“Building Health Care Better Means Reining in Costs”
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There are 3 areas that the Biden administration could focus on for health care savings that could improve health even as they save money. These are administrative expenses, excessively high prices, and overuse of health care services.
Administrative expenses command about one-quarter of total health care spending in the US; in other countries, even those with multipayer systems, administrative expenses comprise less than one-eighth of their total health care spending. Advocates of a single-payer system note that their plans would reduce administrative costs. Those who are opposed to single-payer health care need to demonstrate that health care can be made administratively more efficient or the chorus for a single-payer approach will continue to grow.
The second area the Biden administration should look to for curbing spending is the excessively high prices related to health care in the US. The cost of brand-name pharmaceuticals, hospitals, and physicians are all higher than elsewhere.
The third area where savings may be found is reducing unnecessary medical care.
Tackling these issues will take time. No industry as big as health care changes rapidly, but that does not mean that short-term savings are impossible. One concrete step that can be taken in the interim is to link payments for pharmaceuticals with income. The idea is that US residents with low incomes should be charged no more than people in lower-income European countries, and US residents who have middle incomes should be charged no more than people in the richer European countries.
Reining in health care costs
Don McCanne, MD | Physicians for a National Health Program
The three sources of potential savings mentioned by Dr. Cutler are very real but differ significantly in magnitude.
The overuse of health care services can be trimmed slightly, but it is very difficult to eliminate low value care, such as imaging procedures or elective surgeries if the patient finds those to be of personal value. Though people keep looking, the savings here will be small.
Prices have been confirmed to be high in the United States and can be reduced by government-administered pricing, much like the VA, saving hundreds of millions of dollars.
Administrative costs of the private insurers and the administrative burden placed on the health care delivery system are massive, and the recoverable amount by eliminating this industry is underestimated in most studies of single payer. The savings are potentially in the hundreds of billions of dollars (1).
Because of large income and wealth inequality funding does have to be progressive, but not through an administratively complex and expensive method such as setting drug prices based on income, as Dr. Cutler suggests. It is much more efficient to do it through progressive taxes instead.
That is why, as Dr. Cutler suggests, “the chorus for a single payer approach will continue to grow.”
1. Himmelstein, Campbell, and Woolhandler https://doi.org/10.7326/M19-2818
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February 5, 2021 at 12:29 PM #401079djean111Participant
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high profits, looks like to me, by scooping up big money from the health care industry – wonder if “overuse of medical services” would be a big number one on that list. Provide less health care services, but keep premiums and co-pays high in order to discourage use of medical services.
Seems to me that M4A might have an initial big rush for health care services, everyone getting help they have needed but could not afford, and then things would settle down, and IMO if people have access to health care for preventive services and to treat problems before they get huge and expensive and life-threatening, there would then be bigger savings and lower costs. But it seems to me that peoples’ health is not even a consideration in the US, only profits.
America is not a country, it's just a business. (Brad Pitt, Killing Them Softly)
Everything I post is just my opinion, and, honestly, I would love to be wrong.
February 5, 2021 at 2:39 PM #401110
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