[jdonn]

Poor word choice? It wasn't even opinion stated as fact, it was fiction stated as fact. Come on...

[Winstonm]

jdonn, on Dec 25 2009, 09:48 PM, said:

Poor word choice? It wasn't even opinion stated as fact, it was fiction stated as fact. Come on...

Obviously, this is way wrong, too.

Quote

Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada.

Source? The New England Journal of Medicine http://content.nejm....short/349/8/768

What did that crazy Canadian say??? Oh, yeah,

Quote

The provincial single-payer system in Canada operates with just a 1 percent overhead. (Crazy Canadian Quote)

Quote

Canada's national health insurance program had overhead of 1.3 percent (New England Journal of Medicine Quote)

You just can't trust those lying point-three-ers. Worse than teabaggers....

[mike777]

Winston, Winston Winston....did you even bother look at this study.


1) It was written on what 1999 or older data.
2) It was written by MD's who seem to have no idea of accounting and accounting terms such as overhead.
3) Look at how they define and count overhead costs.
4) administrative costs is not the same as overhead costs.


"In business, overhead, overhead cost or overhead expense refers to an ongoing expense of operating a business (also known as Operating Expenses - rent, gas/electricity, wages etc). The term overhead is usually used to group expenses that are necessary to the continued functioning of the business, but do not directly generate profits."






"Overhead expenses are all costs on the income statement except for direct labor and direct materials. Overhead expenses include accounting fees, advertising, depreciation, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone bills, travel and utilities costs.[1]"






Think about it...on the face do you really think wages, rent etc etc costs only 1% to run a system...yes if you do not count most of the costs.

[hrothgar]

mike777, on Dec 26 2009, 05:27 PM, said:

Winston, Winston Winston....did you even bother look at this study.


1) It was written on what 1999 or older data.
2) It was written by MD's who seem to have no idea of accounting and accounting terms such as overhead.
3) Look at how the define and count overhead costs.



Think about it...on the face do you really think wages, rent etc etc costs only 1% to run a system...yes if you do not count most of the costs.

Its entirely possible that the definition of "overhead" as used in this article is different from that used by an accountant.

With this said and done, it would still be interesting to understand where these differences come from.

[Winstonm]

Mike,

I am sorry if these results and conclusions differ from your personal viewpoints....

(emphasis added)

Quote

Results In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada.

Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations' figures exclude insurance-industry personnel.)

Conclusions The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system.

It seems plain to me that the U.S. does a better job than Canada of managing costs within similar systems (private systems), but Canada's model is far less costly based on lower administration costs than the U.S. model.

[mike777]

I do note that the health care system includes much more than hospitals and primary care doctors. The entire system should include, medical equipment and suppy companies, druc companies, etc etc. This study seems to not look at any of that.


With all of that said...who would argue that there is waste in the system, in any system. The trick is actually getting rid of it rather than just claiming to get rid of it. Good luck.

[mike777]

FWIW I saw this


http://www.heritage....care/wm2505.cfm



"Health care reform is a complex problem, of which administrative costs is only one component. However, for policymakers and ordinary Americans to understand these issues, journalists, analysts, and advocates have an obligation to avoid "playing with numbers"--either through inadvertent misunderstanding of what the numbers represent or through a deliberate choice of misleading numbers that appear to support a desired"



"The fact is that, in recent years, Medicare administrative costs per beneficiary have substantially exceeded those costs for the private sector, this despite the fact that, as critics note, private insurance is subject to many expenses not incurred by Medicare. Contrary to the claims of public plan advocates, moving millions of Americans from private insurance to a Medicare-like program will result in program administrative costs that are higher per person "

[Winstonm]

Quote

Methods For the United States and Canada, we calculated the administrative costs of health insurers, employers' health benefit programs, hospitals, practitioners' offices, nursing homes, and home care agencies in 1999.

I don't mean to beat a dead horse, but consider that in the primary Canadian system there is zero administrative costs for health insurers and employer's health benefit programs...

Can you imagine the savings to business by not having to arrange and help pay for health insurance benefits for employees???

Quote

"Health care reform is a complex problem, of which administrative costs is only one component. However, for policymakers and ordinary Americans to understand these issues, journalists, analysts, and advocates have an obligation to avoid "playing with numbers"--either through inadvertent misunderstanding of what the numbers represent or through a deliberate choice of misleading numbers that appear to support a desired"

I agree that it is easy to manipulate numbers - but at the same time common sense should tell you that if you don't need insurers and employee health benefits you won't have any administrative costs for either of those.

[Winstonm]

Quote

"The fact is that, in recent years, Medicare administrative costs per beneficiary have substantially exceeded those costs for the private sector, this despite the fact that, as critics note, private insurance is subject to many expenses not incurred by Medicare. Contrary to the claims of public plan advocates, moving millions of Americans from private insurance to a Medicare-like program will result in program administrative costs that are higher per person "

The rub lies in the fact that Medicare is only a partial system - it cannot be compared to a total government single payer as Canada uses.

To claim higher costs and then extrapolate those costs as the same under a complete coverage plan is disingenuous IMO.

Think about it - if every citizen in the U.S. were automatically covered by a system such as the one in Canada, there would be little need for administrative overhead and the entire billing/paying process could be streamlined. On a percentage bases, that would lower administrative costs.

Ih the U.S., we continually try to work within the confines of our existing system instead of totally revamping the system itself - and then we claim the problem of the existing system would automatically follow us into a unique system because we can't imagine a radical change in the status quo.

The sad part is that we probably cannot change, as the political power bases would not allow radical change to their power infrastructure.

[PassedOut]

Winstonm, on Dec 26 2009, 09:52 AM, said:

Can you imagine the savings to business by not having to arrange and help pay for health insurance benefits for employees???

I certainly can!

[mike777]

this discussion got me thinking, just what the heck are admin expenses and how are they measured.

For example is fighting fraud an admin expense? I dont know. Is actual fraud an admin expense?

FWIW I found this one article.


http://voices.washingtonpost.com/ezra-klei..._in_health.html



Administrative costs are one of the more confusing issues in health-care reform. Start with the term: What counts as an "administrative cost" for a health insurer? We all agree that paying bills counts. But does profit? What about disease management? Advertising? A nurse who dispenses health advice over the telephone?

Hard to say. But all of them get grouped under administrative costs at various times. Indeed, I've spent the last few weeks looking into studies and talking to experts, and there's not perfect unanimity on how to measure any of this. But most seem to think that Medicare's administrative costs are significantly undersold in the public debate. An apples-to-apples comparison would not leave you with the 2 percent of total Medicare spending often bandied about in debate. That doesn't count, for instance, Medicare's premium collection, which is done through the tax code, and thus through the IRS. Nor does it count most of Medicare's billing, which is outsourced -- and this might surprise people -- to private insurers like Blue Cross Blue Shield and listed under vendor services rather than program administration. A more straightforward estimate, according to experts I've spoken to, would be in the range of 5 to 6 percent.

[Winstonm]

mike777, on Dec 26 2009, 03:00 PM, said:

this discussion got me thinking, just what the heck are admin expenses and how are they measured.

For example is fighting fraud an admin expense? I dont know. Is actual fraud an admin expense?

FWIW I found this one article.


http://voices.washingtonpost.com/ezra-klei..._in_health.html



Administrative costs are one of the more confusing issues in health-care reform. Start with the term: What counts as an "administrative cost" for a health insurer? We all agree that paying bills counts. But does profit? What about disease management? Advertising? A nurse who dispenses health advice over the telephone?

Hard to say. But all of them get grouped under administrative costs at various times. Indeed, I've spent the last few weeks looking into studies and talking to experts, and there's not perfect unanimity on how to measure any of this. But most seem to think that Medicare's administrative costs are significantly undersold in the public debate. An apples-to-apples comparison would not leave you with the 2 percent of total Medicare spending often bandied about in debate. That doesn't count, for instance, Medicare's premium collection, which is done through the tax code, and thus through the IRS. Nor does it count most of Medicare's billing, which is outsourced -- and this might surprise people -- to private insurers like Blue Cross Blue Shield and listed under vendor services rather than program administration. A more straightforward estimate, according to experts I've spoken to, would be in the range of 5 to 6 percent.

Those appear to be fair questions. At the same time, I also believe it is fair (although extremely difficult to quantify) to say there would have to be administrative savings by doing away with the necessity of health care insurers and employee health care plans.

[luke warm]

Winstonm, on Dec 26 2009, 03:12 PM, said:

Those appear to be fair questions. At the same time, I also believe it is fair (although extremely difficult to quantify) to say there would have to be administrative savings by doing away with the necessity of health care insurers and employee health care plans.

medicare pays states and/or regional companies to administer benefits paid for meda and medb (and even medc and medd) claims... if it didn't do so, of if it did so itself, those costs would not go away... many are of the opinion that they would increase

[Winstonm]

luke warm, on Dec 26 2009, 04:29 PM, said:

Winstonm, on Dec 26 2009, 03:12 PM, said:

Those appear to be fair questions.  At the same time, I also believe it is fair (although extremely difficult to quantify) to say there would have to be administrative savings by doing away with the necessity of health care insurers and employee health care plans.

medicare pays states and/or regional companies to administer benefits paid for meda and medb (and even medc and medd) claims... if it didn't do so, of if it did so itself, those costs would not go away... many are of the opinion that they would increase

You are jumping in mid-discussion. I am not talking about the effects of changes within the status quo but in dumping the existing system entirely for a Canadian-style health care system.

There would be no need for Medicare - everyone is covered. That eliminates the preponderance of the administrative costs and surely removes all the administrative costs of inherent in health insurance and in employee plans.

It is fact that Canada has administrative costs less than 1/3 of those in the U.S. They also spend per capita less than 1/2 of what the U.S. pays. I suspect there is more than mere correlation between those figures.

[bid_em_up]

andrei, on Dec 24 2009, 11:52 PM, said:

cherdanno, on Dec 24 2009, 11:18 AM, said:

andrei, on Dec 24 2009, 10:16 AM, said:

cherdanno, on Dec 23 2009, 04:02 PM, said:

In Germany, we pay a little bit more in taxes ...

is it twice more "a little bit" ?


ok, maybe twice more is as exaggeration, but "a little bit more" it is too.

edit again: it seems that twice more might be quite accurate:

a 75000 euros/year will pay 33% income tax
a 75000 US/year will pay 20% income tax

if you factor in the sales tax, 19% versus 4%-8% you are getting there ...

Lol, maybe you should start by comparing similar incomes, instead of comparing a 75k $ salary with a 105k $ salary.

I am wondering if you try to be sarcastic, but whatever ...

75,000 Eur != $75,000 US.

75,000 Eur. = $108,000 US (approx. based on exchange rate of 1.438)

This is what is meant by.....comparing similar incomes, imo.

and fwiw, my local sales tax rate is 9.5% and is constantly trying to be increased for various special local projects. ymmv.

[luke warm]

Winstonm, on Dec 26 2009, 06:00 PM, said:

luke warm, on Dec 26 2009, 04:29 PM, said:

Winstonm, on Dec 26 2009, 03:12 PM, said:

Those appear to be fair questions.  At the same time, I also believe it is fair (although extremely difficult to quantify) to say there would have to be administrative savings by doing away with the necessity of health care insurers and employee health care plans.

medicare pays states and/or regional companies to administer benefits paid for meda and medb (and even medc and medd) claims... if it didn't do so, of if it did so itself, those costs would not go away... many are of the opinion that they would increase

You are jumping in mid-discussion. I am not talking about the effects of changes within the status quo but in dumping the existing system entirely for a Canadian-style health care system.

There would be no need for Medicare - everyone is covered. That eliminates the preponderance of the administrative costs and surely removes all the administrative costs of inherent in health insurance and in employee plans.

It is fact that Canada has administrative costs less than 1/3 of those in the U.S. They also spend per capita less than 1/2 of what the U.S. pays. I suspect there is more than mere correlation between those figures.

ahh... ok... in la, the admin costs (which i realize has many definitions) run <4% - this includes all equipment and pay for those working at the agency that administers the insurance... as a practical matter it means that $.96 of every dollar taken in premiums is available to pay benefits

[PassedOut]

luke warm, on Dec 29 2009, 11:17 AM, said:

ahh... ok... in la, the admin costs (which i realize has many definitions) run <4% - this includes all equipment and pay for those working at the agency that administers the insurance... as a practical matter it means that $.96 of every dollar taken in premiums is available to pay benefits

Yes, surely the right way to evaluate health insurance efficiency is by the percentage of the funds collected that is available to pay claims.

Other approaches to making health care more efficient need understandable metrics also, and I think that in many cases they should be based on overall outcomes. We've just got to get a handle on these costs.

Ken has discussed the problem of unnecessary tests and medications, which boost the cost of care unacceptably (in my opinion). I consider it important to define (based on actual outcomes) which tests will be paid for and which will not. Physicians would not be subject to malpractice suits for failing to authorize tests not called for by those guidelines. This appraoch would also remove the profit motive behind buying expensive equipment and then using it to test every tom, dick, and harry who comes into the office.

I know that this is not a simple thing to implement and that there will be bumps on the road. But we just have to get going with it.

[andrei]

bid_em_up, on Dec 28 2009, 03:54 PM, said:

andrei, on Dec 24 2009, 11:52 PM, said:

cherdanno, on Dec 24 2009, 11:18 AM, said:

andrei, on Dec 24 2009, 10:16 AM, said:

cherdanno, on Dec 23 2009, 04:02 PM, said:

In Germany, we pay a little bit more in taxes ...

is it twice more "a little bit" ?


ok, maybe twice more is as exaggeration, but "a little bit more" it is too.

edit again: it seems that twice more might be quite accurate:

a 75000 euros/year will pay 33% income tax
a 75000 US/year will pay 20% income tax

if you factor in the sales tax, 19% versus 4%-8% you are getting there ...

Lol, maybe you should start by comparing similar incomes, instead of comparing a 75k $ salary with a 105k $ salary.

I am wondering if you try to be sarcastic, but whatever ...

75,000 Eur != $75,000 US.

75,000 Eur. = $108,000 US (approx. based on exchange rate of 1.438)

This is what is meant by.....comparing similar incomes, imo.

really?
you are earning your money in US and spending them in Germany?

anyway, you can multiply the Euros with 1,43 to get the american equivalent, but then everything will cost you almost double in germany.

just 2 examples:
same VW Jetta TDI : Germany starts at 23000, in US 23000
same VW Tiguan (2.0 TSI) : Germany starts at 28000, US starts at 23000

do the same exercise with clothes, food, gas.

[mike777]

I think trying to run a multi trillion dollar govt run program without huge input by politicians is a pipe dream.

Guidelines and most importantly their exceptions by definition will be political in nature.


We have discussed this many times. The demand for health care is unlimited, the supply is limited. One can simple switch the rationing methods from capital markets and put the decision making into politicians hands.

Nonpolitical health committees do not exist and never will.

Would anyone really want a committee to run health care that the voters had no say in?


If posters are going to suggest removing the profit motive fair enough but what motive do you really think you can replace it with in the health care system? Virtue?

Alot of these posts always seem to come down to one thing, lets not run a health care system motivated by greed or self interest but one based on being virtuous. Some may even prefer to call it Science based medical practice based on virtue motivation. This is opposed to a system say based on greed, self interest and using science to further motivate/reward that self interest.


Milton Friedman on Greed vs. Virtue.

http://www.youtube.c...h?v=RWsx1X8PV_A

[Lobowolf]

andrei, on Dec 29 2009, 12:49 PM, said:

bid_em_up, on Dec 28 2009, 03:54 PM, said:

andrei, on Dec 24 2009, 11:52 PM, said:

cherdanno, on Dec 24 2009, 11:18 AM, said:

andrei, on Dec 24 2009, 10:16 AM, said:

cherdanno, on Dec 23 2009, 04:02 PM, said:

In Germany, we pay a little bit more in taxes ...

is it twice more "a little bit" ?


ok, maybe twice more is as exaggeration, but "a little bit more" it is too.

edit again: it seems that twice more might be quite accurate:

a 75000 euros/year will pay 33% income tax
a 75000 US/year will pay 20% income tax

if you factor in the sales tax, 19% versus 4%-8% you are getting there ...

Lol, maybe you should start by comparing similar incomes, instead of comparing a 75k $ salary with a 105k $ salary.

I am wondering if you try to be sarcastic, but whatever ...

75,000 Eur != $75,000 US.

75,000 Eur. = $108,000 US (approx. based on exchange rate of 1.438)

This is what is meant by.....comparing similar incomes, imo.

really?
you are earning your money in US and spending them in Germany?

anyway, you can multiply the Euros with 1,43 to get the american equivalent, but then everything will cost you almost double in germany.

just 2 examples:
same VW Jetta TDI : Germany starts at 23000, in US 23000
same VW Tiguan (2.0 TSI) : Germany starts at 28000, US starts at 23000

do the same exercise with clothes, food, gas.

Income tax rates increase as a function of income in the US. It has nothing to do with the exchange rate. If you want to compare someone making 75,000 Euros with an American, you have to compare him with an American making over $100,000 a year, and that person is paying a higher percentage of his income to the federal government than an American making $75,000 a year.