Thursday, July 19, 2007

The worst healthcare money can buy

Here, via the Wall Street Journal (subs. req'd), is the essence of why the American healthcare system is so bad relative to all the money spent on it. One of the biggest health insurance companies announced their financial results today --

UnitedHealth's medical-loss ratio, or the percentage of premium revenue used to pay patient bills, was 80.5%, a decrease of 1.1 percentage points, year-to-year, and 2.2 percentage points sequentially.

80 percent of premiums go on healthcare bills. The other 20 percent goes where? Not on hospital administration -- that's in the patient bill. But on payment and eligibility administration i.e. the insurance company's own costs for all the staff and bureaucracy that it has. With no insurance companies and the government just paying for everyone, all those administrative costs would be gone. Make everyone eligible. Pay for everyone. Collect taxes or levies from everyone to do it. 20 percent cheaper than what's being done now.

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