[bart_spoon]

A good deal of that cost is due to private insurance. The free market approach has resulted in middlemen inserting themselves into the healthcare pipeline and leech dollars from consumers.

It isn't the only reason, but it is one of the biggest.

[faet]

> it is one of the biggest.

Disagree completely.

US spent $3.65T on healthcare in 2018. or 3650 Billion.

Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance.

"But, public option will save the costs/salaries/buildings/etc that you pay to insurance." Yes, but not all costs. You'll need to make up a small difference.

But, let's assume we only count money paid to 'care'.

If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil.

So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend.

So realistically we'd see a savings of 0.6% to 3% savings.

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

[dragonwriter]

> US spent $3.65T on healthcare in 2018. or 3650 Billion.

> Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance.

Profit is not the main source of the expense imposed by private health insurance, administrative costs are; Administrative costs are estimated at around $1.1 trillion nearly a third of the total, much of which, particularly billing and insurance-related (BIR) costs which account for about half of admin costs, would be eliminated in a single-payer or even public option systems, since the BIR costs imposed in current US public programs are far lower than private insurance (and some of those are still due to interaction with private insurance—e.g., coordination of benefits—and so would be erased even for public programs in a single-payer system.)

https://www.americanprogress.org/issues/healthcare/reports/2...

[faet]

>since the BIR costs imposed in current US public programs are far lower than private insurance

Which is why I included this piece.

>If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil.

>So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend.

Last year insurance spent $92 Bil on admin. Even if we 'save it by half' (comparing the 56 bil from your link) our best case savings of 106 bil drops to 60 bil. Or a reduction of 1.6% in healthcare spending or ~$160 per person.

And hospitals will still have admin as they still have to bill the government.

[dragonwriter]

The administrative cost imposed by private insurance on administration is not the cost spent by private insurance on administration. The biggest share of it is the administrative cost imposed on providers for dealing with private insurance (there is also a cost, in terms of coordination of benefits, imposed on public insurers). Your analysis, unlike the source I cited, entirely ignores administrative costs imposed by the private insurance system on actors other than the private insurers themselves, which misses the bulk of the costs associated with the private insurance system we have.

[dragonwriter]

> And hospitals will still have admin as they still have to bill the government.

Missed responding to this piece before, but, sure: but, from the source I cited upthread, BIR costs imposed in the US big public programs (Medicare/Medicaid) is 2-5% of total cost, in the US private insurance system, it's 17% of cost. With single-payer admin will be nonzero, but it also won't be nearly 1/3 of total health expenditures, nearly half of which is related to billing and insurance.

[faet]

From your link:

>NAM report concluded that BIR costs totaled $361 billion in 2009—about $466 billion in current dollars

>12.3 percent of spending on private insurance; and 3.5 percent of public program spending, including Medicare and Medicaid

So a difference of 8.8%. A savings of 41 Billion. So we'll add it to the 106 bil for removing insurance. And we're at 147 Billion. Or 4% total.

Even if we use the other estimate they mention. You're still looking at less than a 6% savings.

[Ididntdothis]

You are looking at the wrong number. US insurances are bloated institutions full of bureaucrats that do things that shouldn't be done. So it doesn't matter if they make some profit or lose money. They are still a big waste of money.

[faet]

And if you eliminate everything except the cost of care you're saving less than 3%.

[Ididntdothis]

You won’t find the single silver bullet that will solve all problems of US health care. Pretty much all players are inefficient so you will have to reduce insurance costs and hospital costs and drug costs and a lot of other things. Also don’t forget that the insurance bureaucracy also causes a lot of cost at doctors who have to hire people who deal with billing.

[lotsofpulp]

A good deal is that doctors and healthcare providers in other countries don’t make well into the $300k+ range. There’s a lot of money to be made in the US versus other countries. Without the insurance companies, who would have the power negotiate pricing with the providers? Americans don’t find government intervention palatable unless the person is over 65.

[ajmurmann]

Recently the head of the Oklahoma Surgical Center was on [econtalk](https://www.econtalk.org/keith-smith-on-free-market-health-c...). That center was founded in the late 90s, had all their prices on their website, no insurance works with them and get their prices are effectively lower our equal to what they were twenty years ago and lower than at a regular hospital. On top of that the doctors make more when they work for this center than anywhere else.

One thing I learned from the episode is that insurance companies get a reward for the delta between their negotiated price and the price a uninsured person would pay. This creates incentive for hospitals to raise their base price tag. Of course their is more to it. I cannot recommend the episode strong enough.

To me the bottom line is that right now we don't have free market health care and we don't have socialized health care we have the worst of both. Maybe what we have is best received as crony capitalism health care.

Taking a look at their website and just seeing the prices for procedures is incredibly refreshing: https://surgerycenterok.com/pricing

[lotsofpulp]

That is very interesting. I had always thought that price obfuscation was good for both healthcare providers and insurance companies, since any price obfuscation is an advantage for the seller while the buyer is left confused about how much they are paying for what.

[bart_spoon]

> Without the insurance companies, who would have the power negotiate pricing with the providers?

Healthcare costs have skyrocketed because of the negotiators. PBMs are the middlemen who negotiate healthcare prices between insurance companies and providers. I can't speak for hospitals and procedures, but in the pharmaceutical industry, it actually has led to a system where insurers and PBMs both benefit from drug prices increasing as opposed to decreasing. They aren't driving costs down, they are directly contributing to driving costs up.

[lotsofpulp]

Negotiation does not cause costs to rise, it’s because of lack of price transparency that let’s insiders play games.

Make all the prices public, and watch all the excuses disappear. No insurance company will be able to answer the government or employer when they find out another insurance company was able to obtain the same medicine or healthcare for a lower price.

[ajmurmann]

I posted a link in a parallel thread to a surgical center that has all their prices on their website. Insurance companies refuse to work with them, supposedly for the reasons you state. So you are correct.