Almost everyone agrees we need a universal plan, but most plans discussed now that require everyone to purchase insurance, often-stripped-down plans from for-profit insurance companies, will produce more waste and more inefficiency. My fiscal-conservative principles revolt against such plans.
The waste is undeniable. Under our current for-profit system, about one-third of every health-care dollar goes for something other than our health care.
Private-insurance companies take the first 15 to 25 percent. They take it for profits and overhead. Private insurance is indeed profitable, nearly $10 billion in 2006 for the top seven insurers, and those companies pay their chief-executive officers hefty salaries to keep those profits high. In 2005, United Health Group's CEO was the third highest-paid CEO in the country, enough to cover health-care costs for 34,000 people.
In addition to the CEO, they employ thousands of people. Hiring employees doesn't sound wasteful until we look at a comparison. In Massachusetts, which recently adopted a plan mandating everyone purchase insurance, Blue Cross has more employees for its 2.5 million customers than Canada, under a single-payer system, has for its 30 million citizens. Private insurance needs legions of workers to deny us our benefits or to reject us a customer.
The companies even buy computer software to help in that effort, software that can help dig through past claims or look for reasons to deny payment. Sales of such software grew to $7.5 billion last year, money that didn't go to our health care.
Of course, the companies use our premium dollars for advertising and lobbying also in order to increase and protect their business.
If we take the profit out of health-care insurance, we obviously decrease the waste. Medicare, which is a single-payer system, has an overhead of 3 to 4 percent as compared to the 15 to 25 percent for private insurance. A single-payer system eliminates exorbitant CEO salaries, an overstaffed bureaucracy, advertising, lobbying, and, need I say, profit.
The waste doesn't stop with the skimming off the companies do. The health-insurance industry causes a nightmare for hospitals and physicians, a nightmare that costs another 12 percent of our insurance premiums. To deal with the paperwork, they have to hire more clerical workers than nurses. The physicians end up in disputes with the insurance companies, causing them time and more money. Single-payer eliminates that absurdity because providers will send their claims to one place to get paid, the National Health Insurance Program, instead of thousands of different companies.
As a fiscal conservative, I say we must end the waste. House Resolution 676, or Improved Medicare for All, calls for a single-payer system that will provide us a choice of providers with no premiums and no deductibles and more coverage than a majority of us have now. Such a system could put decision-making back into the hands of doctors and patients instead of private insurance bureaucrats while, at the same time, eliminating the waste.