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So there’s the profits, and there’s the costs of the profit system. Which is why you have to look in places like administrative costs which are something like 1

So there’s the profits, and there’s the costs of the profit system. Which is why you have to look in places like administrative costs which are something like 17% in private insurance. Profit is the money over revenue - costs, so yes the profit is a center of waste, but there’s a ton of waste in the costs department that would not be necessary in a universal system. There’s also a lot of makework jobs wrapped in there too, so it’s no doubt a complicated problem.

tptacek 7y ago
By the numbers you just cited --- higher than the numbers I found, but only by single digits --- if you zeroed out administrative costs, eliminating not just insurance but any money paid anywhere to administer health benefits --- you would bring the cost of a low-deductible family health plan down by about $100/month. That is simply not enough, not nearly enough, to address the problem. Our national health care problem is not that plans cost $100 too much.
- awinder 7y ago
  I mean I'm at 20% in 2 cost centers (ill give you back 3 single digits but not a digit more), and there's more math on how you actually save money in a single payer system than just those 2 things. I don't know where the average family low-deductible plan costs $500 (maybe with employer subsidies? again, not a fair comparison), but 20% is a lot more than the 5% the parent discussed.
  - tptacek 7y ago
    I'm going to hold you to your own 17% number just to keep things simple. In Chicago, for a family of four, the lowest-priced ACA bronze plan, Blue Cross with a restricted network ("FocusCare") and a $15,000 family deductible, after zeroing out 17% of expenses, you are paying $976/mo. I think health insurance is very valuable, but can say confidently that the average family in Chicago does not view $976/mo with a $15k deductible and a limited network as "affordable". The numbers get even harder if you select a more reasonable plan.
    - pcwalton 7y ago
      Doesn't your argument suggest that a functional national health care policy should focus on both controlling payer-side costs and provider-side costs? Like the Swiss system does—payer-side costs are capped as a fraction of household income, and provider-side costs are tightly managed so that the total economic burden remains reasonable. To me it seems that both sides are presenting a false dichotomy where none need exist. We should bring our health care costs under control, and we ought to simplify Medicaid from a patchwork of state laws that are "mostly, kinda" universal to truly universal, like the Swiss system. I suspect that, in terms of raw dollars, Medicaid spending is already sufficient to fund basic health insurance for everyone who can't afford it; it's just distributed inefficiently and in need of reform. Replace the patchwork of state laws with a flat subsidy for those who can't afford basic insurance, and replace the punitive individual mandate with automatic enrollment.
      - tptacek 7y ago
        I'm receptive to all reforms! Reforming health care administration is worth doing; even if it doesn't make health care "affordable", these are big numbers we're talking about, and percentage-point changes in administration costs still generate money we can use on other things. Where we get into trouble is when we start contemplating radical reorganizations of the existing system without a clear goal or path to achieving that goal. So I could be receptive to single-payer if there was some clear idea of how it would get our costs in line with European systems. But no such clear idea is in evidence; rather, Democrats seem to believe that reorganization will somehow automatically solve that problem. More cynically --- and realistically --- I believe Democratic single-payer advocates think that once the government becomes the single payer, nobody is going to care about the costs anymore. I think there's an element of truth to that, but I'm not one of those people; I care that we're paying 2-3x what we should be paying.
        rayiner 7y ago
        > So I could be receptive to single-payer if there was some clear idea of how it would get our costs in line with European systems. This here.

tptacek 7y ago

By the numbers you just cited --- higher than the numbers I found, but only by single digits --- if you zeroed out administrative costs, eliminating not just insurance but any money paid anywhere to administer health benefits --- you would bring the cost of a low-deductible family health plan down by about $100/month. That is simply not enough, not nearly enough, to address the problem. Our national health care problem is not that plans cost $100 too much.

awinder 7y ago
I mean I'm at 20% in 2 cost centers (ill give you back 3 single digits but not a digit more), and there's more math on how you actually save money in a single payer system than just those 2 things. I don't know where the average family low-deductible plan costs $500 (maybe with employer subsidies? again, not a fair comparison), but 20% is a lot more than the 5% the parent discussed.
- tptacek 7y ago
  I'm going to hold you to your own 17% number just to keep things simple. In Chicago, for a family of four, the lowest-priced ACA bronze plan, Blue Cross with a restricted network ("FocusCare") and a $15,000 family deductible, after zeroing out 17% of expenses, you are paying $976/mo. I think health insurance is very valuable, but can say confidently that the average family in Chicago does not view $976/mo with a $15k deductible and a limited network as "affordable". The numbers get even harder if you select a more reasonable plan.
  - pcwalton 7y ago
    Doesn't your argument suggest that a functional national health care policy should focus on both controlling payer-side costs and provider-side costs? Like the Swiss system does—payer-side costs are capped as a fraction of household income, and provider-side costs are tightly managed so that the total economic burden remains reasonable. To me it seems that both sides are presenting a false dichotomy where none need exist. We should bring our health care costs under control, and we ought to simplify Medicaid from a patchwork of state laws that are "mostly, kinda" universal to truly universal, like the Swiss system. I suspect that, in terms of raw dollars, Medicaid spending is already sufficient to fund basic health insurance for everyone who can't afford it; it's just distributed inefficiently and in need of reform. Replace the patchwork of state laws with a flat subsidy for those who can't afford basic insurance, and replace the punitive individual mandate with automatic enrollment.
    - tptacek 7y ago
      I'm receptive to all reforms! Reforming health care administration is worth doing; even if it doesn't make health care "affordable", these are big numbers we're talking about, and percentage-point changes in administration costs still generate money we can use on other things. Where we get into trouble is when we start contemplating radical reorganizations of the existing system without a clear goal or path to achieving that goal. So I could be receptive to single-payer if there was some clear idea of how it would get our costs in line with European systems. But no such clear idea is in evidence; rather, Democrats seem to believe that reorganization will somehow automatically solve that problem. More cynically --- and realistically --- I believe Democratic single-payer advocates think that once the government becomes the single payer, nobody is going to care about the costs anymore. I think there's an element of truth to that, but I'm not one of those people; I care that we're paying 2-3x what we should be paying.
      - rayiner 7y ago
        > So I could be receptive to single-payer if there was some clear idea of how it would get our costs in line with European systems. This here.