Sure, and 3) taking out provider and insurer administrative costs. TONS of time is spent in the US by providers and insurers deciding and arguing about who should pay for a service, how much the payer should pay for it, and who should pay the rest. TONS of people are employed just working on this problem. In contrast, where there is one price for a service, and one payor which pays the entire price, then everything is vastly simplified.
As an example, when I go to the doctor, my doctor has to figure out which insurance to bill, and follow that insurer’s specific procedures and forms. Then the insurer has to figure out what the contract is with that specific doctor and what their contract is with me in order to determine how much they will pay. Assuming they pay anything, then they send me an Explanation of Benefits laying this all out and the doctor then has to decide how to get the remainder of the money if there is some left over: do I have secondary insurance? Or can they bill me for the rest? or is there a legal or contractual reason that they have to write off the balance? Often they will bill me – usually using a third party billing company that exists solely for this purpose.
In contrast, my son, because of his disability, has some services covered by medicaid (Medi-Cal in California). For those services, we simply show up at the doctor. The doctor bills Medi-Cal for the Medi-Cal established price for the service (probably too little but that’s a different topic). Medi-Cal pays that one established price in full. Nobody bills us.
In the US., 25% of hospital spending is administrative vs. 12% in canada: http://www.commonwealthfund.org/publications/in-the-literature/2014/sep/hospital-administrative-costs
In some states, over 50% of doctors’ expenses are for billing and insurance. Thus, multiple studies find that we could save hundreds of billions of dollars in administrative costs by going with single payer. Billing and insurance-related administrative costs in United States’ health care: synthesis of micro-costing evidence - PMC
