In my too long queue of posts waiting to be finished were several that linked to Paul Krugman's column in the New York Times. As part of my effort to clean up unfinished work, but also to get the those with Krugman links up before the Times starts charging for access to their op-ed columns, here's one of them.
In, Passing the Buck Paul Krugman referenced some World Health Organization (WHO) data, and pointed to the efforts of private insurers "trying to get someone else to pay the bills," as the explanation for why we spend so much more on health care than other developed countries without appearing to get much benefit for it.
According to the World Health Organization, in the United States administrative expenses eat up about 15 percent of the money paid in premiums to private health insurance companies, but only 4 percent of the budgets of public insurance programs, which consist mainly of Medicare and Medicaid. The numbers for both public and private insurance are similar in other countries - but because we rely much more heavily than anyone else on private insurance, our total administrative costs are much higher.
Well trust me, the public sector may pay a smaller percentage, but it's not as if it isn't also trying to shift the costs elsewhere. You can read Paul Castellani's book, From Snake Pits to Cash Cows for example or talk to any number of people who've made their careers in state government by figuring out how to Medicaid (as a verb) new services in order to draw Federal funds. (Using Medicaid as a verb is insider talk and it refers to changing, sometimes distorting, program configurations primarily to draw funds.) Or talk to home care managers who are pressured by Medicaid agencies to bill Medicare first, sometimes pushing them close to the point of being charged with Medicare fraud. It's all the same system behavior, an inevitable by-product of having multiple payers.
Nevertheless, Krugman's larger point is correct.