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Updated on July 26, 2010


On Monday October 26,2009 I read two articles that should have a significant impact on the debate in the United States concerning health care reform. One article was by Thompson Reuters concerning waste in heath care spending. The other was a report by Calvin Woodward of The Associated Press concerning profits of health care insurers.


The author of the Thompson Reuters report was Robert Kelly, vice president of health care analytics at Thompson Reuters. The report summarizes that in the US health care system there is $650 to $800 billion of yearly wasted spending. This constitutes 1/3 of all US yearly health care costs. Since uninsured US citizens are pegged at 15% of the population in numerous publications the 33% of wasted spending represents a tremendous opportunity towards solving the health care crisis.

If only one half of the waste is eliminated this would more than cover the cost of health care for the uninsured. The Thompson Reuters white paper further breaks down the waste into several categories. The top three categories cover 76% of the cost.

  1. 40% unnecessary care. Overuse of antibiotics and defensive medicine.
  2. 19% Fraud
  3. 17% administrative inefficiency, redundant paper work.

Tackling and solving these three categories would result in savings of $488 to $600 billion per year. This would amount to a reduction of 20.3% to 25.0% per year.

With some health care cost already being born on uninsured citizens the saving above should be more than adequate to cover the uninsured. I would suggest that health care legislation be directed towards savings first and then with the money saved supply insurance for the uninsured. _room/tsh/waste_US_healthcare_system




The headline of this report is “FACT CHECK: Health Insurers’ Profits 35th of 53”

The article states that in past years health insurers’ profits are about 6%, but the last annual profit margin was a little over 2%. The best performing health insurer was HealthSpring at 5.4%, which was below Clorox, Tupperware, and Molson and Coors beer.

This report would tend to belie the claims that health insurers make obscene profits.









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    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      He writes comments that are off point, and longer than the hub he is commenting about. He has liberal ADHD.

    • SheriSapp profile image


      9 years ago from West Virginia

      Tom--right you are in every way. Don't let old Ralphie get a rise out of you, I think he just reads and comments on our blogs to assure himself that his heart is still pumping. Maybe Barry can offer him a job as czar of the unrealistic!!!

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      I do agree with you about the abuses of both the medical profession and the pharma industry. I think for the most part chemotherapy is nothing but modern day snake oil. Of the survey I have seen of oncologist only about 30% would undergo chemotherapy or recommend it for a family member.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      Thank you for your visit and your comments.

    • Ralph Deeds profile image

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      Tom, The "no" was not from Wikipedia, it was from

      "a narrow minded dictatorial little weenie" who deleted links to two of my photo Hubs that would have been of interest, in my opinion, to many people accessing the Wiki entry on Birmingham. Wikipedia is not hospitable to HubPages links. For a while Wikipedia was a significant source of traffic for me. Now, most of my links have been deleted from the site.

      Tom, very true.The medical profession invents new diseases or syndromes for which the pharmaceutical industry provides new pills, especially in the mental health field. Many of our problems are self-inflicted with a little help from the agri-business industry and ridiculous corn subsidies.

    • James A Watkins profile image

      James A Watkins 

      9 years ago from Chicago

      You know, I heard the other day that 20% of all adults are on anti-depressants. And that 75% of our entire health care cost is from either Diabetes, heart problems, and Cancer—all linked to our diet, lack of exercise, and fatness. I don't know if all the money in the world can solve our problems since they seem to be self-inflicted.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      You even can't take no for an answer from Wikipedia.,_Mich...

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      I'm quite sure these big government solutions will be every bit as cost effective as previous ponzi schemes passed by progressives. Between Social Security, and Medicare we have unfunded mandates of $100 trillion. And the welfare state managed to inslave the poor while driving fathers out of homes making a permanant underclass.

      The re-distribution of wealth hasn't worked anywhere. Trying the same old thing over and over while expecting a different result is the definition of insanity. Go take your meds.

    • Ralph Deeds profile image

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      Op-Ed Columnist

      The Defining Moment


      Published: October 29, 2009

      O.K., folks, this is it. It’s the defining moment for health care reform.

      The New York Times

      Paul Krugman

      Past efforts to give Americans what citizens of every other advanced nation already have — guaranteed access to essential care — have ended not with a bang, but with a whimper, usually dying in committee without ever making it to a vote.

      But this time, broadly similar health-care bills have made it through multiple committees in both houses of Congress. And on Thursday, Nancy Pelosi, the speaker of the House, unveiled the legislation that she will send to the House floor, where it will almost surely pass. It’s not a perfect bill, by a long shot, but it’s a much stronger bill than almost anyone expected to emerge even a few weeks ago. And it would lead to near-universal coverage.

      As a result, everyone in the political class — by which I mean politicians, people in the news media, and so on, basically whoever is in a position to influence the final stage of this legislative marathon — now has to make a choice. The seemingly impossible dream of fundamental health reform is just a few steps away from becoming reality, and each player has to decide whether he or she is going to help it across the finish line or stand in its way.

      For conservatives, of course, it’s an easy decision: They don’t want Americans to have universal coverage, and they don’t want President Obama to succeed.

      For progressives, it’s a slightly more difficult decision: They want universal care, and they want the president to succeed — but the proposed legislation falls far short of their ideal. There are still some reform advocates who won’t accept anything short of a full transition to Medicare for all as opposed to a hybrid, compromise system that relies heavily on private insurers. And even those who have reconciled themselves to the political realities are disappointed that the bill doesn’t include a “strong” public option, with payment rates linked to those set by Medicare.

      But the bill does include a “medium-strength” public option, in which the public plan would negotiate payment rates — defying the predictions of pundits who have repeatedly declared any kind of public-option plan dead. It also includes more generous subsidies than expected, making it easier for lower-income families to afford coverage. And according to Congressional Budget Office estimates, almost everyone — 96 percent of legal residents too young to receive Medicare — would get health insurance.

      So should progressives get behind this plan? Yes. And they probably will.

      The people who really have to make up their minds, then, are those in between, the self-proclaimed centrists.

      The odd thing about this group is that while its members are clearly uncomfortable with the idea of passing health care reform, they’re having a hard time explaining exactly what their problem is. Or to be more precise and less polite, they have been attacking proposed legislation for doing things it doesn’t and for not doing things it does.

      Thus, Senator Joseph Lieberman of Connecticut says, “I want to be able to vote for a health bill, but my top concern is the deficit.” That would be a serious objection to the proposals currently on the table if they would, in fact, increase the deficit. But they wouldn’t, at least according to the Congressional Budget Office, which estimates that the House bill, in particular, would actually reduce the deficit by $100 billion over the next decade.

      Or consider the remarkable exchange that took place this week between Peter Orszag, the White House budget director, and Fred Hiatt, The Washington Post’s opinion editor. Mr. Hiatt had criticized Congress for not taking what he considers the necessary steps to control health-care costs — namely, taxing high-cost insurance plans and establishing an independent Medicare commission. Writing on the budget office blog — yes, there is one, and it’s essential reading — Mr. Orszag pointed out, not too gently, that the Senate Finance Committee’s bill actually includes both of the allegedly missing measures.

      I won’t try to psychoanalyze the “naysayers,” as Mr. Orszag describes them. I’d just urge them to take a good hard look in the mirror. If they really want to align themselves with the hard-line conservatives, if they just want to kill health reform, so be it. But they shouldn’t hide behind claims that they really, truly would support health care reform if only it were better designed.

      For this is the moment of truth. The political environment is as favorable for reform as it’s likely to get. The legislation on the table isn’t perfect, but it’s as good as anyone could reasonably have expected. History is about to be made — and everyone has to decide which side they’re on.

    • Ralph Deeds profile image

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      The House Health Reform Bill

      Published: October 29, 2009 NY Times

      The Senate should pay attention to the health care reform bill unveiled on Thursday by House Democratic leaders. The bill would greatly expand coverage of the uninsured while reducing budget deficits over the next decade and probably beyond. It includes a public option that is weaker than we would like, but it still deserves to be approved by the House.

      Readers' Comments

      Readers shared their thoughts on this article.

      * Read All Comments »

      The coverage expansions would carry a net cost to the federal government of $894 billion over the next decade, according to the Congressional Budget Office. Yet the bill would generate enough revenue from new taxes and from savings in Medicare to offset that cost and reduce the deficit by $104 billion over the course of the decade.

      The chief source of tax revenue would be a surcharge on the portion of annual income above $1 million for couples and $500,000 for individuals. The wealthy prospered enormously from tax cuts under the Bush administration. It is fitting that they pay a heavy share of the cost of health care reform.

      The bill requires employers, except for small businesses, to offer health coverage to their workers and pay a substantial share of the premiums or face a big penalty. That would be a useful prod to make insurance more available and affordable to employees.

      The bill would meet President Obama’s insistence that health care reform not add to the deficit — provided Congress holds firm on slowing the growth rate of payments to health care providers serving Medicare. Of special importance, the trend line for deficits would be heading down toward the end of the decade, suggesting that it would continue on down thereafter. This is a fiscally prudent bill, not a reckless dash toward ever-higher deficits as Republicans contend.

      (To make ends meet, the Democrats dropped a costly fix for the unrealistic formula used to reimburse doctors under Medicare. That will be tackled in separate legislation, and ought to be paid for with new revenue.)

      Under this bill, the number of uninsured would plummet. Since Congress is determined to exclude illegal immigrants, the salient fact is that by 2019, the bill would provide insurance to 96 percent of all nonelderly citizens and legal residents, leaving about 12 million of them uninsured. It would achieve this feat by making a lot more people eligible for Medicaid, a program for the poor, and by helping tens of millions of low- and moderate-income people buy policies on new insurance exchanges, in which private plans and possibly a public plan would compete for people who lack employer-provided insurance or work in small companies.

      Speaker Nancy Pelosi wanted a strong, money-saving public option that would pay hospitals and doctors based on Medicare rates, but she could not win over enough conservative Democrats. Her fallback is to have the secretary of health and human services negotiate rates with health care providers as private insurers do.

      The Congressional Budget Office considers this so weak that it might attract only 6 million of an estimated 30 million people buying insurance on the exchanges in 2019. Its premiums might exceed the average private plan, in part because the sickest people might migrate to the public plan.

      Still, the House bill has a lot of provisions for consumers to like. It would require insurers to allow young people through age 26 to remain on their parents’ policies. It would provide immediate help to people who have been uninsured for several months or denied coverage because of pre-existing conditions. It would speed elimination of a gap in drug coverage for Medicare beneficiaries (the so-called doughnut hole) and would give the government power to negotiate drug prices on behalf of Medicare beneficiaries, a promising way to reduce costs.

      The bill would take a long stride toward universal coverage while remaining fiscally responsible. Senate leaders should try to do as well.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV

      I can just picture the Baroness of Botox behind bars. What a visual.

    • vrajavala profile image


      9 years ago from Port St. Lucie

      We can only pray that he is forced out of office, discovered to be the "usurper" that he is and all these horrific pieces of legal garbage will have no validity.

      BTW, Nancy Pelosi sent altered certifications to the Secretaries of State in 49 States, leaving out the important phrase (Barack Hussein Obama) "is constitutionally eligible")

      When needs to be put behind bars, where she can receive her Botox treatments

      We have been punked, methinks.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV

      The overuse of medication referred to in the Thompson Reuters white paper specifically refers to overuse of antibiotics. This overuse of antibiotics is directly responsible for the drug resistant strains of bacteria.

      The white paper is also specifically critical of defensive tests which are perfomed for no specific medical reason except to safeguard the physician from frivilous lawsuits.

      With doctors having to safeguard themselves they can become distracted and end up neglecting actually needed tests. I also want minimum government involvement in all phases of the economy.

    • eovery profile image


      9 years ago from MIddle of the Boondocks of Iowa

      I think they are bias on the over medicating and other garbage.

      My son had a hot spot show up on his liver, for a ct scan of his lungs. The local quacks did the work and thought it was in material, and only answer was, after one year of watching it, is "it can't be cancer because he would be dead by know if it was." So wrong. There is a slow cancer that starts in the liver. After taking him to Mayo Clinic, and listening to "Thee Expert" say, it can't be cancer makes be feel batter, but at the same time, he can explain what is going on, and wants to do another MRI in 6 months to follow up. I say screw the people who say we are over medicating and doing too many tests. They still do not know for sure what is going on. I have a friend who is dieing from this slow growing cancer. She has been fighting it for over 15 years, She had a liver transplant and everyone thought that it would be cure everything. She then got cancer in her limp nodes on her throat and spinal cords. Now she has probably less than 3-6 months to live. If the health care reform is done, my son's diagnosis was be over after the first test. Screw the new health reform. It is not always about the money!!!!! The government is not going to tell me my son cannot have another test.

      Keep on hubbing!

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV

      Thanks jib,

      I'm trying my best to come up with logical solutions with no political bias.

    • jiberish profile image


      9 years ago from florida

      Great Ideas Tom, I'm holding my breath to see what they'll come up with next. Keep putting out these great hubs.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV

      That is why I am trying to propose a solution with minimum government involvement. All they have to do is eliminate existing waste. Prosecute fraud, implement electronic records, and implimentation of tort reform would be a minimal effort. Allowing interstate sale of insurance would be a bonus.

    • ehern33 profile image


      9 years ago

      All I can say is all this is a scam. If a company was to conduct business like this they would be sued and fined until there is no tomorrow. If they purposely tried to manipulate, rename, blackmail, bankrupt, and had total disregard for the consumer, some would even be facing prison terms. Yet Reid and company can do it.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      The savings could accrue and be saved until 2013 and then be applied to insurance for the uninsured. Everyone else should be left alone.

      Prove the savings first and then institute the insurance.

      I sent this to John Boehner.

      I haven't had anything but virtual alcohol sinse 1991.

    • Pamela99 profile image

      Pamela Oglesby 

      9 years ago from Sunny Florida

      Good hub Tom. I think your solution is great. Now they are talking about the states that will be able to opt out of the government insurance but as I understand it the citizens of those opt-out states will still have to pay. I think they all ought to be impeached, starting at the top! The legislators are ignoring the polls that tell them we don't want government health care. Is is too early for a drink???

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV


      Are you implying the Thompson Reuters or Associated Press articles are involed in your link. I read the material in your link and found it irrelavant. I know you prefer a big government solution but I find it's not necessary.

      Or did you just drop by to click the down button?

    • Ralph Deeds profile image

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      A Delicate Dance for 2 Health Lobbyists


      Published: October 27, 2009

      WASHINGTON — One is a smooth-talking former congressman from Louisiana — “the Swamp Fox,” constituents called him — who relishes his image as a rascal, a charmer and a Cajun raconteur. The other is a fireman’s daughter from working-class Rhode Island, strait-laced and studious, who mastered the arcane world of health policy as an analyst for the A.F.L.-C.I.O.

      Here's a link to the article.

    • Tom Whitworth profile imageAUTHOR

      Tom Whitworth 

      9 years ago from Moundsville, WV

      There is a lot of rhetoric that would tend to foster those beliefs. I waited until I could check on Thompson Reuters and Associated Press to make sure I could find no past practice of bias before using them as a source for this hub.

    • dahoglund profile image

      Don A. Hoglund 

      9 years ago from Wisconsin Rapids

      I find that some people, including friends of mine, tend to think all business is evil and making obscene profits. Unfortunately they are probably not exposed to actual facts.


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