Friday, June 8, 2012

Test Your Knowledge About Single Payer Healthcare

Test Your Knowledge About Single Payer Healthcare – Answers

1.      50,000,000. A great wealth of information on the uninsured is available at Kaiser Family Foundation’s website.

2.      Also 50,000,000. The challenges of the uninsured are discussed well in Too Great a Burden, Families USA, December 2007. They report that in 2007, 10.9 million uninsured Americans spent more than 10% of their income on healthcare, but shockingly, that same year 50.7 million Americans who had medical insurance also spent more than 10% of their income on healthcare.

3.      62% of bankruptcies are due to medical expenses. Himmelstein et al. Am J Med. Aug. 2009

4.      Over 75% of the medically bankrupt had medical insurance at the onset of their illness. Himmelstein et al. Am J Med. Aug. 2009

5.      44,798 Americans are estimated to die each year from lack of insurance. Wilper et al. Am J Public Health 2009

6.      Private insurance overhead and profit, on average, fluctuates between 12% and 14% nationally. This figure is somewhat lower than the 16-20% at many of the big insurers because it includes self-insured plans of many big employers that have overhead of about 6-7%. On the other hand, overhead in the individual market is often substantially higher than 20%, and in some cases above 30%. The estimate that total administrative costs consume 31% of U.S. health spending is from research by Drs. David Himmelstein and Steffie Woolhandler and published in the New England Journal of Medicine in 2003. The figure would undoubtedly be higher today. Insurance overhead accounts for a minority of the overhead. Much more occurs in physicians’ offices, hospitals, and nursing homes - driven by our current fragmented payment system.

The fact that insurance overhead per se accounts for a minority of the bureaucratic waste in the system explains why implementing a public option plan would not achieve most of the potential bureaucratic savings that can be realized through single payer. Even with a public option, hospitals, physicians and nursing homes would still have to maintain virtually all of their internal billing and cost tracking apparatus in order to fight with private insurers.

7.      Medicare overhead is roughly 3%. Recently, right-wing “think tanks” have released studies claiming that Medicare’s administrative costs are far higher than the official 3% estimate. These estimates add to Medicare’s costs a share of the salaries of the President and members of Congress, the cost of running the Internal Revenue Service, etc. But none of these added costs would go away if Medicare were abolished, or up if Medicare were expanded to cover everyone. Most economists agree that such expenses should not be included in calculating Medicare’s overhead.

8.      The correct answer is zero. Single payer would not increase the deficit, and would actually reduce it over the long-term.

There are three reasons why the U.S. health care system costs more than other systems throughout the world. One, we spend two to three times as much as they do on administration. Two, we have much more excess capacity of expensive technology than they do (more CT scanners, MRI scanners, and surgery suites). Three, we pay higher prices for services than they do.

There is no doubt that we do not need to spend more than we currently spend to cover comprehensive care for everyone. But the initial transition to a universal system would be very disruptive if we spent less. That is because we have a tremendous medical infrastructure, some of which would likely retain its excess capacity during the transition phase. Secondly, we would likely retain salaries for health professionals at their current levels. Thirdly, we would cover much more than most other countries do by including dental care, eye care, and prescriptions. And for these reasons we would need the extra 40% that we are already spending - but NOT more. We could cover all the uninsured and improve coverage for those who have skimpy coverage for the same amount we are currently spending!

9.      Three. The United States, Mexico and Turkey each fail to provide universal health insurance.  Every other modern nation has decided that your wealth should not determine your health.

10.  76. In fact, until the ACA, HR676 has consistently been the most popular health reform legislation in Congress.


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