Because we have parasites in the form of private insurance companies. If that money went directly to healthcare users and providers instead, it would be a lot more effective for a lot more people.

This is incorrect. The premiums and fees paid to and by private insurers subsidize things like medicare and medicaid, which have such low reimbursement rates that they could not stand on their own without serious changes to the underlying structure.

>serious changes to the underlying structure

Serious changes like paying for Medicare for all US citizens? That's my whole point.

Health insurance profit margins typically run around 1-3%. 2018 was 3.3% and that was an exceptionally good year for them.

https://naic.org/documents/topic_insurance_industry_snapshot...

That jut tells me that the health insurance companies are very inefficient

Their profit is not the measure of what they extract

Their total top-line income is the proper measure of what the HC Insurance companies extract from the system -- PLUS the entire income of the set of companies that optimize billing so that providers can get fully paid -- PLUS the entire income of the industry of seminars & trade shows teaching providers how to optimize their billing, etc., etc., etc.

That entire industry of HC payments is parasitic - it adds no value, and extracts money.

Just pay the providers, and have patients show up at the door to get care, and let the doctors be the gatekeepers, not some unqualified insurance bureaucrats.

And yes, there would be many, many thousands of HC insurance workers who would need to find new employment. This is a good thing.

With single payer you will have unqualified bureaucrats as well. You need to decide who you pay for what and how much. That problem won't go away with single payer. I know because I live in a single payer country and it's a shot show. You may manage to make it more efficient maybe but you know, it's not like government run bureaucracy has great record of achieving that.

If one considers everything spent on health insurance companies a waste, which I disagree with, one should look at the loss ratio to see how much the insurance is extracting. In the linked report, the loss ratio is 84% so the insurance companies extracted ~16%.

The comment by orwin says that 22% is spent on bureaucracy in France public healthcare. 16% doesn't look that bad.

I'm not saying US healthcare doesn't have problems and there aren't some weird practices but if you can't measure or identify the problems correctly, you are not going to fix it.

I don't know about the US, but let's see France:

For tax-funded public healthcare, 78% of the money they are making via taxation is used to reimburse patients. That mean 22% is used to pay for the bureaucracy. Its is growing according to the numbers i have, despite all the shiny new tech they could have.

You would imagine private healthcare insurance compny overhead is lower, right? or at most at 25% for a 3% profit? Right. So Swisslife (i think this is the european private healthcare that have the biggest network, at least for glasses): 31% of what you're paying will get in their pocket to pay for bureaucracy and profit.

Either they have huge margins, either they have huge costs and are more inefficient than public healthcare. whatever the reason is, the number is way too high.

Why are you only considering profit? The entirety of their revenue is parasitic.

In the general case, economic measures fail to distinguish between wealth creation and wealth capture.

Health insurance is almost pure wealth capture. The provision of services is actually rationed acutely.

Public healthcare is wealth creation. There a trickle-out effect as private sector "insurance taxes" are reduced. But access is also increased, which creates jobs in frontline health care services.

There's a limited role for private industry in health R&D innovation, overlapping with public funding of original research. But provision is most economically efficient and productive when it's state-managed.

What it isn't is politically efficient. Wealth capture is political capture, and dilution of one creates dilution of the other.

This is not a popular idea in some quarters.

It's pretty obvious that the current healthcare system in the US is bad for business, in addition to not serving a bunch of people. Yet people still take the position that changing it would be risky.

Those can both be true. It can be incredibly risky to change and also have high risk currently.