Medicare has a lower operating overhead than private sector payers and doesn't need to make a profit. Doesn’t that mean that if government were the only payer we’d save billions on overhead costs that don’t help patients?

Background Information

Debate Question:This is what a short summary question would look like.

Medicare’s overhead rate is about 3%, similar to the 2% in Canada, and far lower than that typical 12-13% of private insurers.
in favor
against

Overhead as a percent of total costs usually is lower with larger organizations, and this wasteful expense would be greatly reduced by many billions of dollars if we expanded Medicare. 

Zetema PanelistZetema Panelist In Favor
  • +1 Good Point

Overhead is more due to complexity than size. Making Medicare the sole payer would greatly increase the complexity it would face, so overhead would grow too.

Zetema PanelistZetema Panelist Against
  • Good Point +1

Medicare’s lower overhead rate shows that it can operate more efficiently than private insurers can.

Zetema PanelistZetema Panelist In Favor
  • +1 Good Point

Medicare’s overhead costs are lower because it doesn’t use resources (or it uses insufficient resources) to manage quality, utilization, costs, and fraud.

Zetema PanelistZetema Panelist Against
  • Good Point +1

Medicare doesn’t need to make a profit the way that private insurers do, so those excess funds would be available for care delivery or subsidies rather than going to overhead.

Zetema PanelistZetema Panelist In Favor
  • +1 Good Point

Insurer profits account for only a fraction of the difference in overhead rates vs. the government. More of the difference is due to insurers actively managing cost and quality.

Zetema PanelistZetema Panelist Against
  • Good Point +1

Overhead is healthcare money that doesn’t go to providers to treat patients, and should be minimized.

Zetema PanelistZetema Panelist In Favor
  • +1 Good Point

Much overhead is used to ensure that the care that is delivered is high quality, cost-effective, and needed. These crucial functions cost money, and insurers do far more of them than Medicare currently does. 

Zetema PanelistZetema Panelist Against
  • Good Point +1

What do you think?

Medicare has a lower operating overhead than private sector payers and doesn't need to make a profit. Doesn’t that mean that if government were the only payer we’d save billions on overhead costs that don’t help patients?

Medicare has a lower operating overhead than private sector payers and doesn't need to make a profit. Doesn’t that mean that if government were the only payer we’d save billions on overhead costs that don’t help patients?

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