Overhead Costs of Health Care One of the most shocking consequences of the commercial health care system in the United States is that overhead costs at every level of the system devour a much larger portion of our health care dollar than in countries with publicly financed health care. This fact is the exact opposite of the stereotype that public agencies tend to become bloated, ineffecient bureaucracies, while the private sector encourages lean efficiency through competition. Without exception, public insurance both within the United States and across countries is vastly more efficient than private insurance. Insurance Companies in a commercial setting waste much more on overhead than public insurance plans. Hospitals in a commercial setting waste more on overhead just having to pay multiple insurers and screen patients for insurance coverage. Physicians Offices likewise face the same administrative burdens imposed by commercial insurance. Insurance Overhead Medicare, the publicly managed plan for the elderly in the United States, spends 5 percent of each health care dollar on administrative expenses, compared with the 17 percent devoured by private insurers on average. This is because private companies spend more on marketing, often pay exorbitant salaries to executives, and take a cut of each health care dollar for profits and company reserves. Countries with a public insurance plan for the population immediately save over 10 percent on every health care dollar by cutting out private insurance overhead. Source: PNHP Slide Show Hospital and Physician Overhead Hospitals and physicians by virtue of having to deal with dozens of private insurance companies, as well as many individuals who have to be billed directly for care uncovered by insurance, incur enormous overhead expenses. The result is a large billing department at every hospital and, far more importantly, an enormous percentage of every physician, nurse, and technician’s time lost to paperwork. The waste incurred by a commercial insurance system even at the level of health providers is vividly portrayed by a comparison of overhead expenses for hospitals and physicians in the United States versus Canada. Remember, Canada does not have “socialized medicine” - hospitals and physicians are privately owned and run - these costs are incurred solely by the insurance system. Source: PNHP Slide Show The Bureaucracy is Growing Faster Than Direct Care The net result of commercial health insurance in the United States has been an explosion of bureaucracy at all levels of the health care system. This is clear from a comparison of the growth in health care administrators over time relative to the growth in physicians. Source: PNHP Slide Show SOURCES ON OVERHEAD COSTS Read an article from PNHP comparing administrative costs in the U.S. and Canada (download here or visit PNHP’s website). See a report by the California Medical Association on HMO administrative spending in California, where Blue Cross spends over 20% of every dollar on overhead (download the 2005 report or visit CMA’s website). Read a conservative estimate of administrative costs for public and private insurance by the Council for Affordable Health Insurance (download here). Download slideshows from Physicians for a National Health Program’s website.
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I've said it 100 times already...BUT although Medicare is obviously not wasting money on things like lobbyists, etc... they always leave out the fact that medicare rates don't even cover the fixed costs (this is not even factoring in staff salaries) for MD's or hospitals Speaking of crooked health insurers, though, my company is offering $150 per employee in order to get bloodwork done and other screening on behalf of our health insurance carrier. Yeah, like I'm going to let a HEALTH INSURANCE COMPANY get results of screening and bloodwork so they can deny claims based on "pre-existing conditions" The sad thing is that tons of employees are doing it
