Admistrative Burden

In an interesting op-ed (link) in today's New York Times, Paul Krugman discusses the differences in public vs. private administrative costs - 4% versus 15%. He argues that large private bureaucracies focus on “passing the buck” resulting in major cost shifts to individuals, employers, providers and the public health care programs. The answer? Take a long hard look at cutting administrative costs.
Other countries have systems providing coverage for everyone with administrative overhead close to 4%. MASS-CARE has filed legislation to achieve that goal. President Travaglini’s proposal, the Governor’s and Health Care for All’s rely more on market-based reforms.
Whatever the conclusion to the debate among competing reform proposals, the key role of administrative costs should never be lost.
It doesn't take much in administrative savings to cover the health care costs of the uninsured. In Massachusetts, moving from 15% to 14% - 1 percent point - saves $520 million. According to the Massachusetts Blue Cross Blue Shield Foundation, that's enough to pay for the care of today's uninsured (see report).
The constitutional amendment does not specify one approach over another. However, passing the amendment will require everyone—insurance companies, government officials, businesses, providers and all the other stakeholders, to sit down and figure out a solution that works for everyone. A leaner, less bureaucratic health care payment system has to be part of that solution.