From “America’s Bitter Pill, Money politics, backroom deals, and the fight to fix our broken healthcare system” by Steven Brill.
“The Medical Loss Ratio (MLR) is the ratio of claims insurers pay ou to hospitals, doctors, and other providers of medical care compared to the premiums they received from customers who buy their insurance. An insurance company that takes in $100 million in premiums and pays out $80 million to cover medical bills would have an MLR of 80 percent.
‘In fact, 75 5o 80 percent was typical MLR, which meant that 20 to 25 percent in cost to oversee claims and otherwise manage the company was par for the course – despite the fact that administrative costs to pay for health care in other countries were typically closer to 5 percent 9meaning a 95 percent MLR) and Medicare’s administrative costs were les than 1 percent.”
Far better than the Affordable Care Act would have been ‘Medicare for Everyone.’ It simply stepped on too many toes.
According to Brill, President Obama decided to make health care reform the main challenge of his first administration because he realized there would never be able to advance the economy so long as so much money was being wasted on a dysfunctional health care system.
Consider the math: Currently 18% of Gross National Product goes to health care and the USA is ranked far down the list (usually around 13th and near Cuba) for the general quality of its health care. Even a 10% saving would reduce the 18% of GNP to between 14% and 15%, bringing it closer to the 9% to 11% of GNP that other advanced nations ranking far ahead for quality.
A switch to a single provider such a Medicare would likely have brought the figure down to 13%. A freed up 3% of GNP would enable vast investments in infrastructure and other desirable expenditures. (Tax cuts would be a possibility, but we think the funds could be used for better purposes.)
What is seldom recognized is that the government already is the single source funder for 52% of health care through various programs such as Veterans, Medicare and Medicaid.
