It's the Administrative Overhead of the HMOs That's Killing Health Care

May 24, 2009 (LPAC)—While the number of physicians and nurses has increased about two-and-a-half to three times over the past thirty years—an increase in proportion with the growth of the population—the number of health administrators has grown by a factor of thirty. "These people are not doctors," said Dr. Sidney Wolfe, acting president of Public Citizen on Bill Moyers' Journal on PBS, on May 22. "They're not nurses. They're not pharmacists. They're not providing care. Many of them are being paid to deny care. So, they are fighting with doctors, with the hospitals to see how few bills can be paid. That's how the insurance industry thrives, by denying care, paying as little out as it can, getting the healthiest patients, and yet getting reimbursed as though these patients were sicker than they really are."

Wolfe appeared on the program with Dr. David Himmelstein, a faculty member of the Harvard Medical School and a co-founder of Physicians for a National Health Program, a 16,000-member advocacy group that supports a single-payer health insurance program. Himmelstein and his group argue that $400 billion a year can be saved just by eliminating the huge administrative and billing bureaucracy of the health insurance industry, thereby providing funds for all of the care that Americans need without denying care to any part of the population.

"That's the big problem here, is people want to find a solution that they can get through without a big fight with the insurance industry," Himmelstein said. "Unfortunately, it's economically and medically nonsensical,— you can't actually have a health program that works, if you keep the insurance industry alive."

"We don't need a health insurance industry," Wolfe added. "We can do what most other countries in the world have done. Have the government collect the money and pay the bills, and get rid of all these people who are wasting $400 billion a year on excess administrative costs."

Senate Finance Committee chairman Max Baucus (D-MT) has so far allowed almost no participation of single-payer advocates in his committee's deliberations, claiming that to do so would be wasting time on something that's "politically impossible."