My friend is against the public option.

He says that it will be impossible to compete with a government run health option because insurance companies only make about 1-3 pennies off of every dollar that is paid out in premiums.

I have heard things about 30% overheads, and lobbying costs, and investment, and other shady record keeping tactics.

What is the real story? How much do they actually make in profit, and how are those costs handled?

In the UK we have the NHS (full state-run healthcare), and we also have private medical insurance. In 2007, a major provider of private UK healthcare, BUPA, with over 4m customers out of a population of about 60m, made £340m on revenue of £4.24b. That's an 8% profit margin.

If private care can work in a country where almost everyone uses state healthcare at state facilities, it can work in whatever system the US comes up with which will be much less nationalised and likely only focused on emergency care for the poor.

The real story is that HR 3200 is designed to create in the long run a single payer system which 88% of the country is against, UK and Canadian citizens hate and die b/c of waiting lists and ultimately they now want private ins.

The govt will mandate insurance to ALL small businesses and corporations alike with an 8% payroll tax if the employer opts out (say if the private ins he offers his/her small staff is better than the public option). In turn, due to overhead/admin costs, he will have to lay off more staff and the employees will go to the public option and wait in lines.

If you want to fix HC, open up state borders for competition, provide primary care phys. with incentives to work in communities where there is no other option, i.e. rural areas, take care of the problem with fraud which is 30+% of all Medicare/Medicaid costs, and stop baseless emergency room visits for headaches and the like. This alone will save billions and bend the cost curve substantially. I suggest you go to Youtube and type in "Obama 2003 single payer" and see where he really stands on this issue.

Hope this helps.

The NHS is certainly good enough. I'll tell you the opinion of the NHS here is very positive - if it wasn't, the Conservative Party who will likely be the next government would have adopted their historical policy of privatisation. There are no mass defections to private care.

It isn't as fancy as US care (the hospital isn't a dream holiday), but it works and, importantly, everyone is covered rather than only most of them. It's much cheaper as a percentage of GDP. And that's the right thing to do, because even rich people benefit from having the bottom third of earners healthy and able to work.

--

If you want to fix the healthcare system then elminate the major non-human cost - drugs. Nationalise dug reseach so the incentive is to cure people rather than put them on lifelong treatments; refuse to pay more than a certain amount for drugs otherwise acquire generics; reduce drug patent terms to really short times like 2-3 years. "Ask your doctor about..." is a destructive and wasteful state of affairs unique to private systems.

My friend also brought up an argument that people are going to want the most powerful drug available, and if someone dies because they were given a "second rate" drug (one that isn't touted as the best defense) they will sue.

I feel that some of these first rate drugs are the kind you described; they are lifelong treatments with side-effects which are treated by other drugs. It would seem that if, for example, a 5$ drug with a 49% effectiveness could substitute a 100$ drug with a 52% chance, and nobody could be allowed to sue if effectiveness falls in the crack, things would be much better.
What are your thoughts?

Nah. Private companies will be able to compete with the public option.

The public option is complete shit.

One congressment passed an ammendment that said "Every congressman must enroll in the public option."

The ammendment was shot down in flames.

The only problem with nationalizing research is that the US accounts for 70%+ of medical research.

You think our military spending is disproportiant... our medical spending is even more so.

In fact over the last 30 years or something we have more medical Nobel Prize winners then... well every other country put together.

Which is saying something considering how eurocentric some of the other awards like writing are.

Medical research would be so much behind if it wasn't for the US.  Which is the biggest risk of the US going full public healthcare.

The US private system is keeping the entire world healthier due to the mass competition for profits.

How about 30% instead of 50%?

Or one group gets the 50% and another group gets the 30%?

For example people under 45 get the 50% and people over 45 get the 30%?

Or those in Ohio get the 50% and some in Louisana get the 30%?

Or those who are sick in January - April get the 50% and May-Decemeber get the 30% because the program started costing too much money.

These are cases that happen in NHS that are less then ideal but happen due to the NEED to ration... so it ends up being arbitrary.

It's true that drug companies market new, more expensive drugs which may not be more efffective, and they don't just promote these drugs to patients, they promote them to doctors and pharmacists as well. This problem shows up in more socialized health care systems as well, which often don't include drug coverage at all.

However, just because a new drug is more expensive or generally less effective doesn't mean it's not useful. It can be useful if the disease is resistant to drugs which are usually more effective, or if the cheaper drug conflicts with some other drug the patient is using, or if the patient has an allergy or other condition which makes the cheaper drug risky.

Laws to restrict how drug companies promote their products don't really have anything to do with public or private health care, and most jurisdictions have some kind of restrictions as far as I know. If doctors are getting sued for not prescribing particular drugs, unless it's a really glaring case of negligence, I'd say tort reform should definitely be looked into. Having public health insurance might encourage governments to implement cost-saving laws like these, since they'd impact the government's own budget, but there's nothing stopping them from changing these regulations for a private health system.

Good thing the NHS isn't the only way to run a drug plan, then.

My province recently adopted a public drug coverage plan. It pays for most drugs, but doesn't usually extend to the latest and most expensive products by default, so people are encouraged to opt for the cheaper option but have the option of paying for more expensive drugs with private insurance or out of their own pocket.

My friend recently developed blood clots which required a treatment of blood thinners. A cheap drug was covered by the public plan, but she wasn't able to use that drug because it conflicted with another drug she was using. The alternative was a $7,000 treatment not normally covered by public insurance. She submitted a form for a special exception due to medical necessity and the province agreed to pay 80% of the cost on the 'arbitrary' grounds that she really needed the treatment.