My healthcare activism over the years (since nyceve’s activism got me involved in the movement, and Pris from LA and I organized demonstrations for Single Payer in Los Angeles) has taken me places and has taught me a lot.
Today, I am involved representing California OneCare in the Campaign for a Healthy California, Los Angeles chapter, led by the irreplaceable Georgia Brewer of Healthcare for All. So I am involved in the Business Sub-Committee, and our objective is to sell the next single payer (SB 810? again) bill to be introduced in the California Senate early in 2013.
In our last meeting, we were reviewing Dr. Robert Zarr’s 2008 PowerPoint: Universal Health Care: A Business Case for Single Payer National Health Insurance.
I highly recommend his PowerPoint; it’s full of great stuff and you can download it from the link above.
Two of the slides shocked me and gave me some food for thought that I’d like to share with you.
Keep in mind that these graphs come from a 2003 study in the New England Journal of Medicine, Costs of Health Care Administration in the United States and Canada, published here on the outstanding website of Physicians for a National Health Plan and the Bureau of Labor Statistics.
First notice how the number of administrators skyrockets in the 1990s (probably coinciding with the rise of for-profit health insurance companies when in 1993, employers were no longer required to offer alternatives to HMOs.) In 2012, it is probably worse and getting even more worse.
No wonder healthcare costs in the U.S. are so much higher than in any other country, and are heading toward 19% of GNP soon ($3 trillion dollars, yes $3 trillion per year).
These are 2007 figures. It is close to 18.5% today based on expert opinions, and these are the 2009 figures for the whole world (US 17.4%).
So now we are getting to where the stimulus comes. Hang in there.
As a point of reference, it is estimated that every doctor pays $82,975/year in administrative costs.
Administrative costs under a single payer healthcare system like in Canada, for example, are much lower.
These are 1999 figures from the New England Journal study:
So single payer administrative costs are 30% of our current costs or less. Other data points are important. Medicare administrative costs are estimated at 7% at worst (at worst). Think of single payer as Medicare for all improved.
So let’s be conservative and say that if we eliminate the administration mess that the insurance companies have brought us by eliminating them, and we implement a single payer system that allows providers to cut their administrative costs, we only cut overall administrative costs by half. So lets say that under a single payer system, administrative costs are reduced to 15% of overall healthcare costs.
Given that healthcare represents, using 2009 figures, 17.3% of our $15.3 trillion GNP (GNP and costs are both higher now), we are talking about reducing administrative costs from $794 billion/year to $397 billion/year.
Yes, it means that a lot of healthcare administrators will have to find other jobs eventually. But think of this: $397 billion can now be invested in the economy to do other things like infrastructure, alternative energy, education, small business loans, etc.
$397 billion per year! Now that is a stimulus package.
Look, I am all for the Affordable Care Act (Obamacare). The ACA will insure more people, lower insurance company profits and inefficiency, and control climbing costs. But single payer, as it has demonstrated around the world, will offer better outcomes (life expectancy, child mortality), insure everyone (including undocumented workers), and radically lower administrative costs.
Why? Because doctors and providers will only deal with one organization that will pay all bills.
In California alone this may infuse $40 billion/year into the economy, and that is huge.
I think I can sell this idea even to recalcitrant Ayn Rand-type small business owners (with a bit of conscience). I think it is a no-brainer.
What do you think?
Shockwave (aka Al Saavedra) is a California OneCare board member. Re-posted from The DailyKos.