Radical health-nazis, like the PNPH are quick to tell you that over 30% of every health-care dollar is spent on administrative costs, profits, and bureaucratic paperwork. Who knows whether this is appalling or not? Insurance is a tough business – about which most people don’t have a fucking clue. Fortunately, Presidential candidate John Edwards, has a “solution” to this “problem.” As potential Health-Care Kommandant, his vision of the future of the industry involves more ham-fisted regulation:

Three out of every $10 in insurance premiums now go to patient care and the rest goes to administrative costs and profits. I would require that to be 85%.

First things first: Do patients get $7 worth of care for $10 worth of premium – as per the PNPH, or do they only get $3, like Mr. Edwards claims? If what Mr. Edwards claims is factual, then it ought to be abundantly clear that only legislation and regulation can reduce an industry to such a level, and that no amount of additional regulation can rescue it. But if he’s wrong, and he almost certainly is wrong, Edwards is still asking them to halve their costs of doing business; from 30% to 15%.

That sounds noble enough, no?

Listen closely so I don’t have to repeat myself: if any of these companies could cut their costs in half, they wouldn’t need Johnny-boy to provide the impetus. The motive for profit will suffice, as it always has in the past.

The hardest of all costs to cut are administrative costs (do you want a person to answer the phone, or do you want an automated-phone-system), but in particular, compliance costs and regulatory burden, for which no process improvement is possible. It’s not like you can just write up your flow-chart, and decide which regulatory burdens you’re not going to care about this year, which ones you can axe, which ones can be streamlined, and which ones need improvement. These decisions are not up to the businesses who are merely trying to operate in a regulatory jungle; Mr Edwards would add another layer to the canopy that blots out the sun.

I’d suggest, as a first measure, removing 1/2 of all regulatory burdens placed on insurers and pharmaceutical companies. Let’s see how that shakes out, because, Mr Edwards, you can’t re-write the laws of economics.