Podcast 59: Comparing Administrative Costs Between Single Payer Systems and Private Insurance Markets

September 4, 2019

In this episode, Suzanne Spradley and Chase Cannon examine one argument that is put forth by proponents of a single payer system — that because Medicare is purportedly more administratively efficient, that a single payer system in the U.S. would reap huge savings and reduce overall health care costs. Suzanne breaks down the estimated administrative costs of Medicare (claimed 2% of total costs) versus private insurance (claimed 12% to 15% of total costs), and the reports upon which they’re based. Suzanne explores whether comparing administrative costs versus total costs is the best method, and how a per-beneficiary comparison might be more meaningful. Suzanne and Chase discuss some of the costs that shouldn’t be included in an administrative costs comparison, including profits and taxes. The two wrap the episode with a discussion on how some administrative costs actually reap huge benefits, and why administrative costs may not impact overall health care costs — ultimately concluding that the current comparison and claims on single payer administrative cost savings may not be all they’re cracked up to be.

Every other week, NFP's legal experts make the subject of compliance personal for a wide audience. By breaking down the daunting details of emerging policies and bridging the gap between legislation and what it means for the listener, Chase Cannon and Suzanne Spradley make compliance issues relatable and relevant. Visit our Soundcloud page every two weeks for the most up-to-date episode.

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