Yesterday’s Investor’s Business Daily featured an article by Benjamin Zycher – senior fellow at the Manhattan Institute for Policy Research – challenging the mantra repeated by socialized medicine cheerleaders that a "single-payer system" (i.e. the gov’t) will reduce those pesky administrative costs currently being paid by private insurance companies.The argument is based on these findings (not surprisingly from a government report): "the net (administrative) cost of private health insurance plans is about 11% to 14% of total premiums paid, while direct administrative costs reported in the Medicare budget are about 3% of Medicare outlays."
Closer scrutiny, as one might suspect, contrasts these figures:
"Medicare receives (administrative) services not shown in its budget from other parts of the federal government."
Hmmm, interesting. So the government report distorts the administrative costs of a government program. Then there’s this finding:
"Based upon the academic literature, a barely plausible lowest estimate … raises the true (administrative) cost of delivering Medicare benefits to about 24% to 25% of (tax-financed) Medicare outlays, about double the net cost of private health insurance."
Nevermind the fact that private insurance company administrative costs are inflated in no small part due to heavy government regulation. Zycher continues:
"The purported single-payer "savings" in administrative costs are illusory, and cannot be separated from the larger adverse effects inevitable in a system in which government policy is driven by interest groups rather than patients."
Zycher delivers this much-needed dose of reality to those clinging to an idealogical faith based on unlimited resources:
"In a world in which resources are limited always and everywhere, single-payer "coverage" cannot guarantee health care, and "universal coverage" is a mirage."