This will help how? There are few economies of scale to be gained by going national [1], and single-payer gives consumers no incentive to consume less.
[1] You save a bit of money by having the IRS collect payments, but the billing department is not a major component of healthcare costs.
It seems to be working rather well in a large number of other first-world countries (I'm speaking from experience - I'm British, and my wife is half-French and grew up in France. Now we live in the US where we enjoy just about everything except for the healthcare system).
"single-payer gives consumers no incentive to consume less"
Having been fortunate enough to live in a country with a single-payer system, I never saw the kind of over-consumption you're hinting at.
I live in Canada, and have to laugh at free market fundamentalists who claim that single payer monopsonies encourage over-consumption. When it's pointed out that Canadians actually see doctors less frequently than Americans, they turn around and conclude that Canadians can't get access to doctors.
Mouth-breathing teabagger reasoning: It's soshullism, therefore it must suck. Also, Canada's cold and Europe can't decide on a common language, so no point taking those people seriously.
I also find it odd that these people can focus on the comparably miniscule problem with the Canadian and British systems, while completely ignoring the glaring faults of ours.
I didn't say it couldn't work. I said that there are minimal (if any) benefits to a national health care system, as opposed to city, state or private systems. The economies of scale just aren't there.
As for overconsumption, the RAND experiment (as well as plenty of other statistical studies) shows that consumers will consume up to 40% more health care than they need if it is free (but not if they must pay out of pocket for it). Most likely your country either prevents this via other rationing mechanisms (which are politically infeasible in the US) or else you observed it but were unaware of it.
I have seen numbers anywhere between 15 to 30% as the overhead / billing cost of healthcare in the USA. It depends on what you call overhead, but pre approval for a procedure is not free. Neither is 3 or 4 letters back and forth between the healthcare provider and the insurance company.
PS: Many small doctors’ offices have 1/3 of their staff devoted to dealing with insurance and billing issues.
A pre-approval may cost $10-20. An unnecessary procedure may cost $1000. If you cut admin costs by $100 at the expense of $1000 in unnecessary procedures, you will lower the percentage of overhead quite nicely. You will also be wasting $900.
Is there any reason to believe the (highly competitive) health insurance market is far from the optimum overhead/healthcare ratio? If you know better, why don't you build a startup to exploit this and get rich?
Insurance companies don't directly pay for the total costs of pre-approval so they optimize to minimize personal costs independent from the total cost to the system.
In other words doctor's offices don't bill them for the time a sectary spends filling out their forms. Which means doctors include that overhead cost as part of the cost of procedures. Also while each insurance company's internal system is streamlined each doctor's office needs to deal with several companies’ which increases their overhead costs even more.
PS: A doctor making 200k/year spending 5 minutes on a pre aproval cost's someone more than 10$. The patent needs to show up which costs them even more money etc.
How large is the cost of a secretary filling out a form compared to an MRI? You are talking about adding a few dollars to the cost of an a procedure priced at $400 or more (I don't need preapproval below $400).
A doctor only needs to get involved in the case that a preapproval is not granted, i.e. when the procedure appears unnecessary.
It costs the fully loaded headcount cost of all admin staff at the doctor's office divided by the number of transactions the office undertakes in a year. It's still probably not that high, but it's not as simple as saying "filling out a form only costs $1.20 in billable time".
FYI, the actual cost of the average MRI is ~200$. Everything else is just padding.
Let's take an example of how these low costs work. In Denver, where I live, if you get an MRI of your neck region it's $1,200, and the doctor we visited in Japan says he gets $98 for an MRI. So how do you do that?
Anyway, the idea it's just one person filling out a form is a mistake. It requires time from the patent, a doctor, the doctors admin staff, and the insurance company's staff.
Uh, isn't this --- respectfully --- ass backwards? The benefit of going national is that you greatly expand the risk pool. All I know about insurance I got from listening to Robert Schiller's financial markets class on iTunes, but, I'm pretty sure that's how insurance is supposed to work.
Work out the numbers and you'll see why it isn't. The variance in health care payouts over a pool of N people is proportional to sqrt(N), whereas the mean is proportional to N (see the central limit theorem).
For a family of N=1 to N=4, sqrt(N) is of the same order of magnitude as N. This is bad, since you can't reasonably predict how much you need to pay. This is why insurance makes sense for me (N=1) or a family of N=4.
Once N=10,000, sqrt(N) = 100, so the variance is only 1/100 of the mean. At N=100,000, it's only 3/1000 of the mean. Every factor of 10 increase in the insured pool lowers the standard deviation by a factor of 0.316=1/sqrt(10).
But you've ignored adverse selection. Many of the people commenting here have no insurance coverage, because they're 22 and it is irrational for them to pay for coverage they're not mandated to have.
I see that if people were i.i.d., the difference between BCBS's risk pool and Medicare's risk pool would be irrelevant. But they aren't.
Lumping in seniors with 22 year olds does not reduce the variance any more than lumping in 22 year olds with more 22 year olds does.
Statistical variance is not a major contributor to the cost of health insurance. You are simply wrong on this point.
Additionally, adverse selection has nothing to do with a variable risk pool. Adverse selection is a problem caused by asymmetrical information: if you know you are sick, you might lie to your insurance company about preexisting conditions to gain insurance. Adverse selection also has nothing to do with a variable risk pool.
You sure are better with math than I am. But you're not helping me understand how, given the fact that the majority of the uninsured in the US are below the age of 35, and the fact that people under the age of 35 have less reason to pay into the system than people over 35, and the fact that people under the age of 35 are similarly much less likely to incur costs, mandated guaranteed issue or government single-payer doesn't improve the risk pool.
You've clearly demonstrated that the problem with the current insurance scheme isn't a trivial stats 101 observation, but I feel like you're dodging the point because I've given you an excuse to do so by making that point clumsily.
I'm not sure what point you were making. You originally suggested that there were economies of scale due to the reduced variance of a national risk pool, which is true but so minor as to be irrelevant.
Regarding the lower average cost of people under 35, this is true. However, this is not an economy of scale - the cost to insure 1 million people aged 20-35 is very close to 100 times the cost to insure 10,000 people aged 20-35. No economy of scale there.
Adding cheaper people to the market will lower the average cost of the broader health insurance market. Millions of new netbook buyers lower the cost of laptops, since the average price of 1 million netbooks and 1 million macbooks is lower than the average price of 1 million macbooks. This isn't an economy of scale, it's simply a change in market composition. A change in market composition (in vacuo) doesn't lower costs to any individual. Millions of new netbook buyers didn't make my macbook cost any less.
It will also raise prices in any individual market segment due to increased demand: if demand for netbooks/health insurance for 20-35 year olds goes up, prices will too.
[1] You save a bit of money by having the IRS collect payments, but the billing department is not a major component of healthcare costs.