This is why I suspect that administrative cost-cutting will NOT be a major mechanism of savings under national health insurance.
It's all about crushing overpricing at hospitals and other providers.
It's all about crushing overpricing at hospitals and other providers.
For decades we've been told - or at least led to believe - that it's the insurance companies that are the problem with health care in America. When actually it's almost entirely the providers that are the problem.
Lots of people just assume national health insurance would mean cheaper health care, based on Europe and on Medicare. That's not necessarily a *bad* assumption. But when challenged to explain *how* national health insurance saves money, many people don't seem to know...
The right answer is that national health insurance has monopsony power, and can thus bargain for lower prices (though we could also allow Medicare to do more of this, even without changing our insurance system!).
Any health plan that uses monopsony power (or price controls, I guess) to crush overpricing will look like a success, even if it isn't national insurance.
And if national insurance for some reason *isn't* allowed to crush overpricing, it'll look like an epic failure.
And if national insurance for some reason *isn't* allowed to crush overpricing, it'll look like an epic failure.
The purpose of national health insurance is A) getting rid of hassle and uncertainty, and B) using monopsony power to crush providers' monopoly power.
Eliminating health insurance industry profits, or lowering administrative costs, is a tiny drop in the bucket.
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Eliminating health insurance industry profits, or lowering administrative costs, is a tiny drop in the bucket.
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