The payer system is a
part of the health care system, but it tends to get focused on far too much to the detriment of quite a few other things that cause health care to be so expensive in the U.S. things like:
- The U.S. doesn't
have a health care system. It essentially has 50 mini health care systems that all have different rules, regulations, etc. The fact is, even HMOs are not truly national organizations -- they are more like several small companies split up by state. If they nationalized health care
law and standards, it would improve things, regardless of who is paying. It would nationalize the risk pool, and make any organization more efficient -- private or public.
- Administrative costs don't even come close to explaining the U.S. health care system problems. The U.S. spends about
twice what other countries do, per capita, on health care. Even if you brought admin costs down to
zero (which is obviously impossible), the U.S. would still be paying 170%-180% of other countries.
- The U.S. uses
by far more expensive, high-tech procedures than most countries. For example, the
U.S. is the leading consumer of MRIs and CTs. It uses those procedures
ten times as often, per capita, as the #2 countries on the list. Ten times! American consumers demand more expensive procedures, and we get them. At a cost.
- Obviously, lack of coverage, which results in abuse of emergency services, which increases cost
- Poor health in general. Insurance costs to cover obesity-related illnesses was 2% of total costs in 1987. It was 11.6% as of 2002.
There is also talk of a “public option” in the current debate, which would basically be an opt-in government run insurance program. HMOs know that this program will be much better than what they can provide and will drive them out of business within ten years, so they are pulling out all the stops to make sure it is crushed.
Nonsense. The concern about a public option would be that it wouldn't compete at all -- that rather than negotiating rates, it would simply fix prices at a certain level. That may sound well and good, except that it's those people with private insurance that are subsidizing that.
For example:
Reimbursements from Medicare cover only about 75 percent of the costs of care, according to an analysis of Colorado Hospital Association data compiled last year by The Lewin Group, a health care consulting firm based in Falls Church, Va.
The study showed that patients with private insurance pay, on average, 131 percent of the cost of care to make up for the shortfall left when others can’t pay the full share.
So sure, a public option, if it were run like Medicare, might put private insurance out of business. It might also put hospitals out of business. Or, it might simply have to either deficit spend or raise rates (i.e. taxes) once the private insurance wasn't making up the difference.
Obama's plan actually could work. Nationalize the risk pool. Force insurers to compete for
customers rather than with companies. Force (or really, allow) them to compete at a national level. If implemented
properly, as they did with Medicare Part D which has actually lowered costs (as opposed to how they screwed up Medicare Advantage), it would be fine.
