[lbo-talk] The state of play on single payer

Gar Lipow the.typo.boy at gmail.com
Sun Jan 11 16:22:55 PST 2009


On Sun, Jan 11, 2009 at 11:07 AM, Michael Pollak <mpollak at panix.com> wrote:
> Under Medicare, a single-payer system is already in place for U.S. citizens
> who are over age 65 or who have permanent disabilities. The Medicare program
> spends 3 percent of its revenue on administrative costs, while private
> insurers spend 30 percent or 10 times as much, according to the
> Chicago-based American Medical Association and the New England Journal of
> Medicine.

OK, single payer does save administrative costs but not ten times. This figure confounds categories. 30% (an old figure probably over a third by now) of *ALL* medical spending is spend on administration, including hospital administration, doctor's overhead and so on. The 3% figure is just for "insurance" portion of Medicare Still Canada, which is by no means the most efficient medical system in the world spends around 12% of total costs on all administration. So Single Payer still save about two thirds of administrative costs. And there are other savings, because SP has bargain leverage to by pharmaceuticals, equipment and supplies for less. It also is structurally more open to electronic records and all sorts of efficiency measures that lower cost and improve quality. So your basic point is correct, but it does not reduce administration by 90%.



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