6 ms·

I don't particularly care if health insurance is public or private. DIRECT health care labor costs (doctor's, nurses, etc) are ~40-60% of TOTAL healthcare spen

I don't particularly care if health insurance is public or private. DIRECT health care labor costs (doctor's, nurses, etc) are ~40-60% of TOTAL healthcare spending. Smart people try to figure out ways to make our system better every day. If there was a silver bullet, we'd have already taken it. Health insurance profits are ~1.2% of total health care spending, the cost of running it is approximately ~4% more. It's always going to cost SOMETHING to run - whether you move it to the private or public sector is largely a rounding error. If you take all those insurance jobs and pop them into the Federal Government - you're unlikely to see much efficiency gains (the most pro-medicare articles state it's 37% more efficient - that's an improvement of ~1.5% in total spending). UHC had a net margin of 6.1% in 2024. Sure, if all 6.1% of that went to spending instead of profits - health care would be slightly better. But it's mostly a rounding error. Private health insurance profits are only ~1.2% of total spending. Maybe you're focused on a ~6.1% margin, or ~$60B in total profits. You're not going to get substantially better outcomes by simply having ~1.2%-2.7% more money to spend. You'd need to bring down the actual cost of healthcare substantially - which isn't going to happen unless you pay doctor's and nurses way less money. Pharmaceuticals are only about 9% of total US healthcare spending - even if you nationalize that (never going to happen) - you're still not getting substantially better / cheaper outcomes. Profits on pharmaceuticals is <2% of total spending as well. The only way you're getting significantly cheaper service is by reducing your biggest cost significantly - i.e. paying less for direct patient healthcare (doctor's, nurses, etc), and that's probably not a great strategy for getting better outcomes. Who knows? NHS pays doctors dirt, and their system isn't obviously worse than ours. Some people think it's way better, others way worse.

AlienRobot 2y ago
I have good news! If you move it to the public sector, you will effectively pay doctors less money for the same work. That's because the way it works currently is that the doctors have to deal with private insurance bureaucracy. By freeing them from this responsibility, they have more time to take care of patients, which should effectively gets you more medical bang for your buck.
- onlyrealcuzzo 2y ago
  You're describing the federal system being massively more efficient - which is theoretically possible - but rarely happens in practice.
  - dangus 2y ago
    It is already established fact that Medicare is more efficient than private insurance. https://www.healthaffairs.org/do/10.1377/forefront.20110920.013390/ https://www.healthaffairs.org/do/10.1377/forefront.20110920....
    - onlyrealcuzzo 2y ago
      Assuming that your numbers are correct: You eliminate ~1.2% of total healthcare spending on private insurance profits. Then you eliminate ~37% of ~14% of ~27% total healthcare spending on insurance labor costs = ~1.5%. * Article states medicare is ~37% more efficient. * Insurance companies are required to spend AT LEAST 80% of premiums on actual patient care (~6% of the remaining ~20% are profits - already taken out in the previous ~1.2% of total health care spending). * ~27% of total US healthcare spending is on private insurance premiums. You end up with ~2.7% cheaper healthcare in the ABSOLUTE best case. That's not moving the needle.
      - FireBeyond 2y ago
        You are absolutely ignoring the fact that you don't just get cheaper care (and lets also remember that spending is inflated by the bullshit of insurance "negotiation"), but oh, now everyone has healthcare, not just those employed with a decent employer who provides it.
      - dangus 2y ago
        - That literally moves the needle. You don't want your healthcare to cost 2.7% cheaper? If you were buying a TV and Best Buy sold it for $1000 but Costco sold it for $973 you wouldn't buy it from Costco? - Insurance companies being required to spend at least 80% of premiums on patient care logically incentivizes them to keep patient care costs high, because if costs go down then profit goes down. If your MRI costs $1000 then the insurance company is allowed to make $200 in profit. If your MRI costs $2000 then the insurance company doubles their profit to $400. - Removing private insurance would give public healthcare far more negotiating power on costs. While there is a limit to profit margins made by insurance companies, there is no limit to the profit margins made by medical suppliers, pharmaceudicals, etc. - Removing non-paying patients would reduce prices charged by hospitals. Hospitals are essentially sub-prime lenders making loans out where no assets are involved. They have to charge insurance companies more money to cover everyone else who doesn't pay. Moving to healthcare paid for automatically completely removes the issue of unpaid bills, collections, medical bankruptcies (how much do the salaries of bankruptcy courts, judges, lawyers remove from the healthcare system?). - You're arguing against the established fact that all other countries besides the United States spend less on care. If the United States tried anything else it would be likely to reduce costs.
segfaltnh 2y ago
Honest question as someone who prefers single payer but acknowledged it's not a silver bullet: how much of the costs are nurses and doctors vs. admin? It seems to me there's a lot of overhead in passing the bills around to get paid. I just had my appendix out last year and got billed 8 times by 8 different firms, each with payment portals, call centers, billing providers, etc. I assume there's a lot of inefficiency internally too.
- onlyrealcuzzo 2y ago
  ~40-60% is direct healthcare - not including admin or insurance labor costs. Pharmaceuticals is ~9%. Health insurance profits are 1.2%. Other profits are x%. Medical equipment, devices, hospital rents, etc are y%. Most of the remainder is admin & insurance costs - only about ~2% of which is private health insurance operating costs (largely labor).
  - llamaimperative 2y ago
    You're ignoring the fact that all of the large insurers are increasingly also the healthcare providers. UnitedHealth Group is the owner of both United Healthcare (the largest insurer in the country) and Optum (the largest healthcare provider in the country). Part of UHG's low profit margin is its liberal use of intra-company eliminations, where transactions between Optum and United Healthcare get zeroed out and don't count toward profit despite it ultimately generating more dollars in the parent company's coffers.
craigmccaskill 2y ago
Medicare administrative costs are around 2% of total program spending [1] compared to typically >10%. While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis. The US gets a bum deal on costs and outcomes and while we can argue on which specific changes will move which specific needle I think it's clear that one of the major differences compared to the rest of the world is that running healthcare as a for profit enterprise has failed to deliver on the promise of good outcomes for as affordable a price as possible both on an individual and country wide level. [1] https://www.politifact.com/factchecks/2017/sep/20/bernie-sanders/comparing-administrative-costs-private-insurance-a/ https://www.politifact.com/factchecks/2017/sep/20/bernie-san...
- onlyrealcuzzo 2y ago
  > While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis. Which has almost nothing to do with the amount of profits derived from private health insurance - that's only ~1.2% of spending. Maybe it used to be ~0.8% - that delta is not moving the needle.
  - craigmccaskill 2y ago
    But has everything to do with the need to take a closer look at the entire system and how we can do things better. I feel like focusing on this part of my comment vs. the bum deal part is disingenuous since non-US countries have figured out how to do it for cheaper with better outcomes without the main focus being the up and to the left drive for profit that our current system mandates.
    - onlyrealcuzzo 2y ago
      > But has everything to do with the need to take a closer look at the entire system and how we can do things better. People do that literally everyday. If there was a silver bullet, we'd take it.
dangus 2y ago
It is already established fact that Medicare is more efficient than private insurance: https://www.healthaffairs.org/do/10.1377/forefront.20110920.013390/ https://www.healthaffairs.org/do/10.1377/forefront.20110920.... 6.1% profit margins is a lot when it should not be for-profit in the first place. Why is anyone making a profit off of administering necessary services? What is the operating profit of your local firefighter brigade? What is the operating profit of the interstate highway system? What is the operating profit of your local water/sewer department? Not a single person in this country doesn't need healthcare at some point. It's not an optional for-profit good.

AlienRobot 2y ago

I have good news! If you move it to the public sector, you will effectively pay doctors less money for the same work. That's because the way it works currently is that the doctors have to deal with private insurance bureaucracy. By freeing them from this responsibility, they have more time to take care of patients, which should effectively gets you more medical bang for your buck.

onlyrealcuzzo 2y ago
You're describing the federal system being massively more efficient - which is theoretically possible - but rarely happens in practice.
- dangus 2y ago
  It is already established fact that Medicare is more efficient than private insurance. https://www.healthaffairs.org/do/10.1377/forefront.20110920.013390/ https://www.healthaffairs.org/do/10.1377/forefront.20110920....
  - onlyrealcuzzo 2y ago
    Assuming that your numbers are correct: You eliminate ~1.2% of total healthcare spending on private insurance profits. Then you eliminate ~37% of ~14% of ~27% total healthcare spending on insurance labor costs = ~1.5%. * Article states medicare is ~37% more efficient. * Insurance companies are required to spend AT LEAST 80% of premiums on actual patient care (~6% of the remaining ~20% are profits - already taken out in the previous ~1.2% of total health care spending). * ~27% of total US healthcare spending is on private insurance premiums. You end up with ~2.7% cheaper healthcare in the ABSOLUTE best case. That's not moving the needle.
    - FireBeyond 2y ago
      You are absolutely ignoring the fact that you don't just get cheaper care (and lets also remember that spending is inflated by the bullshit of insurance "negotiation"), but oh, now everyone has healthcare, not just those employed with a decent employer who provides it.
    - dangus 2y ago
      - That literally moves the needle. You don't want your healthcare to cost 2.7% cheaper? If you were buying a TV and Best Buy sold it for $1000 but Costco sold it for $973 you wouldn't buy it from Costco? - Insurance companies being required to spend at least 80% of premiums on patient care logically incentivizes them to keep patient care costs high, because if costs go down then profit goes down. If your MRI costs $1000 then the insurance company is allowed to make $200 in profit. If your MRI costs $2000 then the insurance company doubles their profit to $400. - Removing private insurance would give public healthcare far more negotiating power on costs. While there is a limit to profit margins made by insurance companies, there is no limit to the profit margins made by medical suppliers, pharmaceudicals, etc. - Removing non-paying patients would reduce prices charged by hospitals. Hospitals are essentially sub-prime lenders making loans out where no assets are involved. They have to charge insurance companies more money to cover everyone else who doesn't pay. Moving to healthcare paid for automatically completely removes the issue of unpaid bills, collections, medical bankruptcies (how much do the salaries of bankruptcy courts, judges, lawyers remove from the healthcare system?). - You're arguing against the established fact that all other countries besides the United States spend less on care. If the United States tried anything else it would be likely to reduce costs.

segfaltnh 2y ago

Honest question as someone who prefers single payer but acknowledged it's not a silver bullet: how much of the costs are nurses and doctors vs. admin? It seems to me there's a lot of overhead in passing the bills around to get paid. I just had my appendix out last year and got billed 8 times by 8 different firms, each with payment portals, call centers, billing providers, etc. I assume there's a lot of inefficiency internally too.

onlyrealcuzzo 2y ago
~40-60% is direct healthcare - not including admin or insurance labor costs. Pharmaceuticals is ~9%. Health insurance profits are 1.2%. Other profits are x%. Medical equipment, devices, hospital rents, etc are y%. Most of the remainder is admin & insurance costs - only about ~2% of which is private health insurance operating costs (largely labor).
- llamaimperative 2y ago
  You're ignoring the fact that all of the large insurers are increasingly also the healthcare providers. UnitedHealth Group is the owner of both United Healthcare (the largest insurer in the country) and Optum (the largest healthcare provider in the country). Part of UHG's low profit margin is its liberal use of intra-company eliminations, where transactions between Optum and United Healthcare get zeroed out and don't count toward profit despite it ultimately generating more dollars in the parent company's coffers.

craigmccaskill 2y ago

Medicare administrative costs are around 2% of total program spending [1] compared to typically >10%. While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis. The US gets a bum deal on costs and outcomes and while we can argue on which specific changes will move which specific needle I think it's clear that one of the major differences compared to the rest of the world is that running healthcare as a for profit enterprise has failed to deliver on the promise of good outcomes for as affordable a price as possible both on an individual and country wide level. [1] https://www.politifact.com/factchecks/2017/sep/20/bernie-sanders/comparing-administrative-costs-private-insurance-a/ https://www.politifact.com/factchecks/2017/sep/20/bernie-san...

onlyrealcuzzo 2y ago
> While what you're saying on the surface may be true from the numbers you are comparing, the fact of the matter is that healthcare costs are becoming more and more expensive during a time when many are experiencing a cost of living crisis. Which has almost nothing to do with the amount of profits derived from private health insurance - that's only ~1.2% of spending. Maybe it used to be ~0.8% - that delta is not moving the needle.
- craigmccaskill 2y ago
  But has everything to do with the need to take a closer look at the entire system and how we can do things better. I feel like focusing on this part of my comment vs. the bum deal part is disingenuous since non-US countries have figured out how to do it for cheaper with better outcomes without the main focus being the up and to the left drive for profit that our current system mandates.
  - onlyrealcuzzo 2y ago
    > But has everything to do with the need to take a closer look at the entire system and how we can do things better. People do that literally everyday. If there was a silver bullet, we'd take it.

dangus 2y ago

It is already established fact that Medicare is more efficient than private insurance: https://www.healthaffairs.org/do/10.1377/forefront.20110920.013390/ https://www.healthaffairs.org/do/10.1377/forefront.20110920.... 6.1% profit margins is a lot when it should not be for-profit in the first place. Why is anyone making a profit off of administering necessary services? What is the operating profit of your local firefighter brigade? What is the operating profit of the interstate highway system? What is the operating profit of your local water/sewer department? Not a single person in this country doesn't need healthcare at some point. It's not an optional for-profit good.