US (PT) — An important study was reported on January 7th in the scientific journal Annals of Internal Medicine, published by the American College of Physicians. It’s titled “Health Care Administrative Costs in the United States and Canada, 2017”.
Canada doesn’t have the best healthcare system in the world, nor the least expensive, but among industrialized nations, it scores about average on quality of healthcare, and also average on per-capita healthcare costs. By contrast, the United States scores below average on quality, and by far as the world’s costliest, with the world’s highest per-capita healthcare costs and also with the highest percentage of the nation’s GDP that goes to pay for healthcare. The World Health Organization rates quality of care in the various nations, and whereas Canada rates low among industrialized nations, U.S. rates at the bottom amongst them. An analysis as to why these two adjoining countries have such drastically different healthcare-results is long overdue, but finally it has come; and what it shows is that Americans are being robbed blind by the investors in America’s healthcare corporations and by the U.S. politicians who have been doing their bidding such as all Republicans and ‘moderate’ Democrats, who have been defending the U.S. system of paying for healthcare and arguing for only yet more tinkering with that system in order to get it up to international standards (i.e., for it to no longer be at the bottom of the OECD countries).
Here is the “Abstract” or summary that opens this historic article:
Before Canada’s single-payer reform, its payment system, health costs, and number of health administrative personnel per capita resembled those of the United States. By 1999, administration accounted for 31% of U.S. health expenditures versus 16.7% in Canada. No recent comprehensive analyses of those costs are available.
To quantify 2017 spending for administration by insurers and providers.
Analyses of government reports, accounting data that providers file with regulators, surveys of physicians, and census-collected data on employment in health care.
United States and Canada.
Insurance overhead; administrative expenditures of hospitals, physicians, nursing homes, home care agencies, and hospices.
U.S. insurers and providers spent $812 billion on administration, amounting to $2497 per capita (34.2% of national health expenditures) versus $551 per capita (17.0%) in Canada: $844 versus $146 on insurers’ overhead; $933 versus $196 for hospital administration; $255 versus $123 for nursing home, home care, and hospice administration; and $465 versus $87 for physicians’ insurance-related costs. Of the 3.2–percentage point increase in administration’s share of U.S. health expenditures since 1999, 2.4 percentage points was due to growth in private insurers’ overhead, mostly because of high overhead in their Medicare and Medicaid managed-care plans.
Estimates exclude dentists, pharmacies, and some other providers; accounting categories for the 2 countries differ somewhat; and methodological changes probably resulted in an underestimate of administrative cost growth since 1999.
The gap in health administrative spending between the United States and Canada is large and widening, and it apparently reflects the inefficiencies of the U.S. private insurance–based, multipayer system. The prices that U.S. medical providers charge incorporate a hidden surcharge to cover their costly administrative burden.
Primary Funding Source:
Here are typical numbers in the study’s findings:
In U.S. hospitals, 26.6% “of total expenditures” are “devoted to administration.”
In Canadian hospitals, 13.1% are — less than half as much.
In U.S. insurers, 9.6% goes to “overhead.”
In Canadian insurers, 3.8% does — again less than half.
In U.S. nursing homes, 26.7% goes to “administration.”
In Canadian ones, the estimated figure is 16.375%.
In U.S. home health care agencies and hospices, 39.8% goes to “administration.”
In Canadian ones, 13.0% does — less than a third as much.
In U.S., 21.8% of “gross receipts” in physicians’ offices pay for “administration.”
In Canada, that figure is 10.78% — again less than half.
“Health care administrative costs in the United States in 2017 totaled $2497 per capita, or 34.2% of total spending in the categories for which data are available. The comparable estimates for Canada are $551 per capita, or 17.0% of expenditures.”
The explanations as to why socializing the healthcare function produces enormously more cost-efficient and higher quality health care are too complex for a short article such as this, and therefore won’t be discussed here. Suffice it to say that Republican-Party economics (100% capitalism) is maximally designed to benefit the nation’s stockholders, and Democratic Party economics compromises that exclusive concern for investors by providing the rhetoric of concern about other people than stockholders, while still adhering mainly to protecting and improving corporate profits (so being only around 90% capitalism — which still is among the world’s most-capitalist).
As Warren Buffett has said, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” In order to achieve that ongoing victory, lots of money has to be spent on ‘educating’ the public to believe that in capitalism there is only the democratic variety.
The United States is the only industrialized nation — and one of the minority among all nations — that doesn’t treat healthcare as being a right (“universal health care”) but instead as a privilege (available only to those who are lucky enough to afford it). In other words; most Americans are obsessively afraid of “socialism” — even of the democratic variety that’s practiced in so many countries. Most Americans have been fooled by the investors in healthcare corporations and by those investors’ agents in Congress and in the White House for so many decades — the unceasing propaganda against “socialism” — the propaganda against human necessities (such as basic healthcare) being handled as a right instead of as a privilege that’s available only to the people who can afford it.
This is how America became a fascist country a country ruled by its richest.
(Prior to 1919, there had been instead the forerunner of fascism, which was called “feudalism.” Mussolini created fascism, to replace that. He also instituted the world’s first privatizations of Government-owned assets. In America, privatizations are equated with democracy, though that’s actually only ‘democracy’ — it’s part of the aristocratic con.)
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.