Reply #66: OK, total health care expenditures in 2005(latest data I could find), was 2 trillion dollars...

[Solon]

Source:

http://www.nchc.org/facts/cost.shtml

These equals about 6,700 dollars for everyone within the United States. OK, so, where are the inefficiencies in the system? Let's look, shall we?

First are administrative costs, which, for our private system is about 30%. This is money that doesn't go into medical care at all, but is eaten up by pencil pushers in the hundreds of different insurance companies, hospitals, etc. that exist in the United States. Contrast this with Medicare, with a 3% or so of overhead, and you can see where some savings can come in for a publicly funded system. In comparison, Canada's administrative costs are about 1.2%.

Source:

http://www.pnhp.org/news/2003/august/administrative_costs.php

So, let's cut 27%(30-3) off the 2 trillion dollars. So that reduces the cost to about 1,460 Billion dollars. Some progress, but not enough to alleviate some of the worse cost increases. So, let's continue...

The next big money item would be perscription drug costs, which account for about 11% of medical expenditures in the United States. Source is here:

http://www.kaiseredu.org/topics_im.asp?id=352&parentID=68&imID=1

Now, the big difference between the United States and other developed nations is that the government cannot negotiate prices nor are any price controls implemented. Compared to Canada, U.S. drug prices are about 67% more expensive on average, source here:

http://www.aarp.org/research/international/perspectives/jul_03_rxprices_canada.html

So, we take the original health care cost in my subject line, and find out what 11% of that is, which is 220 billion dollars. Now, under a Single Payer plan, I would think it would be a good idea to implement a drug pricing policy similar to Canada, so we should see similar savings. So take the 220 billion, and subtract 67% off its costs, and you reduce the drug costs to 72.6 Billion dollars, that's a savings of 147.4 Billion Dollars. This is chump change, that much is true, but then again, every little bit helps.

So far we reduced the total expenditures to about 1,312.6 billion dollars. On a per capita basis, this is about 4,375.33 dollars per person. Still not as low as Canada, which is at about 3,165 dollars per person. There are other factors that can reduce overall United States health care costs. Most lower income working families now, not being able to afford co-pays or deductibles, even if they have insurance, do not go to the doctor for regular checkups, and therefore increase total costs of health care when they don't come in until problems arise. Preventative care can be encouraged, reducing costs even more. Other ideas include negotiation, not only for drugs, but also services as well, which can contribute to other costs savings. Unfortunately, its hard to find figures for what the difference of these would be, so, as of right now, I will not claim any more savings in my current figure.

Let's compare this total Single Payer system with what we spend now, right now, combined, Medicare and Medicaid cost about 670.9 Billion dollars when taken together. Now, since the 2 trillion already takes these two systems into account, we are seeing, basically, a doubling of the Medical Health Care budget in the United States. The question now is where do we get this extra money. Well, I already mentioned taking at least some of it from the Pentagon, which has a budget of 699 Billion dollars, as of 2007. Now, we don't have to take all of it, a 2/3rds cut in the budget seems reasonable, I think they can deal with having fewer V-22 Ospreys, don't you think?

So that equals an additional 466 Billion dollars in the single payer system, add that to the current budget of 670.9 billion dollars and you get 1,136.9. Oh shit, we are short some money, the Health budget doesn't balance, a deficit, in this program, of about 175.7 Billion dollars. OK, so let's say we raise taxes to make up the difference, that would equal about 585.67 dollars that each person in the country will have to pay a year. Let's double that, to account for children and unemployed, to 1,171.33 dollars that each working person will have to pay a year. This is assuming a "flat tax" on FICA, which doesn't necessarily be the case. So, let's break it down by Month, divide by 12 and you get 97.61 dollars.

This sounds expensive, until you realize that the average payment of premiums in 2006 was 11,500 dollars for a family of four, or 4,200 dollars for an individual annually. This means that insurance premiums cost individuals an average of 350 dollars a month, more than 3 times more than a public system. Please bear in mind that the Medicare and Medicaid that people already pay will be replaced by this new tax system of a little less than 100 dollars a month. In addition, since this system is a replacement of private insurance, that means individuals will save over 200 dollars a month in premiums. This can increase spending by said people, either for luxuries, or for needs, but in either case, it would be enough money saved to help the economy overall.

The figures for the above paragraph come from the first link in this post, and the figures for the budget come from Wikipedia. One other thing to bear in mind is that the total cost for the single payer system could be less than I calculated here, as I said, preventative care, and negotiation for services can both reduce costs, possibly by a lot. So call it a "worse case" scenario, where we still couldn't be quite as cheap as Canada, but got close. The big question mark is, would we be willing to sacrifice all the pork in the Defense budget to help fund this system? That's the only thing I haven't figured out yet. But considering that we will still outspend pretty much everyone else in the world in military spending, I don't think reducing the budget by this amount would risk our National Security.

In fact, we could further reduce the Pentagon budget to help pay for Port Security, Airline safety and Security, and to increase disaster relief funding, which always needs more money, and better administration! All of these would further increase our National Security without huge, over budgeted, boondoggles that the Pentagon loves. Hell, increase pay for the troops, and get rid of the VA medical funding, our Vets would be treated like all other citizens, and since the MAJORITY of folks will be in a single-payer system, they will be the check on government waste and neglect.