Improved Efficiency
via Improved Medicare for All

Cut costs by over $400 billion per year.

An improved administrative efficiency will be realized with Improved Medicare for All via single-payer health care, which has only one health insurance plan. More of the money intended for health care will be spent on health care.

Summary of the data that is provided below

Administrative costs about 1/3 (an estimated 31%; conservatively: 25-30%) of total health care spending!
Administrative cost-cutting = over $400 billion per year (update from original estimate of $350 billion)
Cost to cover uninsured = est. $150 billion (update from previous estimate of $100 billion)

Conclusion

We need to implement the significantly improved administrative efficiency of Improved Medicare for All.

Confession

I confess that this particular web page has very rough estimates of the massive cost-cutting.

Exact numbers don’t mean much when one is trying to decide between the following choices:

Over $400 billion cost decrease EVERY YEAR
… or …
$300 billion cost increase over ten years

A reasonable person will certainly choose a massive decrease in our costs in hundreds of billions of dollars over an increase in costs of billions of dollars. We must get this common sense action underway.

Bob Haiducek

Data

• An in-depth analysis (pdf) of all administrative costs associated with health care was done by Woolhandler, Campbell, and Himmelstein . The analysis compared Canada and the United States. — New England Journal of Medicine 8-21-2003 August 21, 2003.
  • The study is based on a consideration of all health system administration, not just the overhead of the hundreds of private insurers. For example, physicians and hospitals must have large billing staffs to deal with the private health insurance companies.
  • The Calculation The result of this thorough study is that about 31%, roughly a third, of U.S. health care spending goes for administration. The total health care spending is about $2.2 trillion. Therefore, moving to the improved efficiency of single-payer that saves at least half of the roughly $700 billion of administrative costs will provide at least $350 billion that can then be spent on health care instead of administration.
• Cost to Cover Uninsured A very rough figure for covering the uninsured is $70 billion per year based on multiple sources from several years ago. I rounded that to $100 billion for this web page, then projected it to 2010 (above). I heard a radio interview with economist Uwe Reinhardt of Princeton, who also mentioned $150 million as an updated figure for covering the uninsured. — Bob
  

Further reading:

The following additional studies do not include all costs, compared to the in-depth analysis above:

• One economist estimates in his report (pdf) a roughly 10% difference between single-payer and the current methods of financing.
• Another economist estimates about 14%¹.