Single payer doesn’t cut administrative costs. Boosters of single-payer health care claim that we can get rid of a lot of administrative overhead by getting rid of private health insurance. Meridian Paulton and Robert Moffit show why that claim is wrong:
Per capita administrative costs may be higher in Medicare. For instance, in 2009 they were $509 in Medicare and $453 in private insurance. Medicare costs are lower as a percentage of the total only because total claims costs tend to be much higher in Medicare than in private insurance. This is because Medicare’s older and less healthy population file the claims costs.
Medicare shifts administrative costs to doctors, hospitals, nursing homes, home health agencies, and other medical professionals who must comply with Medicare’s huge and complex regulatory requirements. Compliance with tens of thousands of pages of Medicare rules, regulations, guidelines, billing, and other paperwork requirements consumes vast amounts of time, energy, and effort on the part of the private-sector professionals who participate in the Medicare program.
Medicare fails to effectively control waste, fraud, and abuse in the program. This failure of administration results in the staggering loss of tens of billions of taxpayer dollars each and every year. Private-sector health plans, policing their billing, have no comparable record in accumulating such enormous losses.
[Meridian Paulton and Robert Moffit, “Why Single-Payer Would Make Health Care Worse for Americans,” The Daily Signal, September 25]
