High costs and profits are no doubt a reason for rising costs of health care. Since more of our money is going to insurance companies and doctor's offices, we have to believe that someone is seeing the profits. Last week in class, we talked about how hard the founding fathers of medical schools and the health care industry in the US struggled to distinguish themselves from the rest of society. Today, this remains true. Not everyone can be a neurologist or cardiologist, and so just like any other industry, we are paying for their expertise. Therefore, it makes sense that these kind of people see the profit.

On the flip side, if we begin to see similarities to Taiwan 2.2% of cost going to administrative cost, will we also begin to see the troubles that Taiwan is seeing in staying afloat. Watching the frontline piece, we learned how Taiwanese and Japanese hospitals are borrowing money to stay open. Do we owe our hospital success to these high administrative costs. Will we also see a a decline in the "luxury" of our hospital rooms. Are Americans really willing to give up this comfort to see a drop in prices?

An article in the New England Journal of Medicine, Costs of Health Care Administration in the United States and Canada (http://content.nejm.org/cgi/content/short/349/8/768) points out how adopting a Canadian-style health care system could save us money.

From the article:

"Results In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada.

Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations' figures exclude insurance-industry personnel.)

Conclusions The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system."

But then again, you ask yourself are Americans ready for a complete change in healthcare?