By Ellen Oxfeld, VT for Single Payer Supporter, Middlebury
In a recent legislative hearing at the state capital, representatives of Blue Cross and Blue Shield of Vermont said that their administrative costs were less than 10 percent of every dollar spent on health care. So, why do single payer advocates say that our present health care administration consumes 30 cents of every health care dollar? It’s because it is not just the administrative costs of any one insurer that we are counting here, but the administrative costs of the entire system. Also, every system has both provider administrative costs and payer administrative costs, and our current system is very expensive because we have multiple payers.
Why are multiple payers such a problem? The problem is that the multiple payers have different rules, regulations and reimbursement rates, and even one payer in our system often has multiple plans, so everyone has different insurance.
All of this is akin to customers going into a store and each one paying a different price for a gallon of milk as well as each one using different currency. How many people would you need behind the counter to manage this? It would obviously be a lot easier if everyone used the same currency and paid the same price for that gallon of milk.
Similarly, the most cost efficient health care system is a single payer system with universal coverage, uniform benefits and one set of rules regulations and reimbursements. Indeed, this kind of system would cut our administrative costs in half.
Finally, we should also remember that Blue Cross and other payers are self reporting their administrative costs. So, their numbers also depend upon what they classify as administration.