Support Single-Payer Health Care, Part 2

Yesterday’s post pointed out how health care in the U.S. is the most expensive in the world, yet of low quality when compared with that in other nations.

Why is this?

The problem lies in the fact that health care in the U.S. is controlled by multi-billion, for-profit corporations. These corporations must, by law, maximize profits for their shareholders. And those profits have to cover commissions paid to agents and advertising and marketing costs, as well as bloated, extravagant seven-figure salaries and the many perks for CEOs, all of which consume over 18% of every dollar in overhead.

What most Americans don’t realize is that the U.S. already has a National Health Insurance program in place. It’s called Medicare, and if you are a taxpayer, you are already paying for it, though you may not be eligible for it.

Unlike private insurance companies, Medicare is not run on a for-profit basis; overhead runs around 3%.

Consider this: In 2005, UnitedHealth Group, the largest and most profitable private insurer in the U.S., had revenues of $45.3 billion. Operating costs made up $10 billion. UnitedHealth Group gave its CEO, William W. McGuire, a $124 million salary and $1.6 billion in stock options.

In contrast, the Medicare/Medicaid programs had revenues of $565 billion; operating costs were approximately $3.4 billion. Employee compensation cost? Just $400 million. Meanwhile, head administrator Leslie V. Norwalk was paid a yearly salary of $143,250.

Single-payer health care is not the same as “universal health care,” which is what Massachusetts governor and 2008 presidential candidate Mitt Romney recently signed into law in that state. Although it provides “sliding scale” subsidies to some low-income families and individuals, Massachusetts’s plan fails to address some of the more fundamental problems of a “for-profit” health care system, and requires the use of “health savings accounts” and “catastrophic” coverage plans with high deductibles.

Treatment for diseases such as mesothelioma can run into high five- and six-figure costs each year for patients. Considering that this and similar asbestos-related diseases affect mainly middle and working class individuals, the impracticality of “health savings accounts” become apparent.

In contrast with the Romney plan, in which thousands of for-profit companies with high overhead pay for some claims while the state government pays others, “single-payer” health care is the responsibility of the central government. One agency handles all claims, and since it is a government agency, the profit motive is removed, resulting in a much lower overhead.

To be continued…

Sources

CNNMoney.com. “United Health Services”. http://money.cnn.com/magazines/fortune/fortune500/snapshots/1499.html

Forbes. “William W. McGuire”. http://www.forbes.com/static/execpay2005/LIRRI3M.html?passListId=12&passYear=2005&passListType=Person&uniqueId=RI3M&datatype=Person

Knox, Richard. “Romney’s Mission: Massachusetts Health Care.” National Public Radio Weekend Edition (Media Broadcast). 8 April 2006

Montgomery, Kelly. “What Is The Difference Between ‘Universal Coverage’ and a ‘Single Payer System’?” 20 October 2006. http://healthinsurance.about.com/od/faqs/f/universalsp.htm

Office of Management and Budget. “Department of Health and Human Services”. http://www.whitehouse.gov/omb/budget/fy2008/ hhs.html

On The Issues. “Dennis Kucinich on Health Care”. http://www.ontheissues.org/2004/Dennis_Kucinich_Health_Care.htm

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