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Comment by dragonwriter | Hacker News Reader

> US spent $3.65T on healthcare in 2018. or 3650 Billion.

> Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance.

Profit is not the main source of the expense imposed by private health insurance, administrative costs are; Administrative costs are estimated at around $1.1 trillion nearly a third of the total, much of which, particularly billing and insurance-related (BIR) costs which account for about half of admin costs, would be eliminated in a single-payer or even public option systems, since the BIR costs imposed in current US public programs are far lower than private insurance (and some of those are still due to interaction with private insurance—e.g., coordination of benefits—and so would be erased even for public programs in a single-payer system.)

https://www.americanprogress.org/issues/healthcare/reports/2...

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>since the BIR costs imposed in current US public programs are far lower than private insurance

Which is why I included this piece.

>If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil.

>So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend.

Last year insurance spent $92 Bil on admin. Even if we 'save it by half' (comparing the 56 bil from your link) our best case savings of 106 bil drops to 60 bil. Or a reduction of 1.6% in healthcare spending or ~$160 per person.

And hospitals will still have admin as they still have to bill the government.

The administrative cost imposed by private insurance on administration is not the cost spent by private insurance on administration. The biggest share of it is the administrative cost imposed on providers for dealing with private insurance (there is also a cost, in terms of coordination of benefits, imposed on public insurers). Your analysis, unlike the source I cited, entirely ignores administrative costs imposed by the private insurance system on actors other than the private insurers themselves, which misses the bulk of the costs associated with the private insurance system we have.

> And hospitals will still have admin as they still have to bill the government.

Missed responding to this piece before, but, sure: but, from the source I cited upthread, BIR costs imposed in the US big public programs (Medicare/Medicaid) is 2-5% of total cost, in the US private insurance system, it's 17% of cost. With single-payer admin will be nonzero, but it also won't be nearly 1/3 of total health expenditures, nearly half of which is related to billing and insurance.

From your link:

>NAM report concluded that BIR costs totaled $361 billion in 2009—about $466 billion in current dollars

>12.3 percent of spending on private insurance; and 3.5 percent of public program spending, including Medicare and Medicaid

So a difference of 8.8%. A savings of 41 Billion. So we'll add it to the 106 bil for removing insurance. And we're at 147 Billion. Or 4% total.

Even if we use the other estimate they mention. You're still looking at less than a 6% savings.

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