Here is my entire 300 word NYT oped: Medicare should stop paying for treatments that the British Medical Journal says probably don’t work. Today, United States agencies that try to not pay for ineffective treatments face the wrath of Congress, egged on by the surgeons and drug companies whose revenue is threatened. So far, U.S. agencies have pretty much always backed down, and just paid for everything.
Administrative costs don't go away just because its government employees doing the administration. In fact in the US that work is often contracted out anyway. The percentage may be less for government programs in the US because the average person on Medicaid relieves more medical care than the average person on private insurance. If the medical care costs more but the administrative cost doesn't go up as much the percentage goes down.
Another reason government programs can have lower administrative costs is if they make less effort to catch fraud (although that could be considered an example of beneficial administrative costs, its not like its all waste or useless activity)Also a lot of the government's cost doesn't necessarily get counted as overhead or administrative cost. Insurance companies' advertising,premium collection and processing, etc. count as administrative costs. With the government the cost to collect taxes (and the cost to comply with them) doesn't get counted as administrative overhead. I don't think government promotion, information campaigns, and such get counted either. I think a lot of the comparisons of administrative costs are apples to oranges comparisons.Which doesn't mean that government administrative costs or more, or even that they are not lower. Economies of scale do help (although the larger American insurance companies are bigger than many national systems so they should benefit from it as well).
J, the staff that the NHS pays for are health care providers. Their salaries are part of the cost of health care. The staff that health insurance companies have do not provide health care. Their salaries are insurance company administrative costs not health care costs.
Administrative costs for Medicare are less than 2% of total expenditures (according to CBO).
There is absolutely no reason for the US government to buy insurance from anyone. Insurance is only needed by an entity if the entity is not large enough financially to even out the relatively infrequent large expenses. The US government is the largest financial entity that there has ever been in the history of the world. The only reason the US government would buy insurance is to give profit to the insurance companies selling it.
You raise an interesting point. Do figures for health care expenditures in the UK include administrative costs? The idea that at least 30% of health care spending wouldn't go to administrative costs if the government ran the industry is...optimistic, to put it mildly.
From the NHS website :
"The NHS employs more than 1.7m people. Of those, just under half are clinically qualified, including 120,000 hospital doctors, 40,000 general practitioners (GPs), 400,000 nurses and 25,000 ambulance staff"
Right, but tacking on an extra 40% administrative overhead and profit to a middleman doesn't make health care any cheaper, it makes it more expensive even if the biggest component is still health care.
I don't have a good explanation for the curious phenomenon of the life expectancy gender gap widening in Japan and closing in Europe, could it be that Japan has fewer full-time-working women? I would think that something like a low stress part time job is most conducive to longevity, but have no statistics to back that up.
That higher "cancer survival rate" comes from earlier diagnosis and earlier treatment and is an artifact.
The "start date" for cancer survival is from date of treatment. If two people are the same age and with the exact same cancer, but you treat one of them a year earlier, even if they die on the exact same day, because one of them was treated a year earlier, they have a year longer "cancer survival" time.
There are two big factors that the UK doesn't have to pay for, the administrative costs that US health insurance companies use do deny health insurance to "high risk" individuals (something like 30% of health insurance premiums) and insurance company profits.
There is absolutely no reason for the US government to buy insurance from anyone. Insurance is only needed by an entity if the entity is not large enough financially to even out the relatively infrequent large expenses. The US government is the largest financial entity that there has ever been in the history of the world. The only reason the US government would buy insurance is to give profit to the insurance companies selling it.
As a further point, naked life expectancy doesn't account for differences in lifestyle and disease incidence in U.S. v. U.K. Our heightened expenditures could allow us to live as long as the Brits even though we have more obesity, diabetes, etc. I saw a study in the Lancet showing that cancer survival rates were way higher in the U.S. than in the U.K.
I'm surprised to learn that Britain, which has a lot more social services than the U.S. does, spends less on health care as a percentage of its GDP. I wonder how much administration plays a role in U.S. health care costs.
I got the trends from Sandeep's second link, to Yglesias.
I don't see your suggestions distinguishing Japan from Europe. I suppose that if smoking is male in Japan, but not Europe, that would explain larger sex gap in Japan, but it wouldn't explain the trend.
That "18%" link doesn't seem to link to something that actually contains that factoid - or more importantly, a summary of what the spending was.
Remember, there's a lot of voluntary, personally-financed cosmetic medical expenditure in the US that doesn't seem to happen in the UK.
(Does this number include dental expenditures? Say... braces and whitening and the like?
I can't find numbers in a quick search, but certainly the mass of decades of talk about it from Britons suggests that in that area, Americans spend more because they desire straight teeth more.
And that adds up. A lot.)
Now, all the voluntary/cosmetic spending in the country won't make up the 9% GDP differential - but it's not zero either.
I'd like to know what it is, for one.
And I also don't like the idea that aggregate spending via NHS is comparable to aggregate spending from Federal medical care, private insurance, and Paying Cash For Care You Want are really comparable, and that "we" are the ones paying for the latter [or perhaps even the latter two].
"Americans" as a group don't pay for breast enlargements and braces - individuals do.
"The United Kingdom, where, on average, people live longer than in the U.S."
Are you sure that's true? I'm always suspicious of claims like this, mainly because one of the biggest drivers is infant mortality, a self reported statistic distorted by wildly differing definitions of live birth from one country to another. Based on the stats above on life expectancy at 65, it appears to be incorrect.
At least they wouldn't be for profit insurance company death panels.
Administrative costs don't go away just because its government employees doing the administration. In fact in the US that work is often contracted out anyway. The percentage may be less for government programs in the US because the average person on Medicaid relieves more medical care than the average person on private insurance. If the medical care costs more but the administrative cost doesn't go up as much the percentage goes down.
Another reason government programs can have lower administrative costs is if they make less effort to catch fraud (although that could be considered an example of beneficial administrative costs, its not like its all waste or useless activity)Also a lot of the government's cost doesn't necessarily get counted as overhead or administrative cost. Insurance companies' advertising,premium collection and processing, etc. count as administrative costs. With the government the cost to collect taxes (and the cost to comply with them) doesn't get counted as administrative overhead. I don't think government promotion, information campaigns, and such get counted either. I think a lot of the comparisons of administrative costs are apples to oranges comparisons.Which doesn't mean that government administrative costs or more, or even that they are not lower. Economies of scale do help (although the larger American insurance companies are bigger than many national systems so they should benefit from it as well).
J, the staff that the NHS pays for are health care providers. Their salaries are part of the cost of health care. The staff that health insurance companies have do not provide health care. Their salaries are insurance company administrative costs not health care costs.
Administrative costs for Medicare are less than 2% of total expenditures (according to CBO).
http://krugman.blogs.nytime...
Health insurance companies have larger non-health related administration costs plus they make a profit too.
There is absolutely no reason for the US government to buy insurance from anyone. Insurance is only needed by an entity if the entity is not large enough financially to even out the relatively infrequent large expenses. The US government is the largest financial entity that there has ever been in the history of the world. The only reason the US government would buy insurance is to give profit to the insurance companies selling it.
You raise an interesting point. Do figures for health care expenditures in the UK include administrative costs? The idea that at least 30% of health care spending wouldn't go to administrative costs if the government ran the industry is...optimistic, to put it mildly.
From the NHS website :
"The NHS employs more than 1.7m people. Of those, just under half are clinically qualified, including 120,000 hospital doctors, 40,000 general practitioners (GPs), 400,000 nurses and 25,000 ambulance staff"
and
"Some 60% of the NHS budget is used to pay staff"
It would appear your first sentence is incorrect.
Right, but tacking on an extra 40% administrative overhead and profit to a middleman doesn't make health care any cheaper, it makes it more expensive even if the biggest component is still health care.
The biggest component of health care costs is health care.
I don't have a good explanation for the curious phenomenon of the life expectancy gender gap widening in Japan and closing in Europe, could it be that Japan has fewer full-time-working women? I would think that something like a low stress part time job is most conducive to longevity, but have no statistics to back that up.
That higher "cancer survival rate" comes from earlier diagnosis and earlier treatment and is an artifact.
The "start date" for cancer survival is from date of treatment. If two people are the same age and with the exact same cancer, but you treat one of them a year earlier, even if they die on the exact same day, because one of them was treated a year earlier, they have a year longer "cancer survival" time.
There are two big factors that the UK doesn't have to pay for, the administrative costs that US health insurance companies use do deny health insurance to "high risk" individuals (something like 30% of health insurance premiums) and insurance company profits.
There is absolutely no reason for the US government to buy insurance from anyone. Insurance is only needed by an entity if the entity is not large enough financially to even out the relatively infrequent large expenses. The US government is the largest financial entity that there has ever been in the history of the world. The only reason the US government would buy insurance is to give profit to the insurance companies selling it.
As a further point, naked life expectancy doesn't account for differences in lifestyle and disease incidence in U.S. v. U.K. Our heightened expenditures could allow us to live as long as the Brits even though we have more obesity, diabetes, etc. I saw a study in the Lancet showing that cancer survival rates were way higher in the U.S. than in the U.K.
The US Government, by itself, pays more (on a per-capita basis) than most other countries spend, in total, on health care.
I'm surprised to learn that Britain, which has a lot more social services than the U.S. does, spends less on health care as a percentage of its GDP. I wonder how much administration plays a role in U.S. health care costs.
I got the trends from Sandeep's second link, to Yglesias.
I don't see your suggestions distinguishing Japan from Europe. I suppose that if smoking is male in Japan, but not Europe, that would explain larger sex gap in Japan, but it wouldn't explain the trend.
That "18%" link doesn't seem to link to something that actually contains that factoid - or more importantly, a summary of what the spending was.
Remember, there's a lot of voluntary, personally-financed cosmetic medical expenditure in the US that doesn't seem to happen in the UK.
(Does this number include dental expenditures? Say... braces and whitening and the like?
I can't find numbers in a quick search, but certainly the mass of decades of talk about it from Britons suggests that in that area, Americans spend more because they desire straight teeth more.
And that adds up. A lot.)
Now, all the voluntary/cosmetic spending in the country won't make up the 9% GDP differential - but it's not zero either.
I'd like to know what it is, for one.
And I also don't like the idea that aggregate spending via NHS is comparable to aggregate spending from Federal medical care, private insurance, and Paying Cash For Care You Want are really comparable, and that "we" are the ones paying for the latter [or perhaps even the latter two].
"Americans" as a group don't pay for breast enlargements and braces - individuals do.
"The United Kingdom, where, on average, people live longer than in the U.S."
Are you sure that's true? I'm always suspicious of claims like this, mainly because one of the biggest drivers is infant mortality, a self reported statistic distorted by wildly differing definitions of live birth from one country to another. Based on the stats above on life expectancy at 65, it appears to be incorrect.