I was not suprised when doctors, pharmaceutical companies, hospitals, insurers and medical-device manufacturers proposed saving the US health care industry $2 Trillion savings.

The US health care industry proposes to reduce health care spend and slow premium increases over the next 10 years to provide $2 trillion in savings. That will be easy. Check out the following analysis for yourself.

2009 US Health Care Spend

Total 2009 US health care annual spend is widely accepted to be US $2.5 trillion.

US Private Health Insurance Industry Demographics

Today, 1200 US private health insurance companies make up the US private health insurance industry that insures 60% of the US population, or 180 million Americans.

Under the Federal Employee Health Benefit Program, over 40% or 75 million of the 180 million Americans already receive taxed financed private health insurance plans through the US government Office of Personnel Management.

The US government Office of Personnel Management contracts with private health insurance plans throughout the country.

Although the US government pays up to 75% of US government employee and retiree premiums, the private health insurance industry ultimately negotiates the traditional insurance plans or locally available HMOs while administering costs and income. It is highly unregulated and suspect to fraud and over charging.

US Private Health Insurance Industry Economics

At an estimate of $10,000 per person per year, 180 million Americans covered by private health insurance amounts to roughly $1.8 trillion annually.

At $1.8 trillion annually, the private health insurance industry administers 70% of the total $2.5 trillion US health care annual spend.

Whether for profit or non profit, today’s private health insurance industry is quite lucrative. In fact, of the $1.8 trillion private health insurance industry, 31% goes directly to private health insurance industry administrative costs and income.

So, for every US health care dollar spent by privately insured Americans, an average of 31 cents goes to the US private health insurers’ administration and income, or approximately $580 billion annually.

If the private health insurance industry continues to administer 70% of the $1.8 trillion annual US health care industry at over the next 10 years the total private health insurance industry would be $18 trillion assuming no growth or reduction in the private US health insurance and health care industries over the next decade.

Also, if the private health industry continues a 31% administrative costs and income at $580 billion annually over the next 10 years, the health insurance industry would receive $5.8 trillion for administrative costs and income, once again, assuming no growth or reduction in the US private health insurance and health care industries over the next decade.

US Private Health Insurance Industry Projected Growth

However, the US health care industry is estimated to grow as much as 60% or to a total of $40 trillion over the next 10 years.

If the private health insurance industry continues to administer 70% of the total US health care annual spend over the next 10 years, the total private health insurance industry would be $24 trillion.

And, if the private health insurance industry maintains a 31% overhead over the next 10 years, a total of over $7.7 trillion would go directly to private health insurance industry operational costs and income.

Over the next decade, the private health insurance industry could potentially see a $24 trillion industry that includes $7.7 trillion operational costs and income.

Does it really cost $7.7 trillion to write policies and process health care bills?

With a potential total industry of nearly $24 trillion over the next decade, I am not surprised that the private health insurance industry proposed $2 trillion in reduced spending and slower premium increases. That’s less than 10% in an industry that is projected to grow 60%.

US Private Health Insurance Industry Overhead

How does the private health insurance industry realize a 31% overhead today?

The 180 million Americans with private health insurance are statistically healthier, wealthier, and have less costly medical conditions (e.g. not terminally ill like a larger segment of those on Medicare, etc.).

The private health insurance industry realizes 31% overhead for administrative costs and income by taking advantage of advances in information technology, automating business processes, and setting policies to deny coverage and insure the young, healthy, and wealthy.

US Medicare and Medicaid/SCHIP Demographics, Economics, and Overhead

How does private health insurance industry compare to Medicare and Medicaid/SCHIP?

Medicare covers 45 million seniors or 15 percent of the US population.

At an estimate of $10,000 per person per year, that amounts to $450 billion annually (including unfortunately $60 billion in fraud annually), with an overhead of only 3% or $13.5 billion annually due to no income requirement or excessive administrative costs and salaries.

Medicare has some excesses and inefficiencies. Also, seniors are statistically an unhealthier segment of the US population, while many require more expensive long term health care, especially the terminally ill. The fact that this segment of the US population is growing the fastest will make matters even more complicated in the very near future.

Medicaid/SCHIP costs are $300 billion annually (also including unfortunately $40 billion in fraud annually) for 30 million children, families, and seniors who are 65 or older, blind or disabled and have limited income, or roughly 10 percent of the US population.
At an estimate of $10,000 per person per year, that amounts to roughly $300 billion annually, with an overhead of only 3% or $9 billion annually due to no income requirement or excessive administrative costs and salaries.

Medicaid/SCHIP also has some excesses and inefficiencies. Additionally, low income groups are statistically unhealthier and less literate, and administering health care coverage and treatment can be more challenging. Regrettably, this segment of the US population is also growing.

Speaking of excesses, let’s examine ex Wellpoint CEO Larry Glasscock. He holds the record for monies paid as a private health insurance company CEO to the tune of over $5 million annually. Larry also sold all his Wellpoint stock over the past year or two for another $25 million dollars.

Additional excesses include massive advertising revenue and campaign finance from the private medical insurance, AMA, AHIP, Pharma and others ensure amazing support from news media and elected politicians.

The AMA’s history of health industry social engineering goes back to the 1960′s when they hired Ronald Reagan to produce an LP record that promoted the dangers of national health care and how it would lead to communism in the US. Nice scare tactic.

Please use this to rally the people of this coutnry, so we can take it back.

Paul Revere
Citizen At Large

Satellite Beach, FL

Read about it here: http://www.nytimes.com/2009/05/15/health/policy/15health.html?_r=2&partner=rssnyt&emc=rss

It’s what we’ve known all along: we can’t trust the insurance industry with health care reform.

Only a single-payer approach to healthcare reform will end the inhumanity of our failed healthcare insurance system, where profits are more important than patients’ health, and where people die because of it.
Our fight for equal access to healthcare for all is about democracy, human rights, civil rights, and basic human decency.

TAKE ACTION:

1. ASK Obama to support Single Payer reform. Tell him it’s what the country wants and needs. We can’t afford not to have single-payer reform!

COMMENT HERE: http://www.healthreform.gov/contact/index.html

AND HERE: http://www.whitehouse.gov/contact/

CALL AND FAX: Phone: Comments: 202-456-1111;
Switchboard: 202-456-1414; FAX: 202-456-2461

2. WRITE TO YOUR SENATORS AND REPRESENTATIVES. You can find your elected officials’ contact information here: http://www.usa.gov/Contact/Elected.shtml
• Tell them that Single-Payer must be on the table.
* ASK your Senators to support S 703, The American Health Security Act.
* ASK your Representative to support HR 676, The United States National Health Insurance Act.

Senators Baucus and Grassley, the leaders of the Senate Finance Committee, are blocking Single-Payer from even being considered when over 60% of the public, doctors, nurses and economists want single-payer.
3. Write / call / fax Senators Baucus and Grassley. Tell Baucus and Grassley that SINGLE-PAYER REFORM, SHOULD BE ON THE TABLE AND GIVEN FULL AND FAIR HEARINGS BY THE SENATE FINANCE COMMITTEE.

Senator Max Baucus:
Phone: 202-224-2651
FAX: 202-224-9412, 202-224-0515, 202-224-5301
Billings, MT office FAX: (406) 657-6793
Email: http://baucus.senate.gov/contact/emailForm.cfm?subj=issue

Senator Charles Grassley, Senate Finance Committee FAX: (202) 224-5136

HEALTHCARE SHOULD BE A RIGHT, NOT A BUSINESS.