The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

Medical Care:
Deformed by Profits and Bureaucracy

Jan 18, 2010

Why does medical insurance cost so much more in this country, while providing so much less coverage than state-run systems in other countries?

Of course, profit and CEO salaries take a sizeable chunk of money right off the top.

But the much bigger drain on the U.S. medical system is administrative cost–the complicated result of an industry where companies compete with each other to make profit.

Today, there are 13,000 different private insurance companies in the country–almost twice as many as the number of hospitals!

Each of these insurance companies has its own billing system; its own system for checking patient eligibility and verifying a doctor’s claims; its own system for paying doctors; its own sales and advertising departments to attract clients. Duplication on top of duplication! This army of private insurers gobbles up nearly 12% in administrative costs.

Outrageous when compared to Canada, where administration of the single government-run insurance system absorbs just over one% of insurance costs.

Hospitals have their own administrative costs; so do doctors’ offices, laboratories, temp agencies for nurses, etc. When all these administrative costs–insurance, doctors, hospitals, etc.–are added together, they come to about 31% of the insurance premiums.

That’s outright waste–a vast amount of money that could be used to provide medical care to every single person in this country, better medical care than we have now.

But the so-called reform coming out of the U.S. Congress does nothing to control this waste–it just opens the public purse to the same privately owned companies that created this bloated system.