Wed
Sep 23 2009
06:35 am

One of the overlooked problems with single payer (which I believe is our only hope) is the amount of money we spend for health care in the U.S.

Right now we spend about $8000 per person in the U.S. annually ($2.4 trillion in spending for 300 million population).

That's $32K per year for a family of four, which is $2667 per month. It’s $667 per month for an individual. I don't know many folks who could afford that under a single payer plan that distributes the costs evenly among a universal pool of enrollees.

But wait.

continued...

France spends about $3600 per capita according to the latest OCED figures for 2007. Let's say that has gone up to $4000 by now. That's about half of what we spend and they have better outcomes. So let's say we could figure out how to deliver health care as efficiently and cost-effectively as the French, thus reducing our $8000 per capita to $4000. Other countries do it for even less.

Now we are talking about a single payer system which has to cover 300,000,000 people at a cost of $4000 per person, which works out to about $1.2 trillion.

Now consider that the federal government already covers about $665 billion through Medicare and the federal portion of Medicaid (paid for by existing payroll taxes, Medicare premiums, and general tax revenues). So we are already paying $2217 per individual towards the $4000. (So much for "keep the government out of my health care!")

That leaves $1783 per individual to cover a single payer system for every U.S. citizen. That's $149 per month per individual, or $594 per month for a family of four.

And even if we continued with the current employer-based system, employers would pay a portion of $594 per month for family coverage instead of paying a portion of $1928 per month.

And we would eliminate $140 billion in state Medicaid spending, which represents anywhere from 4% to 25% of state budgets (about 17% nationwide). We might have to raise the 2.9% Medicare payroll tax a little and have sliding-scale premiums and vouchers to cover the needy and the uninsured. Maybe we have higher deductibles and co-pays for high-net-worth individuals. But it would be a lot cheaper to insure everyone at $4000 per than at $8000 per.

Now the only problem is reducing the per capita cost to $4000. A single payer national universal health insurance system would eliminate insurance company profits, executive bonuses, redundant billing and payment systems, etc., saving anywhere from 15% to 30%. Let's be conservative and say 20%. This reduces our $8000 per capita to $6400 right out of the gate.

Now we need to find $2400 more (37.5%) in savings. Maybe we pay $750 for an MRI instead of $1200. And maybe we pay $6 instead of $10 for a hospital aspirin. Etc. My doctor gives a 40% discount for paying cash and he seems to be doing OK. We can reduce health care spending by 37.5% if we want to get serious about the problem.

Congress ought to be able to figure it out. In fact, they have already figured out the single payer part. It's called HR676. All this other stuff we're arguing about is a waste of time, and will end badly for everyone except insurance and pharmaceutical companies.

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French Connection's picture

Most People Buy on Emotion

So let's say we could figure out how to deliver health care as efficiently and cost-effectively as the French, thus reducing our $8000 per capita to $4000.

The real question is, why was this not one of the starting points?

We know via the "Freedom Fries" fiasco, the same morons who are Palin and Beck fans, hate the French. If Obama's starting point was; "We can't keep letting the French whip our tails", or something on that basic "By Gawd" level - we would now be at the point of having most everyone on board.

Until Obama (and Dems) understand not everyone will be reached on an intellectual level, he will keep wasting his Sundays. Either "sell" the plan, which is a matter of emotion, or ram the plan through. I'm afraid it's getting a little late for either.

bizgrrl's picture

That's $149 per month per

That's $149 per month per individual

Wouldn't that be nice? I'd be willing to pay a little more, right now anyway.

Virgil Proudfoot's picture

We could reduce the cost by getting rid of the inscos

The overhead for the inscos is 30 percent vs. 3 percent for Medicare. So right there's a savings of 27 percent, even before you start to jawbone down the providers to provide care for what Medicare reimburses.

The only losers would be the insco CEOs with the $20 millions salaries, and the investors siphoning off billions for profits.

lovable liberal's picture

We already spend more tax money than France

You can find the OECD summary, including bar graphs, with a brief detour via "Best health care in the world".

Liberty and justice for all.

My home

gonzone's picture

explain please

The "in both directions" comment seems inaccurate. Could you please elaborate where misinformation or disinformation has occurred with those who support single payer health care? I am not aware of any instances. Links would be helpful too.

"If ignorance is bliss, why aren't more people happy?"

Mimma Figa Mia's picture

What the US needs is a

What the US needs is a single-payer not-for-profit health system that pays doctors and nurses sufficiently that they will undertake the arduous training and accept the stress and risks of dealing with illness and diseases.

kctay's picture

France

I hate to shine the light of truth on all this, but France health care is cheap (it's actually a hybrid system of single payer and private) is the government simply charges the harder working, higher income people more. They operate on a sliding scale regarding individual monthly costs. So if you work hard, you pay more. The middle class takes the brunt of this. France is hardly a decent poster child if you look at all their other problems caused by socialism.

CC

Andy Axel's picture

charges the harder working,

charges the harder working, higher income people more.

higher income != harder working

____________________________

Dirty deeds done dirt cheap! Special holidays, Sundays and rates!

Nobody's picture

Yes, hard working, higher

Yes, hard working, higher income. What is it? 4 times the poverty level which is only in the 40K range (just guessing)? Hardly a corporate titan who is on the golf course getting bonuses slid under his door. That is my point, the income number is going down, down, down for those that will be paying for the whole ball of wax, and these are going to be middle income people.

Oh, and then add in your supplemental insurance. One poster was talking about Australia, my wife is from Australia and nobody has a good thing to say about their program down under. Her brother was just up, and he was grousing about having to pay a $300.00 supplement per month. So the figures stated for the true cost of healthcare is only what the government (you) pay is not the total cost.

I also like everyone wanting to compare us with smaller countries when modeling, Australia has around 20 million people, Canada 33 million, France 62 million, and UK 61 million? We are using these countries as a model for healthcare for the US with 300 million people? Craziness.

My wife works for one of the largest three insurance companies in Oregon, and it's a non-profit. If you want changes in the current health care costs, blame the state insurance board, they clear the rates.

I'll just be happy if I can read the bill before it's voted on since our representatives won't.

BTW, I didn't say all the aspects of Socialism are bad.

lovable liberal's picture

Payment models

Since the U.S. is much larger than the other western democracies, economies of scale should give us cost advantages over them. Instead, we pay waaay more than anyone else.

Liberty and justice for all.

My home

R. Neal's picture

Also, France does not have

Also, France does not have "socialized" medicine, but rather a public/private hybrid as the commenter notes (before going on to lament all the problems caused by socialism).

Countries with true "socialized health care" such as the UK have much lower costs.

Australia has what is pretty much a "socialist" system similar to UK, but I believe there are some private hospitals and providers in their plan. I believe their cost to cover everybody is a 1.5% payroll tax (somebody fact check me if I'm wrong). Their per capita cost in 2006 was USD $3136 v. $6933 in the US according to the OECD.

We pay a 2.9% payroll tax in hopes of someday getting Medicare (if the Republicans don't abolish it).

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