I work in a socialized health system, in a moderately rich country. We cannot afford to have something like Obamacare: it costs too much.
Over here, the local health board (my covers the bottom half of the South Island, where about 400 000 people live) get bulk funded by the state and then told to get on with the job.
We would rather pay doctors and nurses and OTs and speech therapists and Social Workers and Psychologists over administrators. So we keep our forms as few as possible.
Drawing on the “National Health Expenditure Projections for 2012-2022,” released in July 2014 by the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), the authors – Drs. David U. Himmelstein and Steffie Woolhandler – calculated yearly estimates for private insurance overhead and government program administration costs both with, and without, the effects of the ACA.
Using estimates from the Congressional Budget Office, they also calculated the ACA’s coverage and cost.
“Between 2014 and 2022, the ACA will add $273.6 billion in new administrative costs over and above what would have been expected had the law not been enacted,” said Himmelstein. “That’s equivalent to $1,375 per newly insured person per year, or 22.5 percent of total federal expenditures for the program.”
Himmelstein and Woolhandler write: “Nearly two-thirds of this new overhead – $172.2 billion – will go for increased private insurers’ administrative costs and profits,” while the rest of the added overhead “is attributable to expanded government programs, i.e. Medicaid. But even the added dollars to administer Medicaid will flow mostly to private Medicaid HMOs, which will account for 59 percent of total Medicaid administrative costs in 2022.”
They observe that while insuring 25 million additional Americans, as the CBO projects the ACA will do, “is surely worthwhile,” the administrative costs of doing so “seem awfully steep, particularly when much cheaper alternatives are available.”
By way of alternatives, they point to traditional Medicare, which runs for about 2 percent overhead. Were the 22.5 percent overhead figure associated with the ACA to drop to traditional Medicare’s level, the U.S. would save $249.3 billion by 2022, they say.
The overhead rates of universal, single-payer systems such as Taiwan’s or Canada’s are even lower, closer to 1 percent, they write, adding that if the U.S. were to adopt a single-payer system, the savings on bureaucracy and paperwork would amount to about $375 billion annually, enough to provide high-quality, first-dollar coverage to all Americans.
By way of comparison, this is what a fully socialized system is like. And I still think we spend too much on administration.
The Ministry of Health allocates more than three-quarters of the public funds it manages through Vote Health to DHBs, who use this funding to plan, purchase and provide health services, including public hospitals and the majority of public health services, within their areas.
Most of the remaining public funding provided to the Ministry (approximately 19 percent) is used to fund important national services, such as disability support services, public health services, specific screening programmes, mental health services, elective services, Well Child and primary maternity services, M?ori health services and postgraduate clinical education and training. In 2013/14, the Ministry will directly purchase $2.84 billion worth of health and disability services.
About 1.3 percent (about $191 million in 2013/14) of Vote Health funding is spent on running the Ministry which supports the wider health sector.
Obamacare is neither a rational free market nor a rational socailized system. What it managed to do is take the worst aspects of both systems, and make something that neither works nor is cheap. The simplest thing to do, says this chap who likes the fact he has the Pacific between him and the USA, is to repeal it, and let the states sort it out: people can then choose to live in a single payer state — heck, Manitoba does this with car insurance — or not.
Are you assuming the ACA was intended to work, to actually function?
ACA was clearly intended as a stalking horse for some sort of single payer system (with a nice carve out for the rich to go private), with plenty of special doggy treats for certain groups.
I agree that the politics of this stink. However, I get paid to see people and help them. And we don’t have enough people or hands to go around. Given the needs we have, this kind of baroque system is obscene.
We do have part payment. For GPs, by the way. We moved to state funded hospitals and private primary care in the 1930s
In functional practice, the system has become something of a semi-cartel for the Insurance Companies. Though I don’t even think they planned for that. For some of the supporting camp, it is a stalking horse for Single Payer, but the system will collapse before they can pull off that trick. Vermont even attempted to go Single Payer and just backed out.
One of the hilarious side effects of the way the Democrats operate (they’re the party of the Poor + Rich, with the Middle made of a Republicans) is that the Rich aren’t going to put up with terrible service like the British NHS. So any move simply can’t cut services without all of the politicians losing their backing.
The only party that can call Obamacare unabashedly good is the Pharmaceutical industry. They finally got “someone” to pay nearly full price for their goods. I guess it makes up for the European & Indians always stealing their patents. (One of the dirtiest secrets about how they keep their health-costs “lower”) Granted, it’s coming even further out of American pocket books.
Oh, but at least it “helped” the economy. Increased (read: required) increased health care spending was the big cause of Q1 USA GDP being up over 4%. That’s not a joke.
Pukeko, your polity is small enough that there are clear limits to what panjundrums can get away with. There are surely limits in ‘Murica as well, we just have not yet seen them. The ACA / Obamacare debacle may be a straw that breaks something, or it may be patched up enough to limp along for years, I can’t say. The sheer audacity of some of the corruption is amazing.
A continental sized economy is no place for “one size WILL fit all” health care but that hasn’t stopped the nannies from trying, ever since the 1950’s. Sen. Edward Kennedy created the HMO system in about 1969, and within 15 years he was denouncing his own creation in favor of more advanced government control. It’s always been about control for some people, with all the cant about “helping people” as just window dressing.
People still get helped in the US. It’s just often via the Emergency Room, which is a rotten place for a lot of care to be sure, but it’s Federally mandated. “One size fits all”.