Sunday, August 2, 2009

Single-payer Reduces Waste Dramatically

By Jeremy B. Stern
July 07, 2009

I am an orthopedic surgeon who has been practicing in this community over the past 16 years and may be familiar to many of your readers. As our Congress debates the future of our health-care system, I am writing to urge my fellow citizens to get involved in the process. The debate in Congress is being framed largely by the insurance companies. This is problematic because of the large sums of money donated by the insurance lobby to the same senators who are crafting the reform.

What is not being considered fairly is H.R. 676, a single-payer health-care system.

In the U.S. today we spend approximately two times as much as other industrialized nations, over $7,000 per person per year, yet have nearly 50 million uninsured residents. What causes this waste of health-care dollars? We are the only industrialized nation that does not have a single-payer system. Instead our system is based on privately owned for-profit insurance companies.

In the average private health insurance company, one-third of the money paid in premiums is used for "administrative costs." That means that one-third of all the money you and I now pay for our insurance is used to pay for things like salaries, marketing, overhead and, of course, profits and bonuses. Not to provide health care.

In addition, hospitals, nursing homes and physicians need to employ large staffs just to negotiate the maze of rules and regulations from multiple insurance companies. By eliminating these multiple insurance companies, the cost savings to the system would be more than a staggering $350 billion each year.

Many people are scared to have a single-payer system run by the federal government for two main reasons. First, there is a general impression that the government is inefficient and will be unable to manage the system well, and second, people fear that the government would limit their choice of providers. Most people don't realize that the government plan we all know best, Medicare, runs at about 3 percent overhead while most HMOs run 15 to 20 percent overhead, and the Canadian system has 1 percent overhead. The government, then, is more efficient than the private sector.

As to the second fear, lack of choice, in the single-payer plan being talked about for the United States, the majority of the health-care system would run just as it does today. That means that most people would have greater choice of providers because they would no longer have an HMO telling them who they could see. Unlike the VA or Army system where the doctors and hospitals are run directly by the government, in a single-payer system here in the United States there would be no change in the providers; only the payers would change.

What would happen is that we and our employers would all pay taxes instead of premiums. These taxes would amount to a fraction of what we used to pay in insurance premiums. For those taxes we would have insurance that would pay for literally all of our health needs, from glasses to dental care to medical and surgical care.

The large cost savings of a single-payer system would come in various ways. By buying in bulk and demanding volume discounts, the single-payer plan would greatly decrease the cost of medication. The VA system in the United States gets a 40 percent reduction in medicine costs over what we all pay. A single-payer system would also greatly increase the country's access to preventative care. This in turn would reduce the inappropriate overuse of highly costly emergency rooms. Having diseases diagnosed earlier and treated appropriately vastly decreases the overall cost of treatment of that disease. For example, by treating high cholesterol early with medicine, you may well eliminate the need for a very costly coronary artery bypass later in life.

While doctors and hospitals would be paid somewhat less, their costs of doing business would be drastically reduced since there would be a very low cost to billing and administration, and providers would get paid more quickly and reliably.

Lastly, but perhaps most importantly, there would be improvements to our actual patient care with a single-payer system. Having only one payer would allow us to use a unified computer system. With this single computer system, whenever you went for health care of any kind, the health-care provider would have all the information needed to treat you safely, such as the medications you take and the allergies you have. There would be fewer medical errors and a greater awareness of interrelated medical problems.

I strongly encourage you all to call, write, text or otherwise contact your congressmen and senators, and encourage them to strongly consider H.R. 676, the single-payer system that will fundamentally eliminate a huge waste of health-care dollars and restore our health-care system.

Dr. Jeremy B. Stern is an orthopedic surgeon. He lives in Marion, Mass.

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