How to get a leaner, better, less costly health care system

By John Perryman, M.D.
Chicago Sun-Times, Letters, November 3, 2017

We in the United States have a problem. Our health care system does not perform well. We lead industrialized nations in infant and maternal mortality, lag in life expectancy, and rank 81st in the world in mortality that could be prevented by good medical care. Despite this, we spend far and away the most for health care. Our per capita costs are about $10,000/year, whereas most industrialized nations are between $4,000 and $8,000.

About 17 percent of our economy goes to health care, compared with 8 percent to 11 percent in other Organization for Economic Co-operation and Development countries.

Administrative costs are much higher in the U.S. than elsewhere. We spend anywhere from 2 to 5 times more per capita on administrative costs than any other country. Private insurers spend from 10 percent to 30 percent of revenues on non- health care expenses. These include marketing, lobbying, profits, executive salaries, and denying care. In 2016, health insurers made over $13 billion in profits, with CEOs pulling down eight-figure salaries.

While the average administrative cost of private insurers is about 20 percent of revenues, traditional Medicare is about 3 percent.

Many medications cost 50 percent to 100 percent more here than elsewhere, and we spend twice the OECD average per capita. Drug prices are rising at about 16 percent a year.

What is single-payer, and what will it do? Based on the proposal in the House of Representatives (HR 676), it is a government funded national health insurance plan. Providers and hospitals will not be owned by the government; HR 676 is not socialized medicine. Everyone is covered for their entire lifetime. Comprehensive coverage is provided for medical, dental, pharmaceutical, eye and long-term care.

There is no cost sharing, such as deductibles, co-pays or co-insurance. How can we afford this? By eliminating private health insurance for these services and cutting out hundreds of billions in administrative costs that add no value to our system. By having a single national network that can effectively negotiate prices with pharmaceutical and medical device makers.  Single-payer will result in a leaner, better performing system with improved care and lower costs. Lives will be saved, and suffering reduced. It is time.