1. In Japan they have mandatory health insurance and a government run retirement savings plan.
2. These expenses are taken off of the employers and distributed across the taxpayers.
3. In Canada, where the Big Three now assemble most of their cars, they have single payer, universal health insurance.
And, not withstanding what derogators of Canadian Health Care say - most of the savings come from eliminating fraud, waste, abuse, defensive medicine, bureaucracy, 1-800 call centers, etc. - and not the oft mentioned rationing.
ABSTRACT
Background A decade ago, the administrative costs of health care in the United States greatly exceeded those in Canada. We investigated whether the ascendancy of computerization, managed care, and the adoption of more businesslike approaches to health care have decreased administrative costs.
Methods For the United States and Canada, we calculated the administrative costs of health insurers, employers' health benefit programs, hospitals, practitioners' offices, nursing homes, and home care agencies in 1999. We analyzed published data, surveys of physicians, employment data, and detailed cost reports filed by hospitals, nursing homes, and home care agencies. In calculating the administrative share of health care spending, we excluded retail pharmacy sales and a few other categories for which data on administrative costs were unavailable. We used census surveys to explore trends over time in administrative employment in health care settings. Costs are reported in U.S. dollars.
Results In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada.
Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations' figures exclude insurance-industry personnel.)
Conclusions The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system.
Correction:
To the Editor: There is little doubt that per capita health care administrative costs are lower in Canada than in the United States, as Woolhandler et al. report (Aug. 21 issue),1 even though the precise magnitude of the gap is open to debate, a point that Aaron makes in his accompanying editorial.2 However, the Canadian single-payer system results in chronic shortages of medical services because of underfunding. The underfunding problem is usually considered to be a separate issue from the single-payer system itself,2 but the very structure of the single-payer system may cause the problem.
In the United States, persons who wish to spend more on health care than the norm have a simple way of doing so: they can purchase premium private medical insurance. Notwithstanding the Medicare prescription-drug plans currently being discussed, it is generally not an option in the United States to increase medical expenditures through the taxation system, given contemporary political and fiscal constraints. In Canada, however, increases in medical expenditures are possible largely only through the taxation system. And even if, as some surveys suggest, most Canadians are willing to spend more on health care,3 taxpayers cannot be sure that any given tax increase will actually go to health care expenditures. Therefore, Canadian taxpayers generally resist tax increases, and underfunding and chronic shortages result.
Jasjeet S. Sekhon, Ph.D.
Harvard University
Cambridge, MA 02138
4. Will is a GM shill. I remember when the Prius first came out, Georgie said that hybrids would actually
increase gasoline consumption.
*Based it on studies by Carnegie Mellon's GM Professor of Economics lester Lave and Penn States ExxonMobile Professor of Energy Economics Andy Kliet.
*They published a bunch of papers based on condidential GM marketing stuies predicted that as gas mileage improved, people would drive so much more that they would actually use more gasoline.
*Georgie printed this.