Ithaca Journal
Citing the claim that a single-payer health program for the United States could realize administrative cost savings of more than $300 billion annually, the writer of the Oct. 25 letter “Too good to be true?” asks: “Can someone tell us how this enormous number was derived? What are the assumptions made in the calculation? Who did the calculation?”
The $300 billion figure is a conservative estimate derived from thorough analysis of health expenditures in the United States and Canada.
In the U.S., where private health insurance companies dominate the payment system, of every dollar, 31 cents goes to administrative expenses and 69 cents to actual health care. In Canada, where there is a single-payer national health insurance program, administration accounts for 16.7 percent of health expenditures, with 83.3 percent of spending going to the care of patients. 1999 health expenditure data, found U.S. savings to be at least $294.3 billion annually.
The study, by Woolhandler, M.D., M.P.H. et al, was published in the New England Journal of Medicine in 2003. Two authors are Harvard Medical School professors. The third is with the Canadian Institute for Health Information.
A single-payer program would not only save costs but also provide comprehensive care to everyone in the United States. Evidence indicates it will also improve quality and lessen disparities.
We need more people like the writer of the letter who want to know the evidence. Discussing the evidence — regarding human, as well as financial costs — can lead to change, like single-payer, that will improve the health of the nation.
Dr. William Klepack
Dryden