Healthcare Myths: Bloated Bureaucracies Cruel Necessities

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Originally posted by lj user kaath9  at Healthcare Myths #3 & 4: Bloated Bureaucracies & Cruel Necessities

This first of two related myths, as summed up by TR Reid, has it that the universal healthcare systems of other wealthy countries are run by bloated bureaucracies.

This is simply not true.

Every other system Reid cited is less wasteful than ours. This is true whether they are public or private systems. Our for-profit setup has the highest administrative costs in the world.

This is a major reason we spend more on healthcare and get less in return. Our insurance companies spend roughly 20 cents on the dollar (that is, 20% of every dollar they spend) for the non-medical, administrative costs required for a profit-making venture: paperwork, reviewing claims, rescission, marketing, etc.

In comparison, France, with its private, non-profit system, spends about 5% to cover every resident of France; Canada spends about 6%; Taiwan–which broke in its brand new system in 1995–spends only 2%.

Reid refers to Japan as the “world champion” of cost control. This, despite the fact that Japan’s population is aging. They have better health outcomes, as well, and have the longest-lived and healthiest population in the world, though they are spending half as much per capita as we are.

One of the chief reasons these systems are so efficient has to do with the very fact that they DO cover everyone–in most cases, even visitors to the country. Why? Here are a few reasons:

  1. There is a vast pool of healthy people who–through taxes or premiums–pay into the system
  2. There’s no need for a claims adjustment staff who are charged with finding reasons to not pay claims (this means doctors don’t require people in their offices to handle claims either, by the way, which brings their costs down).
  3. There’s no need to spend millions for marketing and other profit-making schemes.
  4. There’s no need for a rescission department charged with finding reasons to cut people from the rolls … just when they need the coverage the most

Actually, this ties into another myth:

Myth #4: if insurance companies covered everyone they’d go broke.

They have to be cruel to stay in business, they say. If that’s the case, then why do the systems that cover everyone continue to exist? Because everyone is covered, as I mentioned. There are young and healthy people paying in to balance the older, sicker people. Then when those people are no longer young and healthy, they’re covered, in part, by the next generation of young and healthies coming along behind. It’s sort of “paying forward” … or maybe it’s paying backward. The point is that at some point, everyone will benefit from the system, so everyone pays in.

To balance this, in the other developed countries, if a doctor okays a procedure, it’s covered. Period. The costs are known, the claim is submitted, the sick fund or government agency or insurance company cuts a check. The doctors are paid within strict time limits. Coverage can’t be canceled or refused for any reason except non-payment of premiums in systems that use that method.

These plans don’t go broke; some, such as Switzerland’s fairly new privatized universal system, are doing very well indeed. Even if the government has to put more money in or raise premiums, they’ve still got massive amounts of headroom before they’d even be in the ballpark of what we’re spending.

Hey, today was a two-fer!

TR Reid’s next myth is that these plans are too “foreign” to work in our unique country. More later.

I’m not welcome at either the liberal or conservative tables.

I’m a gun owning machete wielding landowner (Haven’t found a better cure for devil’s club on a steep slope than a big knife).  I live on a ridge line in the Chugach Mountains of Alaska.  I believe that the TSA should be constrained, the Patriot Act should be eliminated or critically rewritten by people who value their rights more than their safety, or even my safety.  I think that every hospital and medical clinic in the US should be able to fearlessly take in every American patient that comes through the doors without worrying about who is going to pay, because they know that the bill will be paid.  Medical care costs have grown beyond the resources of the middle class, and yet the country only exists as a country because of the efforts of that middle class.  We build the chips and datasets, cars and trucks, and the economic environment that allows the rich to become rich.  We do have the right to expect healthy lives, considering how much we participate in empowering this land, for how little of the pool of money, and there is more than enough money in the medical care system to ensure that all of us can. Just the money wasted on insurance overhead and caregiver financial administration would more than care for a sturdy health care system for the currently uninsured.

You might say that I’m an independent voter.  I believe that the banks, not President Bush, took down Wall Street and created the mortgage crisis for a clean and continuing profit (take over a mortgage, foreclose when the owner is one or three payments behind, take the mortgage insurance, sell the house for it’s full market value, never repay the insurance payout.  What’s not to love about that?).  The national debt was created to fund a war half-way around the world that we won, but whose outcome was never going to create any greater good in the U.S.  Why? Weapons of mass destruction?  Not bloody likely.

Saddam Hussein and his minions were never a legitimate threat to the U.S.  I’d like to know what the real reason was, but I’m betting I’d disapprove.  Western cultures have been trying to remake the Middle East for more than two thousand years and it always ends poorly.  Maybe the U.S. really shouldn’t go 11,000 miles away and exercise American dominance games.  I’m not sure who it’s helping.  I know it isn’t me, and I know it isn’t my country’s economy.