By Samuel Metz
The Oregonian, May 17, 2010
How much would you pay to keep your private health insurance instead of a single-payer system? A thousand dollars? Ten thousand dollars?
How about $350 billion?
Americans still persist in financing health care with unregulated private insurance. Consequently, our public health is the worst among civilized nations while our costs are the highest, bar none, in the world.
Driving this high cost is overhead – plain old ponderous paperwork generated by our private insurance system – to the tune of $350 billion a year. Make no mistake: This money does not pay for health care. It pays for administrators, accountants, billing clerks and benefits managers to transfer our money to health care providers.
Not all of this goes to private insurance companies, just $126 billion. And not all of that goes to profit and lobbying either. So where does the rest go?
It goes toward coercing insurance companies to pay up.
It isn’t easy for a health care provider to collect from an insurance company. Hospitals need sprawling billing departments, often larger than their nursing staff, to act as collection agencies. Physicians struggle as well. The average doctor spends $68,000 annually cajoling private insurance companies to pay what is owed. A family practitioner in Chicago might find herself dealing with 17,000 different schedules. Suddenly you realize what all those clerks are doing behind the counter at your physician’s office, staring at computer screens and waiting on hold.
Your employer is not spared paperwork either. Your harried boss finds the fine print of health insurance policies as baffling as you do. Hence the need for an expert, maybe dozens, just to keep track of your health care benefits.
It all adds up – to $350 billion.
Clearly filtering our dollars through private insurance companies squanders a lot of money (one dollar out of every three to be exact) before it gets to real-world health care. These losses would evaporate if the U.S. adopted a single-payer system. Mind you, single-payer systems still have administrative costs, just $350 billion less than we have now.
Let’s see how $350 billion in paperwork compares to other costs.
It is more than we spend on immigrant health care ($40 billion), defensive medicine ($60 billion), and health insurance fraud ($72 billion) — combined. It is more than we spend on medications ($261 billion), obesity-related diseases ($144 billion), tobacco-related diseases ($168 billion) or alcohol-related diseases ($96 billion). It’s more than we spent on the Afghanistan war ($179 billion). It’s more than the annual interest on our national debt ($224 billion).
And it’s more than the extra funding needed for comprehensive health care for all Americans ($225 billion).
Curiously, one of America’s own single-payer systems, the Veterans Administration, takes care of the sickest patients with the best results at the lowest cost with the highest patient satisfaction in the nation. Can life without private health insurance paperwork be all that bad?
If we insist on protecting our private health insurance industry with an extra $350 billion each year, we deserve a fair return on our investment.
What return are you getting for your $350 billion?
Samuel Metz is a Portland physician and a member of Physicians for a National Health Program and a foundingmember of Mad As Hell Doctors.