Commercial health insurance transaction costs are 3-6 times higher than those in public, govt funded 'markets'.
No they aren't.
The costs withing Medicare or similar government programs to provide health care are very low as a percent of the total money given out. But not all of the costs are actually incurred directly within Medicare. The cost to enforce Medicare taxes isn't part of Medicare's budget. The costs for developing, setting, updating and imposing policy for Medicare isn't included in Medicare's budget. The costs for raising capital for Medicare are included in Medicare's budget (They are instead under the IRS and SSA budgets, and once Medicare starts consuming more funds than are coming in eventually they will be under government borrowing as well). Much of the management of Medicare, while largely in Medicare's budget isn't included in Medicare's administrative overhead calculations, the same thing holds for promotional costs (which while lower overall as a percentage than in the private sector are not so low as to be insignificant, and are not counted as part of Medicare's overhead). Fraud and abuse investigation is considered part of private insurance's overhead costs but not Medicare's. etc. etc.
Also taxes are counted as part of the private companies overhead expenses, but taxes aren't money that disappears, they go to the government, which could in theory use them to help the uninsured to give just one example. When comparing overhead costs between government programs and private companies you shouldn't count the taxes the private companies pay.
Another factor is that Medicare treats older people, who typically have more and more expensive health care treatments. The private companies process claims that are smaller on the average and amount to less per person on the average, both factors decrease the percentage that Medicare pays in overhead compared to private companies but they wouldn't be operative with a "Medicare for everyone" plan, or other form of national single payer plan.
And not all overhead costs are useless or negative. They don't amount to a 100% loss.
Then finally the biggest issue might be the fact that when you pay for something by taxation you put a dead weight loss on the economy. Out income tax is complex and creates perverse incentives and fairly high compliance costs. Payroll taxes (which pay for Medicare) are simpler but discourage employment and push some of it off the books. These exact deadweight losses are hard to measure precisely with confidence but they very significant.
Medicare's Hidden Administrative Costs
cahi.org
Medicare and the Myth of Lower Admin Costs
healthcarebs.com
Comparing Public and Private Health Insurance: Would A Single-Payer System Save Enough to Cover the Uninsured?
manhattan-institute.org
and not directly on topic but related
Abolishing the middleman won't make health care a free lunch
marginalrevolution.com |
