This is assuming Medicare would have the same cost structure if it insured everyone that it does right now, which is incorrect because Medicare is currently being subsidized by private insurance.
In order to make healthcare in the US cost less, something that is currently being paid for has got to go away. That isn't primarily "insurance company profits" or anything like that. The profits are a single digit percentage of the premiums.
The costs come from things like the extraordinarily high cost of getting FDA approvals reducing competition between pharma companies, doctors choosing unnecessary tests for liability reasons and patients preferring them when someone else is paying for them and things of that nature. It is not clear how Medicare would change any of that, given that it currently doesn't solve them even for existing Medicare patients, it just pays below its share of the fixed costs and lets private insurance pick up the difference.
You have to actually get the costs down. In theory you could just declare by fiat that you aren't going to pay as much, which would cause something to be cut, but not the inefficiencies that the law continues to require. A "solution" that causes good things to be cut so that existing wasteful things will still fit into the budget is not very good.
No, it's assuming that the successful outcomes and cost-benefits of single-payer, as proven throughout the world, can also be applied to the US.
In case anyone wants to read why prices actually are high: https://en.wikipedia.org/wiki/Health_care_prices_in_the_Unit...
To be fair, drug prices are high (possibly and in small-part) due to the FDA. Implying the FDA is entirely responsible or even largely responsible for the overall cost of healthcare in the US is ridiculous.
For example, if they have lower salaries for some things, the US would have to cut them to match what they do. The savings doesn't happen automatically.
This is some super back of the napkin stuff. I'm just looking at each aspect of the healthcare industry and estimating how much inefficiency (profit) there is to eliminate by looking at the margins of the largest player in that industry.
Anthem financials: https://finance.yahoo.com/quote/antm/financials/ - $20B profit on $92B revenue. Assuming this is roughly the same as other insurance providers in the $967B industry, there's ~$200B in savings.
Pfizer financials: https://finance.yahoo.com/quote/PFE/financials/ - $42B profit on $53B revenue. The pharmaceutical industry in the US is $935B so there's another ~$750B in savings. We're at $950B now.
HCA healthcare (largest hospital system in the US): https://finance.yahoo.com/quote/HCA/financials/ - $18B profit on $47B revenue. Hospitals are also at ~$1T, so there's another $380B in savings.
So there's $1.2T in savings. There are surely other parts of the US healthcare industry I'm missing but there's also a lot to be saved by vertically integrating everything.
Anthem is an HMO, not "just" an insurance company. They tend to make higher margins specifically because they're more cost efficient and correspondingly have more profit, so extrapolating from that is somewhat misleading.
But even using your numbers, $200B is not "the problem" here -- that's around 5% of the money being spent, and because of the nature of insurance tends to scale down with other costs and remain at the same percentage of the then lower absolute costs when other costs are reduced.
> Pfizer financials: https://finance.yahoo.com/quote/PFE/financials/ - $42B profit on $53B revenue. The pharmaceutical industry in the US is $935B so there's another ~$750B in savings. We're at $950B now.
People still want Lipitor and Zoloft, so that's all still there unless you regulate drug prices, which you can do or not independent of single payer (but that has its own problems).
And you can't just write off all profits as "we don't need that let's get rid of it" -- it's just measuring risk adjusted reward on capital. To have a hospital you have to put down millions of dollars to buy MRI machines and everything else, which then gets paid back with interest over a period of years. If it's private that comes from the investors and then the "profit" is their interest on the investment. Making the hospital "public" doesn't deprive you of the need to raise money to pay for equipment and then pay interest on it, unless you're going to pay 100% of the costs up front out of taxes in year zero -- and deprive the taxpayers of the interest they would have collected on the same money in the meantime.
TANSTAAFL.
How much unnecessary work happens around crazy billing systems and arguing over who pays what? Those people all draw salaries.
These people will not just stay silent when they become unemployed because practitioners can't afford to keep them. You need retraining programs (in what? Beats me ...), fund unemployment insurance ...
The point is that things don't happen in a vacuum.
You missed the biggest one: massively overcompensated specialty physicians. We can expect price controls to reduce that. And since there is currently a massive surplus of qualified applicants to medical schools, we shouldn't expect shortages either.
The problem it caused is that there is correspondingly less drug R&D and more people die world-wide because they're not paying their share of the research costs.
Is that actually true? I always hear that line but nobody every backs it up with data. If Medicare is losing money for hospitals why do they still take it?
Fixed costs vs. variable costs. It costs a million dollars to have a hospital, then there is a further $250 marginal cost to treat another patient. If there are 2000 patients then the average patient has to be charged $750 ($250 + $1M/2000) to cover costs. If Medicare says $500 or GFTO then $500 is more than $250 and they "make" $250 by accepting Medicare, but if they received that much from the average patient they wouldn't cover their costs.
> If Medicare is losing money for hospitals why do they still take it?
Many have stopped. The ones that do presumably are getting paid above marginal cost, but that doesn't mean they're getting paid above average total cost.
In 2015, $58.7 billion in Medicaid and Medicare reimbursement shortfalls and high uncompensated care costs affected hospital revenue cycles, the AHA found.
[1]https://revcycleintelligence.com/news/medicaid-medicare-reim...
Did you mean "supplemented"?
Then there is the issue of too much inefficiency within existing insurance programs. American consumers are not getting a good value for the healthcare dollars that they do spend.
Lastly, I would say that the American education system is too expensive and too inefficient at training new medical staff.
It's 63% higher than China and ~double France's & the UK's. Russia's is actually 38% higher than ours (not that Russia is a model country for anything): https://data.worldbank.org/indicator/ms.mil.xpnd.gd.zs
Maybe if we could stop starting wars constantly, we could lower our military spending. But it doesn't look like that's the direction the voting population is moving toward.
Military spending is probably wasteful... until it's not. Those who have no military can still die by (someone else's) military. Having a military can be wasteful, but not having one can be very expensive.
> Lastly, I would say that the American education system is too expensive and too inefficient at training new medical staff.
Probably. But you could have stopped after "inefficient", and I would still have agreed. In fact, my impression (from a distance, I admit) is that medical education is more efficient than the rest of the educational system. (I agree that the expense is insane.)
The US cannot default on its debt payments that would be catastrophic to the US economy and to the world.
(Source for the salaries: https://www.thebalancecareers.com/average-salary-information...
$28,000 for no high school degree -> people with BS gets this kind of salary in Europe. $37,000 for high school degree -> people with MS gets this kind of salary in Europe. Same logic for the other salaries on this chart.)
[0]https://randomcriticalanalysis.com/2018/11/19/why-everything...
