By Ray Bellamy, M.D. and John Clay
Tallahassee Democrat, April 28, 2017
The basic idea of insurance is that the risk of unexpected troublesome expense is spread through the broadest possible number of beneficiaries. That would be all of us.
Unfortunately, for-profit insurers have learned to game the system to maximize their profits. They sell coverage to those who are well and avoid the sick.
Our system carries huge administrative costs because health care providers must deal with a myriad of different provider plans, each with its own panel of other approved providers, rules and copays, etc.
The result is for every doctor in the USA, there are eight workers in administrative and non-medically productive roles; in contrast, other Western countries have a miniscule fraction in non-medically productive support personnel and can afford superior coverage for their entire populations.
We spend approximately $3.5 trillion a year on our complex mix of public and private coverage, each with different rules and excessive administrative departments. Duke University employs 900 insurance clerks, said to be more than they have nurses.
Our very complex $3.5-trillion system has overhead and administrative expense of over 33 percent; Canada’s system has 12 percent and Taiwan’s is even less. Simply eliminating that waste within our system would save an estimated $630 billion a year.
A national single payer system based on an expansion of Medicare to cover all of us from birth to death would be vastly more economically efficient and provide those savings. Compared to dealing with multiple private and public coverage plans with different rules, varying panels of providers, inconsistent copays/deductibles, etc. a single payer system is much more labor efficient and cost effective.
Legalizing drug price negotiation, as is the case with the VA and Canada, would cut our drug prices roughly 40 percent. The very costly lawsuits related to medical expense recovery would diminish, since medical care would be universally provided; insurance rates for auto, homeowners, workers compensation, commercial and malpractice insurance would likely be reduced.
The total savings noted above should be in the range of $700 billion a year, and would support superior, comprehensive medical coverage of every American.
To read further about such Medicare expansion along with cost reduction, read the excellent paper in the medical journal “Annals of Internal Medicine” by internal medicine specialists Drs. Steffie Woolhandler and David Himmelstein, who have studied this needed change for decades. Titled “Single-Payer Reform: The Only Way to Fulfill the President’s Pledge of More Coverage, Better Benefits, and Lower Costs,” it was published in the Feb. 21 issue this year.
Dr. Ray Bellamy is a long time Tallahassee physician and member of Physicians for a National Health Program. John Clay is a retired Tallahassee engineer and passionate advocate for affordable universal health care.