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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (1789)	8/2/2007 11:48:16 AM
From: TimF	Read Replies (1) \| Respond to of 42652

Government workers tend to have lower wages than equivalent private sector employees, but they often have better benefits. Remember most employees aren't executives. Where talking about people processing claims forms. Government employees may be more productive than private sector employees on the whole, but that's because you don't have too many government burger flippers and the equivalent. Even when the government needs such functions performed they tend to pay contractors to do it. At the very high end, private sector workers tend to make a lot more than government workers, but that's mostly because they are so productive. A lot more would go to routine preventive care which saves money in the long run. I don't think either a lot more going to routine preventive care, or major cost savings in the long run from the increase in spending on routine preventive care is nearly as certain as you seem to think. And even if it is true that doesn't mean that reduced rationing would not increase costs. Anything that allows for more resources to be poured in to the very expensive cases will increase total costs. But I think its very likely that rationing would increase, esp. if the system is implemented because of a belief that it will reduce costs.

To: Road Walker who wrote (1789)	8/2/2007 2:40:55 PM
From: slacker711	Read Replies (1) \| Respond to of 42652

Marketing costs would be greatly reduced. Think of all the departments in a typical health insurance company where the cost would be eliminated. Investor relations for one. Government workers almost always have lower compensation costs, and way lower of executives. I haven't seen any studies on government employee productivity and I suspect you are wrong. Just an observation, but even if you are right about the potential savings, we are still going to have to account for covering the ~15% of the country that currently has no insurance. I also wonder what type of insurance plan we would actually have....would it be equivalent to the current federal employee plan or would it be much more limited in scope? There is a huge amount of variance in the quality of coverage among the 85% of the country that is already covered. If you pick some sort of median, half the country is going to scream as their health care worsens.....and if you pick a gold plated plan, your costs are going to increase substantially as people use their increased coverage. Slacker

To: Road Walker who wrote (1789)	8/3/2007 3:38:52 PM
From: TimF	Read Replies (2) \| Respond to of 42652

re: "Government workers almost always have lower compensation costs" Federal Pay: Myth and Realities by Chris Edwards cato.org cato-at-liberty.org coyoteblog.com Of course the employees aren't doing the same work. But the type of people who process claims in the private sector don't have to be highly skilled and compensated workers.

To: Road Walker who wrote (1789)	8/8/2007 10:46:50 AM
From: TimF	Read Replies (1) \| Respond to of 42652

The Cost to Administer Medicare Versus the Cost to Administer Private Health Plans--The Difference Isn't Anything Close to 25% Those that favor a single-payer government-run health care system have been reenergized by the Michael Moore movie, "Sicko." One of their contentions I keep hearing is that we could save 25% by getting rid of private health insurance plans and creating one big government-run plan. They point to Medicare's expense factor of 2.9% as evidence. The private health insurance plans have much higher expense factors. But, like so many things in health care, it isn't so simple--or simplistic as I keep saying about this movie. There are a number of other considerations: * Medicare's capital costs - Medicare benefits are paid from payroll taxes and general revenues. Medicare has done its share to run-up the federal debt in its 40 years. In 2004, Medicare costs comprised about 12% of federal non-interest spending. Using that factor to represent Medicare's portion of government operations, Medicare's share of government debt service costs would have been $19 billion in 2004. Adding this cost would have boosted Medicare's administrative costs to just under 10%. * Medicare pays health care claims for seniors which tend to cost a lot more than the average claim cost for a younger person thereby distorting any comparison between under-age-65 costs and those over age-65. For example, Humana reported its first quarter 2007 medical cost ratio to be 89.3% for its senior business. That is a lot closer to the Medicare expense ratio than I would expect most favoring a single-payer system would think. * Medicare generally uses payment strategies to control costs (it just cuts payments). While it is starting to do things like disease management, that is a very small part of what it does to control costs. If Medicare had the whole system, it wouldn't benefit from the spill-over impact of private sector programs to control waste and would have to build and operate its own on a much broader scale. That would run its cost ratio up considerably. Now, let's look at private sector health insurance plan costs. The first quarter 2007 earning's reports from the HMOs included the following: * United Health reported a medical cost ratio of 82.7%--which means 17.3% was spent on expenses, taxes, and profit for all of its businesses including commercial, Medicare, and Medicaid. * Wellpoint's medical cost ratio was 83.1% in the first quarter of 2007 for all of its health care businesses--commercial and government. That leaves 16.9% for expenses, taxes, and profit. But wait, what is the one thing health plans pay that Medicare doesn't pay? Taxes! Wellpoint and United each paid taxes equal to about 3% of their revenue in the first quarter of 2007 (that's 3% of revenue not profit). So, Medicare's real expense ratio is a lot closer to 10% than 3%. The big HMOs have expense, tax, and profit ratios of about 17%. But, take 3 points from that because it was income taxes paid to the government--meaning their net cost is around 14%. Apples to apples, Humana paid out 89.3% of its senior revenue on benefits leaving 10.7% of expenses, taxes, and profits. Give them credit for taxes and who's out front now? But what about that poor doctor's office today having to administer so many plans adding lots of expenses. True, one government plan would be a lot easier. But how much easier? You might have only one plan if the government took over but you would still have the same number of patients all with their unique needs and problems. And, would Medicare just be able to write checks if it were the only payer? Not likely. Medicare would be in the managed care business with all its bureaucracy before too long. Maybe the private sector does cost more but could we please knock off this, "It costs 25% more" junk science... healthpolicyandmarket.blogspot.com