I don’t doubt that insurance introduces a certain amount of overhead into the equation (after all, they have offices and wages to pay), but I’m a bit skeptical of that 50% figure. Do you have a source for that?
Thanks, appreciate the link. However, it does not corroborate the theory that health insurance companies alone are responsible for that difference. From the article:
There are many possible factors for why healthcare prices in the United States are higher than other countries, ranging from the consolidation of hospitals — leading to a lack of competition — to the inefficiencies and administrative waste that derive from the complexity of the U.S. healthcare system. In fact, the United States spends over $1,000 per person on administrative costs — approximately five times more than the average of other wealthy countries.
So while the administrative overhead definitely IS very high compared to other countries, it doesn’t even account for more than 10% of the total healthcare expenditure — meaning eliminating insurance companies wouldn’t just magically make healthcare 50% cheaper for everyone.
OK, the whole 50% additional cost paid by the patient may not all go to the insurers.
Hospitals can also be profiting, as well as numerous side industries (pharma, equipment etc.) as well as the heavy admin layer you highlighted.
But the major difference between the US and other rich OECD countries is the insurance layer replacing the social funding. Health insurance is the cause of the disparity, even if it doesn’t receive all the benefit.
Perhaps, but that doesn’t mean a single payer system would solve all of the problems. First of all, that’s still a form of insurance, because it cannot be sustained if it simply pays out each and every claim — after all, the money has to come from somewhere. There HAVE to be people who pay in more than they get out, otherwise the system will simply go bankrupt.
Also, even in a single payer system, healthcare is still a limited resource (because there are only so many providers, i.e. doctors and hospitals, etc.), so rationing has to take place or people will simply abuse the system. In most cases, this means long waitlists to see specialists and/or qualify for expensive treatments. Just ask Brits or Canadians how long they have to wait for such things, and consider whether you’d be willing to risk not getting a lifesaving procedure done in time. It’s not unheard of for Canadians to simply go to the US if the wait is too long, because there they can pay out of pocket and get it done quickly instead of risking their condition getting worse (or Americans going to Mexico to get it done cheaper).
Sadly, this is a much more complicated issue than you seem to think, and I’m afraid such kneejerk approaches aren’t going to help solve it.
Mostly agree. Insurance is still needed. But we can see by comparison with other OECD countries that (government sponsored) single payer is the most efficient version of insurance.
The goal of government should be to reduce middlemen. Unfortunately those middlemen are bribing the politicians against change.
Unfortunately those middlemen are bribing the politicians against change.
Well, again, how is a single payer system going to solve that? As long as there’s a government, it can be bribed, and if it’s not the insurance middleman doing it, it will be somebody else. If anything, giving people a single point of access to bribery will make it easier to do so, not harder. The more you centralize power, the easier it is to corrupt.
Again I point to the OECD countries as evidence, not that the problem of bribery, corruption and fat middlemen is solved, but that the US can achieve a 50% reduction in costs.
The crazy thing is that 50% of the cost is middlemen (mainly insurance). The rich could halve their healtcare costs if they just decide to share.
I don’t doubt that insurance introduces a certain amount of overhead into the equation (after all, they have offices and wages to pay), but I’m a bit skeptical of that 50% figure. Do you have a source for that?
In 2024, the United States spent an estimated $14,885 per person on healthcare … while the average for wealthy OECD countries, excluding the United States, was $7,371 per person. https://www.pgpf.org/article/how-does-the-us-healthcare-system-compare-to-other-countries/
Thanks, appreciate the link. However, it does not corroborate the theory that health insurance companies alone are responsible for that difference. From the article:
So while the administrative overhead definitely IS very high compared to other countries, it doesn’t even account for more than 10% of the total healthcare expenditure — meaning eliminating insurance companies wouldn’t just magically make healthcare 50% cheaper for everyone.
OK, the whole 50% additional cost paid by the patient may not all go to the insurers.
Hospitals can also be profiting, as well as numerous side industries (pharma, equipment etc.) as well as the heavy admin layer you highlighted.
But the major difference between the US and other rich OECD countries is the insurance layer replacing the social funding. Health insurance is the cause of the disparity, even if it doesn’t receive all the benefit.
Perhaps, but that doesn’t mean a single payer system would solve all of the problems. First of all, that’s still a form of insurance, because it cannot be sustained if it simply pays out each and every claim — after all, the money has to come from somewhere. There HAVE to be people who pay in more than they get out, otherwise the system will simply go bankrupt.
Also, even in a single payer system, healthcare is still a limited resource (because there are only so many providers, i.e. doctors and hospitals, etc.), so rationing has to take place or people will simply abuse the system. In most cases, this means long waitlists to see specialists and/or qualify for expensive treatments. Just ask Brits or Canadians how long they have to wait for such things, and consider whether you’d be willing to risk not getting a lifesaving procedure done in time. It’s not unheard of for Canadians to simply go to the US if the wait is too long, because there they can pay out of pocket and get it done quickly instead of risking their condition getting worse (or Americans going to Mexico to get it done cheaper).
Sadly, this is a much more complicated issue than you seem to think, and I’m afraid such kneejerk approaches aren’t going to help solve it.
Mostly agree. Insurance is still needed. But we can see by comparison with other OECD countries that (government sponsored) single payer is the most efficient version of insurance.
The goal of government should be to reduce middlemen. Unfortunately those middlemen are bribing the politicians against change.
Well, again, how is a single payer system going to solve that? As long as there’s a government, it can be bribed, and if it’s not the insurance middleman doing it, it will be somebody else. If anything, giving people a single point of access to bribery will make it easier to do so, not harder. The more you centralize power, the easier it is to corrupt.
Again I point to the OECD countries as evidence, not that the problem of bribery, corruption and fat middlemen is solved, but that the US can achieve a 50% reduction in costs.