Comments on: Health premiums: Where does the money go? http://www.hrbenefitsalert.com/health-premiums-where-does-the-money-go/ Daily dose of benefits news and know-how Tue, 04 Aug 2009 18:30:38 -0400 http://wordpress.org/?v=abc hourly 1 By: Jeanette http://www.hrbenefitsalert.com/health-premiums-where-does-the-money-go/comment-page-1/#comment-1379 Jeanette Fri, 14 Nov 2008 17:35:22 +0000 http://www.hrbenefitsalert.com/?p=308#comment-1379 It has been over 4 years since I saw a breakdown of the distribution of health care premiums. At that time the administrative cost for traditional medical care was said to be 25%. At the same time the administrative cost for medicare was 3.5%. I doubt the numbers have changed much, but I would welcome new data. All in all the above numbers track with the rest of the developed world, where "socialized" or "universal" health care is substantially less expensive than it is here. The entire rest of the world cannot be totally wrong. It has been over 4 years since I saw a breakdown of the distribution of health care premiums. At that time the administrative cost for traditional medical care was said to be 25%. At the same time the administrative cost for medicare was 3.5%. I doubt the numbers have changed much, but I would welcome new data.

All in all the above numbers track with the rest of the developed world, where “socialized” or “universal” health care is substantially less expensive than it is here. The entire rest of the world cannot be totally wrong.

]]> By: Mike R http://www.hrbenefitsalert.com/health-premiums-where-does-the-money-go/comment-page-1/#comment-1375 Mike R Fri, 14 Nov 2008 16:26:06 +0000 http://www.hrbenefitsalert.com/?p=308#comment-1375 I had hoped that the article was going to shed light on where all the premium money goes, rather than focus on the 10% used for "defensive medicine." Instead of shedding light on that subject, the article seems to promote insurance companies who promote "good utilization" practices. I would suspect that a large percentage is spent on "administration" and another on "advertising and lobbying." It seems to me that the insurance companies do not want healthcare to cost less, because they get a percentage of the cost. They are like the banking industry and the stock market, where they provide a "service" and nothing is really produced. You make mention of the "defensive medicine practice" but make no mention of what percentage is used to pay malpractice claims. Politically that has been drummed into the public that the high cost of medicine is due to these lawsuits. However, all the figures I can find, show that the amount paid out in malpractice is a drop in the bucket compared to all the other costs. I live in a city with four major hospitals. Current business models seem to inidcate that for cost effectiveness, they should merge and eliminate redundant services. I know a few conservatives that believe that would be great, just don't let the government do it, because that would be "socialism." What is the total dollar amount spent on healthcare by insurance companies each year? What is the total dollar amount collected from premiums? How is THAT difference being spent? I fear that the reality is, every change a business makes based on these articles may result in a short term savings, but the real monster is the system and it is determined to grow and consume more of our hard earned dollars. Only instead of dollars it appears as a 0.012% increase. (But on 100 billion dollars a 0.012% increase is significant.) I had hoped that the article was going to shed light on where all the premium money goes, rather than focus on the 10% used for “defensive medicine.” Instead of shedding light on that subject, the article seems to promote insurance companies who promote “good utilization” practices.

I would suspect that a large percentage is spent on “administration” and another on “advertising and lobbying.” It seems to me that the insurance companies do not want healthcare to cost less, because they get a percentage of the cost. They are like the banking industry and the stock market, where they provide a “service” and nothing is really produced.

You make mention of the “defensive medicine practice” but make no mention of what percentage is used to pay malpractice claims. Politically that has been drummed into the public that the high cost of medicine is due to these lawsuits. However, all the figures I can find, show that the amount paid out in malpractice is a drop in the bucket compared to all the other costs.

I live in a city with four major hospitals. Current business models seem to inidcate that for cost effectiveness, they should merge and eliminate redundant services. I know a few conservatives that believe that would be great, just don’t let the government do it, because that would be “socialism.”

What is the total dollar amount spent on healthcare by insurance companies each year? What is the total dollar amount collected from premiums? How is THAT difference being spent?

I fear that the reality is, every change a business makes based on these articles may result in a short term savings, but the real monster is the system and it is determined to grow and consume more of our hard earned dollars. Only instead of dollars it appears as a 0.012% increase. (But on 100 billion dollars a 0.012% increase is significant.)

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