15 % of the difference.
We’re gonna have to re-think this whole “greatest country on earth” thing if we can’t even run a fucking health care system for which the blueprints already exist.
Well, the US does run a healthcare system, and rather well, it would seem. You simply assume that healthcare should be for everyone. The US system is not predicated on such fairy tale notions, it is designed to provide care to those who deserve and ration or restrict it for those who do not deserve it. It even defines the metric by which desert is calculated.
Health care is about improving life. Life is unfair. Why then should we expect healthcare to be fair? That would just be communistical.
The numbers I feel are unsupported are the 1.4 trillion dollars in savings that canadian style UHC will supposedly bring. Where are those savings coming from?
Medicare fraud comes from doctors and hospitals billing Medicare for work that is not performed either with or without the patient’s knowledge, billing Medicare for more expensive work than the work actually done, or providing medically unnecessary work. None of this is about the interoperation of the various parts of the system but operates in the part of the system where the US government pays directly and is most like the Canadian system.
Of course the government negotiates what is covered and what is not and for how much. For example, prescription medication and home health care are not covered. Eye exams are only covered for children and the elderly. That all had to be decided and negotiated. The fee for each service also has to be determined. That is negotiated.
Having more than one doctor on a block means you can be seen quicker. The US has four times the MRI machines per capita and three times the CT scanners per capita and 25% more doctors per capita. All that means you can be seen quicker and get your results sooner. People in the US are used to that level of service and if you tried to cut the number of MRI machines in the US by 66% patients and doctors would raise cain.
This is what people don’t understand about medical expenses in other countries versus the US. The reason prices are different is that over decades other countries were able to slow the rate of growth in medical expenses by being slower to adopt technologies and slowing the rate of reimbursements. If the US switched to Canadian style healthcare it is possible that in forty years the savings could be large but switching would not immediately would not save any money. For example, a slowing the rate of rise in a doctor’s salary from 5% to 3% starting from 50K would save 40K per year at the end of twenty years. However, at the end of the twenty years cutting 40K from a doctor’s salary would not be politically viable.
Estimated cost of Medicare part A in 1990 9 billion dollars, actual cost 67 billion dollars.
Estimated cost of all Medicare in 1990 12 billion dollars, actual cost 98 billion dollars.
Estimated cost of home care benefits in 1993 4 billion dollars, actual cost 10 billion dollars.
Estimated cost of special hospital subsidy in 1992 100 million dollars, actual cost 11 billion dollars.
Be wary of cost estimates in healthcare.
I have no truck with your numbers. As I said, my back-of-envelope calculations assume the most conservative inputs for current US spending and the most liberal ones for the UK, and still indicate that the UK system is far cheaper.
… How about taking a look at the SCORES of UHC systems around the world that use government to make the system cheaper and more solvent?
Even Singapore, which has an extremely low cost healthcare system using private medical savings accounts has a GOVERNMENT MANDATE - REQUIRING 20% of you paycheck be set aside to put into that account.
It’s still using government to facilitate aspects of the system, there is no totally laissez faire healthcare system that I’m aware of that competes on cost and outcomes with government systems.
Another link I saw said MRI was 5x as expensive in the US as in France. If we have so many of the machines, they should be cheaper, right?
You’re a doctor. Your hospital bought an expensive MRI machine because the competing hospital five blocks away has one too. And you can’t send your patient there, can you? Your administration needs to pay it off, so it needs to get that machine used. So you are under pressure to prescribe the test. The patient doesn’t pay much, the insurance company does. And it isn’t even unethical, since you’d rather be absolutely sure. As Gadwe said, no doctor stays awake at night worrying about too many tests, they worry about not doing a test and missing something.
Result - lots of busy MRI machines testing patients who don’t need the tests, and more expensive health care.
You are incorrect about Singapore. The forced savings is 36% total but only 7% is reserved for healthcare.
There are no laissez faire healthcare systems to compare government healthcare systems to. I do not think that democracy is compatible with laissez faire healthcare, that is a shame but that is reality.
I would love it if the US changed to Singapore’s system. Over time we would get much lower health care costs and much better outcomes. I would even settle for Switzerland’s system. What the best systems in the world have in common is not that they are government controlled but they require citizens to pay with their own money. Empowered consumers are the best way to get quality and low prices. The US system is set up in such a way that consumers are not empowered at all. That is why it costs so much.
The question under debate was not choose a country to model the American healthcare system after but about whether switching to a Canadian style system would save money faster than anything else. The answer to that question is no. This is because the reason other countries systems are cheaper is that over decades they were able to slow the growth in cost by restricting patient choice and provider reimbursements. The only fast way to cut cost by switching to a Canadian style system is to first build a time machine and go back forty years and make the switch. Switching now would just add all of the current costs to the government, and the deadweight losses of higher taxes would more than make up for any admin savings even under the rosiest scenarios. Meanwhile there would be lots of transition costs as the federal bureaucracy tries to cope with the new duties. Then the congress would have to get its act together to fight the special interests to actually start reducing the amount of money spent on healthcare. The earliest I could see money starting to be saved was ten years and that is optimistic.
You’re a politician. You read that too many people get tests they don’t need and so you propose legislation restricting the amount of tests people can get with government money. The MRI institute starts running commercials featuring people whose cancers were cured because of early detection by MRI machines. “Senator Voyager wants people like me to die so he can save money and give it to his fatcat backers”. Your popularity drops, the bill is defeated. Senators fall over themselves to back a bill doubling the money spent on MRI machines lest they be labeled a part of Voyager’s War on Medicine.
Result - lots of busy MRI machines testing patients who don’t need the tests, and more expensive health care.
Assuming a smooth switch to a Canadian-style system is managed -and I admit that is a pretty huge assumption- Canadian administration costs are about 31 % of US ones. And the US spends about 33 cents out of each health care dollar on administration, 1 000 billion. So that is 700 billion.
Medical waste and inefficiency are generally listed as the second biggest cost-adder, and is very close, so figure another 5-600 billion there.
Of the remaining amount, a lot would be made up out of health care insurance overhead -admittedly the line between that and administrative waste is pretty blurry- and lower cost for prescription drugs. Now, I don’t actually believe that the full amount could be reached, because some of that money gets spent due to factors in the US that is not directly related to the health care delivery system. Factors such as higher salaries for medical staff, tort and defensive medicine.
However, it does not seem unrealistic to project savings on the order of 1 200 - 1 500 billion.
No -the fraud is about billing. Emphasis mine. Which we hardly do. Over here, if you work in government healthcare, you don’t bill anyone. The patient comes in, you pull out the patients file, you do what seems medically appropriate, the patient leaves, you update the journal and put it back.
There is no billing. I realize this may be hard to wrap ones head around from the perspective of the US system. Think of it as similar to the high school system, but with more labs and a better pupil-teacher ratio.
(Caveat - the private healthcare system here does bill, and there are co-pays through the public system. These are on the order of 10 - 50 per visit and capped at 300 per year. Normally they are paid in cash, possibly coins.)
I don’t really imagine the Canadian system is that different, perhaps posters from there can enlighten us? How much billing goes on in the Canadian system?
And medically unnecessary work -you know, you don’t get to bill for it. You are on a salary. That makes it much harder to do any fraud.
Whereas the default elsewhere is that everything is covered unless specifically excepted -no negotiation- and there is no fee for services. No negotiation. So no.
Once again, I don’t think you understand how a NI or Beveridge type UHC system works. Just mentioning billing and negotiation… these are huge areas of the US system, and they are such small parts of these systems as to be negligible. That is kind of the point I have been trying to make.
This is actually a legitimate issue with the choice of Canada as a system to emulate, and how to implement that. One of the reasons Canada’s system is not normally considered the best system for the US to switch to.
Of course, as I read it, this thread is about the hypothetical of the US already having switched to the Canadian system, so reasons why it wouldn’t really belong in a different thread.
Well, no again. Reimbursement of medical staff is really not a larger factor in healthcare costs, and I’m really not sure how you can reason that speed of adopting new technologies is a big factor.
Doctors salaries are really not a big cost-driver. What drives costs is the number of administrative jobs doing billing, negotiating, liaising, credit-checking, filling in forms, chasing down payment, etc, who represents a huge expense by their sheer numbers. And who don’t exist in other jobs.
Look, lets go with the high school metaphor:
Other countries run health care systems similar like the US does high schools. They are publicly financed institution, with public employees working there, and buildings and equipment bought by some layer of the government. Almost all countries also have a few private schools for parents who can pay and feel their kids are better off there.
They teach a central curriculum covering all the major subjects. The students and parents don’t get billed. No-one negotiates.
The US healthcare system works like the parents have to pay for each lesson, or buy a plan that covers some subjects at a co-pay for each lesson. With no central curriculum, one school may not do maths, another may not do English. And you are not enrolled in any particular school. There are no set fees, its all negotiable. Parents much be credit-checked, billed, payments agreed on and chased down.
That metaphor actually undersells the chaos of the US system because it does not cover all the interactions between the financers and providers in the US system.
It would have been interesting to see your cites on these figures but since you did’t give any, I found one for the first claim.
The Medicare part A 9 vs 67 billion dollar claim was made by Jim DeMint in a 2013 WSJ piece where he compared original pre-Medicare estimates in 1965 without any inflation adjustments. The Washington Post fact-checked and awarded its coveted “Three Pinocchios” rating.
Worse yet for DeMint, those figures were first used by Ross Perot in a 1994 debate with Al Gore. At that time, the claim was thoroughly debunked by Robert J. Myers. Who was the long-time Social Security actuary who developed the original estimate for the House Ways and Means Committee.
I agree that estimates are hard to make, eapecially about the future (thanks Yogi!) but unless you have better cites these appear to RW talking points.
There is billing in the Canadian system. Doctors submit what procedures they did over the month and the provincial plans pays a set amount for each one.
Thank you. Is there an estimate of how much time gets spent on this ? I am in the private sector in Norway and we use about four days for one secretary in a year.
There is billing in the UK system too, but it’s not as complicated as that. NHS primary care contractors are paid based on the number of patients registered with their practices. The last time I knew, it was based on demographic factors in the community and such. Non-GPs are all salaried employees of the NHS.
For the record, I’m not tied to a specific UHC scheme, just something different from what we have.
And the singapore example should be fascinating to many people, both liberals and conservatives.
Conservatives tend to like it as it’s an alternative to the welfare state, but that forced savings is still a government mandated imposition on people. Instead of having the government divy up the funds, it forces people to be financially responsible with their savings. The home ownership stats are phenomenal, I had no idea they were over 90% home owners.
And the exact numbers I mentioned were not right, 20% personal savings, and 16% from the employer to get to a total savings of 36% (where some of that can be used for home purchases ?!? built in good behavior for financial stability )
But the employer does not negotiate directly for health insurance like the US model, it and the people use their own funds they are FORCED by the state to withold to pay for healthcare in terms of out of pocket expenses, and they are mostly insured for catastrophic coverage with the incidentals taken care of by the fund.
I would not mind that system, hell, if that kind of model could help allow more people to own homes, even better. But you see, I’m flexible, I am open to virtually anything that works, I don’t start from the outset trying to “conserve” what we have and presume that it’s better than all the other alternatives.
This is what we need to get conservatives on board doing, taking a good hard look. When I hear them talk you’d think the status quo was just fine with what we have. They will come up with endless problems with the alternatives of foreign powers and spend no time on our own systems faults, or better, do a comparison to see if the alternatives offer a better combination of perks compared to what we have.
Avik Roy - a conservative healthcare policy writer sounds FAR closer to Ezra Klein in this one on one talk, but hearing him on conservative talk radio he just highlights the flaws with the alternatives to what we have, and never makes a credible case that we’d be BETTER off switching to something different.
This is an absolute disgrace, we have to find a way to get the message out to the potty trained conservatives. He's one of them when you sit him down away from the peanut gallery of "government bad" zombies. But when they discuss things it gets dumbed down the point of a cartoon discussion.
I don’t know if a Singaporean system would be the best system to transition to, I do think path dependence matters in terms of easing the transition, but conservatives are missing in action on these discussion aside from REPEAL OBAMACARE. And replace with the free market (translation, let the market decide, and if you are broke and dying, tough - We don’t CARE if there is a better way - if there is a single drop of government blood in a proposed solution it’s off the table).
But these are actual numbers, not “cost estimates”. Besides, as pointed out in post #114, your numbers appear to be bullshit. Not that it even matters.
Sure, but it’s negotiated on a one-time basis. The private insurance system negotiates and adjudicates every damn time anyone makes a claim!
The implications of this one fact are profound and anyone who understands health care economics will recognize that this one factor alone cascading down through the system is responsible for both the cost-effectiveness and the efficacy of public health care systems of the single-payer type. Nor should it be confused with a “one size fits all” model because it’s exactly the opposite. In single-payer systems the doctor is the trusted gatekeeper to health care services; the single-payer insurer has neither any interest nor even the mechanism to argue with a doctor’s clinical judgment for mercenary reasons of cost savings, something that private insurance companies do routinely and constantly, and then, perversely, they get the patient to pay for the privilege of having their claim scrutinized and possibly reduced or denied.
There is absolutely nothing about a private insurance system that would encourage more doctors. Indeed some years ago there was a passionate editorial in a medical journal suggesting the exact opposite: that the hassles and complexities of getting paid in the dysfunctional mess that is the US health care system is actually discouraging young people from medical careers.
And having an excess of diagnostic imaging equipment isn’t a virtue. With some of these machines costing millions of dollars, plus the cost of technician salaries, the cost of idle time is enormous, and someone has to pay for it. Excess capacity is a vicious circle: it drives up costs, and it exists because rates are so high that excess capacity is still profitable. Meanwhile it does absolutely nothing for effective health care. If you have to wait weeks for routine imaging that is clearly not time-critical, so what – that’s effective queuing theory at work. If you have something that has even a chance of being serious and time-critical, you don’t wait. It’s win-win for both efficiency and efficacy.
Right. Single-payer is often confused with government-run health care. Doctors in Canada are almost all in private practice and, like any private sector service provider, they bill for services rendered. The beauty of the Canadian system is that the patient never even sees the bill, and never even opens his wallet in a medical office except to take out his health card, and never fills out a form.
The overall scope of coverage was not negotiated with the doctors. It’s set out in the Canada Health Act and the corresponding provincial acts, as being every medical service provided by doctors, either in their clinics or in a hospital, plus the other services provided by the hospital. That’s why things like prescriptions, eye care, dental care and home care are not included in medicare - those aren’t services provided by doctors. That was the basic policy decision made by the federal government when it instituted the national framework for medicare back in the 1960s.
However, there are negotiations in each province on the fee structure. The provincial governments and the doctors review the fee structure on a regular basis, every year or so. The negotiations aren’t binding on the governments, because they set the fee structure unilaterally by regulations, but there are negotiations.
