The problem with a ‘voucher’ system where money runs through government is the overhead of the government on the ‘voucher’ system. That is a non-zero cost and predicated on the ability of that part of government to work efficiently. Having been in the US Federal Government working in the costing of work hours and burdening, the money you get out of the system is the ‘burdened’ money that has overhead to it to run the system. Your money goes in ‘unburdened’ with only the overhead of the tax collection system to it (which is an added cost, on its own). To transfer money within any government requires accountability and, thus, less money gets through as the cost of oversight must be included in that transfer. That transfer cost can be mitigated, but I’ve had problems finding any less than 10% burden on intra-government transfers due to overhead of accounting and tracking.

I tracked down the efficiency numbes for government agencies while I was an active employee in the 90′s and found my agency to be considered in a ‘top tier’ of lowest overhead agencies. Our burden rate, indeed that of the category, was 35%. None of these agencies were in ‘human services’ or tax collection. Most of HHS ran to 55% burden…

So lets take a look at that dollar in taxes and see what it gets you in return. Now that original collection 35% is on spent money not collected, so your tax dollars, in theory, fly through the collections agency like a hot knife through butter. In fact some gets lost to accounting within the agency, but lets give that a wash and say it doesn’t happen. Next comes the transfer 10%, which for the dollar you put in means 90 cents gets to its destination. Using HHS and its 55% burden rate, gets you 40.5 cents for actual agency activities. The dollar you put in for that ‘voucher’ means that your portion of that ‘voucher’ is far less than you had when you put money into the system. Even worse is that the voucher system, itself, has bureaucratic tracking and controls to it that include private insurers who then must spend time PROCESSING those funds and accounting for them. Taking an industry standard efficiency rate (from the US, that is) of 20% burdened cost, you then apply that and get a real value of 32.4 cents. When government dictates prices below market prices for any procedure and it is lower than market rates, the end provider must absorb not only that lower rate but absorb the burdening of those funds to pay for the procedure and its accounting to the government.

Every time money shifts around inside government, each sub-unit is responsible for cost accounting and controls in EACH direction. Thus your money supports inflow and outgo at the taxation end, the receiving agency end intra-government, then in and out for the outside provider.

Each and every time Congress adds more ‘oversight’ via another layer of bureaucracy, you not only have the tracking loss but the internal loss that accrues to that sub-unit. And the laws handling each of these realms is different, so requires either a very high paid staff or duplicate staff to cover each area, and that is at the highest, agency level end, but must be replicated through the internal agency organs that finally deliver a ‘voucher’ to you.

As the HHS is already at its limits for personnel for SSN and other fine and lovely programs, getting ‘health care’ even if it is a ‘voucher’ system will require a large overhead of bureaucrats to run the thing. And as government has no need to make a profit, it has zero incentives to be efficient with your money. And every regulation, every ‘good thing’ that gets put into bills for government gains that overhead of personnel to track it as it is the law.

Too bad you can’t invest that money and have a hope of a decent return.

Or give it to charity to truly let the people who have an interst in cutting cost do so… but for that you need to stop subsidizing health care from government and wasting the taxpayers dollars for high overhead, low return systems from government. But then we are so used to the statist and corporate view that we forget that WE are supposed to be providing these things and are the ones responsible to our fellow man. Not government or corporations. Too bad no one wants to take personal responsibility for their health care dollars any more. We are all poorer for it.