Health care – overhead and out of control

by on February 17th, 2004

Ever been in a hospital billing office?

“Office” is quite an understatement. At our local hospital, it’s located in a separate building, with probably a hundred offices.

Each office is marked with the name of the insurance provider, and the first letter of the last names covered, such as “Medicare A-B”, “Medicare C-D”, “Blue Cross/Blue Shield E-F” and so on.

It’s a four-story building; I can’t even begin to estimate how many people are employed to file claims with all the different health insurance companies.

As Paul Krugman, writing in the NY Times says

A recent study found that private insurance companies spend 11.7 cents of every health care dollar on administrative costs, mainly advertising and underwriting, compared with 3.6 cents for Medicare and 1.3 cents for Canada’s government-run system.

When you pay your health insurance premium…..assuming you have health insurance….part of that money goes to pay the salaries of the clerical workers, the building that houses the insurance company and it’s upkeep, the advertising that tells us how wonderful and caring they are, and inflated executive salaries.

Just for starters, Michael McCallister – president and CEO of Humana, Inc., makes $1.65 million a year. John Rowe, chairman and CEO of Aetna pulls down a cool $6.68 million.

The health care industry is sitting on a gold mine, and they know it. Anyone who proposes changes in the way Americans pay for health care risks the wrath of their powerful lobby. Presidential candidates who advocate a single-payer system are brushed off as “fringe”.

John Kerry’s plan, which would allow all Americans to buy into the Federal Employees Health Care Benefits program (FEHBP), is an improvement on the haphazard, Russian-roulette system we have now. It’s not enough, but perhaps would get a foot in the door toward making health care a right, not a privilege, for all Americans.