By Dave Zweifel, Cap Times editor emeritus
The Capital Times (Madison, Wis.), July 13, 2011
The American Medical Association, the organization that represents most of the nation’s doctors, claimed at its recent convention in Chicago that health insurance companies are inaccurately processing nearly one in five medical claims.
In its annual report on the health insurance industry, the AMA reported that commercial insurance companies had an error rate of 19.3 percent in 2010, 2 percent higher than the year before.
Dr. Barbara McAneny, a member of the AMA board of directors, said the error rate “represents an intolerable level of inefficiency that wastes $17 billion annually.”
“Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars and reduce unnecessary administrative tasks that take time and resources away from patient care,” she added.
These commercial health insurers, it should be noted, are the very people who Rep. Paul Ryan and some of his Republican colleagues in Congress insist ought to be handling Medicare a few years from now.
Somehow, Ryan and his allies deduce that letting private insurers into the Medicare business would save money. That’s a strange notion since private insurers spend as much as 20 percent on administrative costs while the government-run Medicare program has overhead costs of from 2 to 3 percent. Perhaps Ryan’s voucher plan would somehow save the government money, but it would shift those costs onto the country’s senior citizens, those in most need of medical care.
Indeed, it’s the United States’ multilayered and convoluted health care system that has American citizens and the companies they work for spending roughly double the amount it costs most countries in the free world. Yet Congress refuses to come to grips with the problem, yielding to the lobbying and campaign contributions by the health industry, whose only interest is protecting the status quo.
Congress won’t even discuss a single-payer system that, in effect, would expand Medicare to everyone, from birth to death, a system that Canada, England, Germany and countless others have been using for years. Instead, we wind up about once a decade tweaking a system that already is unwieldy and confusing and making little gains in covering uninsured Americans and harnessing the skyrocketing costs of American health care.
Yes, the Medicare payroll tax would need to be increased, but the savings for both individuals and companies, who would no longer need to pay the premiums and administer their own health care plans, would far exceed those costs. Although President Obama’s new health care reform is a step forward, it still is confusing and the savings won’t be anywhere close to what a true single-payer system would generate.
The state of Vermont recently became the first state to pass a universal single-payer plan, which will be phased in over the next few years. The state will pool its Medicaid funds with other state resources to provide health coverage to every Vermonter. Harvard economist William Hsiao predicts that the Vermont plan will produce savings of 24.3 percent of total health care expenditures between 2015 and 2024.
Perhaps the rest of the country will learn from Vermont just as the country of Canada learned from Saskatchewan, which started its own single-payer plan years ago and the rest of the provinces followed suit when they found it worked.
If our politicians truly want to reduce health care costs for both working people and the companies that employ them, they’d begin a debate on how the United States could offer all its citizens a single-payer plan that is fair to all.
Instead, we’re debating how to reduce Medicare coverage for our seniors and, at the same time, directing more taxpayer money to the sector most responsible for already out-of-control health care costs.
Dave Zweifel is editor emeritus of The Capital Times.