Re:Single-payer healthcare would save $450B and 68k lives a ...
by Barrin92 on Friday February 21, 2020 @05:26PM
(#22387571)
>From what I have been told by healthcare professionals, medicare has less incentive to negotiate cost, less incentive to investigate fraud, and therefore lower administrative cost.
I don't think that's more likely to explain the cost saving than the sheer scale advantages of having a unified bureaucracy rather than countless of small insurance agents.
I will dig the source out when I'm home but (I think it was Paul Krugman) who went over the administrative overhead in one of his blog posts. Medicare and Medicaid both have administrative costs of less than 1% of their budget, the private industry clocks in at more than 15-18% IIRC. I have trouble believing that this is mainly fraud detection considering that it's consistent across other countries with consolidated healthcare sectors.
A single large administration can simply streamline these processes better than thousands of individual companies. To be frank the insurance industry seems mostly like an employment program for the middle class white collar sector.
I don't think that's more likely to explain the cost saving than the sheer scale advantages of having a unified bureaucracy rather than countless of small insurance agents.
I will dig the source out when I'm home but (I think it was Paul Krugman) who went over the administrative overhead in one of his blog posts. Medicare and Medicaid both have administrative costs of less than 1% of their budget, the private industry clocks in at more than 15-18% IIRC. I have trouble believing that this is mainly fraud detection considering that it's consistent across other countries with consolidated healthcare sectors.
A single large administration can simply streamline these processes better than thousands of individual companies. To be frank the insurance industry seems mostly like an employment program for the middle class white collar sector.