Accounting for the cost of Health Care

Published

ADMINISTRATION

The United States spent $412 per capita on health care administration and

insurance in 2003--nearly six times as much as the OECD average. This is

because of its unique multiple-payor system, differences in insurance regulation across states, and the complexities of administering Medicare, Medicaid, and private-insurance products. This total does not include the additional administrative burden of the multi-payor structure and insurance products on hospitals and outpatient centers, which is accounted for under providers' operational costs. Nor does it include the extra costs incurred by employers because of the need for robust human resources departments to administer health care benefits.

Of the $98 billion of spending above ESAW on administration, $84 billion can

be traced to private stakeholders, and the remaining $14 billion to public-sector stakeholders. In the US private sector, we found that some 64 percent of the administrative costs incurred by private payors is due to underwriting health risks, and sales and marketing--costs that do not arise in the public systems of most OECD countries. In the public sector, administrative expenses take up 3 percent of the Medicare budget and 3 to 5 percent of the Medicaid system, compared with 2 percent spent in Britain's National Health Service (NHS).

http://www.mckinsey.com/mgi/reports/pdfs/healthcare/MGI_US_HC_fullreport.pdf

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Specializes in CRNA, Finally retired.

Agree that is a nutty, inefficient system. Obviously there is a lot of disagreement. Since no politician wants to touch this third rail how do we get change started? I think there has to be a coalition of all levels and kinds of health care providers but as long as we're fighting amongst ourselves over what, compared to the larger problem, non-issues, its impossible to get anything done. All entities involved in healthcare are spending loads of money lobbying in their own self-interests. How do patients get clout in the political process? And how many of them care as long as they're paying $10 for an office visit and another $10 for a prescription? Most people in the US would complain if they had to wait three months for an MRI for their painful (but not yet surgical) shoulder. This seems perfectly reasonable to me but a lot of people equate this with "bad" care. I wonder how many people in Canada would elect to change to our system if given the chance?

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Agree that is a nutty, inefficient system. Obviously there is a lot of disagreement. Since no politician wants to touch this third rail how do we get change started? I think there has to be a coalition of all levels and kinds of health care providers but as long as we're fighting amongst ourselves over what, compared to the larger problem, non-issues, its impossible to get anything done. All entities involved in healthcare are spending loads of money lobbying in their own self-interests. How do patients get clout in the political process? And how many of them care as long as they're paying $10 for an office visit and another $10 for a prescription? Most people in the US would complain if they had to wait three months for an MRI for their painful (but not yet surgical) shoulder. This seems perfectly reasonable to me but a lot of people equate this with "bad" care. I wonder how many people in Canada would elect to change to our system if given the chance?

I think there are disaffecteds in every system. I don't think that there are really that many people in single payer systems who would change over to our system for their own countries. I had an interesting conversation with a friend a week ago (corporate/MBA/Finance) about single payer. His viewpoint was that single payer was inevitable in the US because the corporate world wants to make the transition d/t the competitive disadvantage of our currrent system vis a vis the rest of the world.

One of the interesting things that the OECD data shows is that in the universal care systems there are actually more doctors (with fewer specialists) and nurses per capita, more hospital beds and more diagnostic equipment than in the US. The excessive admin/profit costs of our current nonsystem is eating away at the quality of our current care and leading us into the death spiral of ever increasing costs. Or as Jim Hightower put it so eloquently:

hightower_cartoon.gif

or as newyorknursey said:

OK. I AM CANADIAN, AND A NURSE IN NEW YORK. I GREW UP IN A HOSPITAL AS ALL FAMILY IS IN HEALTHCARE. READ THE STUDY - most canadians who have knowledge of both countries would prefer to get care from and work in Canada's system.

https://allnurses.com/forums/f195/canadas-health-system-good-better-than-us-new-research-suggests-219170.html

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Specializes in CRNA, Finally retired.
I think there are disaffecteds in every system. I don't think that there are really that many people in single payer systems who would change over to our system for their own countries. I had an interesting conversation with a friend a week ago (corporate/MBA/Finance) about single payer. His viewpoint was that single payer was inevitable in the US because the corporate world wants to make the transition d/t the competitive disadvantage of our currrent system vis a vis the rest of the world.

One of the interesting things that the OECD data shows is that in the universal care systems there are actually more doctors (with fewer specialists) and nurses per capita, more hospital beds and more diagnostic equipment than in the US. The excessive admin/profit costs of our current nonsystem is eating away at the quality of our current care and leading us into the death spiral of ever increasing costs. Or as Jim Hightower put it so eloquently:

hightower_cartoon.gif

or as newyorknursey said:

https://allnurses.com/forums/f195/canadas-health-system-good-better-than-us-new-research-suggests-219170.html

Viking: I have a friend who works in health care policy in a federal level and he has always said that corporations will change the system, not citizens. If we continue to link health care insurance with jobs, then no one has more impetus than corporate America to cut the employer's cost of health care. Having said that, I believe that we are the only country in the world that links health insurance to employment. That strikes me as absurd since the rest of the world is much further along the learning curve of providing services. Yes, I agree that we are augering to one-payor system and just beg that we do it now and put us providers out of our misery.

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