Comprehensive Healthcare System To Replace Medicaid & Medicare
Why do we need to replace Medicaid and Medicare?
Expensive- In 2021,Medicare and Medicaid cost $1.635 trillion. Source 1
Destructive-
- Medicare and Medicaid pay less than the cost of caring for program beneficiaries – a shortfall of $75.8 billion in 2019 borne by hospitals.Source 9
- Hospitals provided $41.6 billion in uncompensated care, both free care and care for which no payment is made by patients, in 2019.Source 10
- Private insurance and others often make up the difference.
Results - 53% of hospitals are operating in the red as of 2024” Source 2
- 181 rural hospitals have shut down between 2005–2018.” with 60% operating in the red as of
- Source 3
- In 2023, 65% of doctors said they would continue taking Medicare and Medicaid patients,
with 8% more not taking any patients- Source 4 - 188 nursing homes shut down in 2023 with 90% of them shutting down because of financial
hardship vs neglect of patients- Source 8 - It takes 7 months to qualify for Medicare/Medicaid. From that day, it is an additional 2 years
to use those benefits- Source 7
Infrastructure We Can Build Upon - The VA has 152 medical centers and 1,400 outpatient facilities.”- Source 5 2. There are over 1400 free/charitable clinics in the USA.”- Source 6
Key Goals of the Proposal
- Replace Medicare and Medicaid: This proposal seeks to completely replace Medicare and Medicaid with a separate government-run healthcare system that is designed to relieve pressure on both private healthcare providers and the taxpayer. By eliminating the complexities of these programs, the government can streamline healthcare delivery, reduce administrative costs, and provide more consistent care to all individuals.
- Create an Identical Government Healthcare System: The government healthcare system would mirror the services and structure of the private healthcare industry, but would be completely separate and non-reliant on private sector resources. Perspective patients would have the ability to simply walk in and get the healthcare services they need.
- Reduce Insurance Costs and Increase Access: By taking on the responsibility of treating high-risk and chronic patients, the government system would significantly lower costs for private insurers. This reduction in risk allows private insurance companies to lower premiums Source 11, making insurance more affordable and accessible.
- Rapid Infrastructure Expansion Through Buyouts: To quickly build this system, the government would buy out failing clinics and hospitals at full valuation, ensuring a rapid expansion of services, especially in rural areas, while keeping existing staff employed and preserving essential healthcare access
Why buy failing hospitals and clinics? - The general purchase price of a hospital in distress is 20% to 40% of it’s valuation. 2. No health deserts
- No multi-year land acquisition, construction, and equipping processes.
- Nobody loses their jobs.
Capital Investment- (Purchasing the hospitals)- - Cost of 300 bed hospital- 60-156 million dollars to build brand new, before staffing equipping, 2. Failing hospitals bought at 40% of valuation
- Cost per hospital- $62.4 million dollars (40% of $156 million)
- Cost of 1800 hospitals- $112.32 billion. Source 2
Capital Investment- (Purchasing the clinics)- - Clinic startup cost- $100,000 to $850,000
- Failing clinics are bought at 20 to 40 percent of valuation. 3. Cost per clinic- $340,000 (40% of $850,000)
- 10,000 clinics- $3.4 billion. Source 3
Total Investment- The total cost for the acquisition of the offices and hospitals would be $115.72 billion.
What are the costs of running the operation?
Combined Total- $333.712 Billion to $535.917 Billion Per Year
Contingency 20% Adjusted Total- $400.454 Billion to $643.1 Billion Per Year
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Section 1: Staffing Breakdown And Salary
Total Staff Count 300 Bed Hospital- There is around 2000 full/part time staff that work in a 300
bed hospital. Source 4
Staff Breakdown- 1,230 to 1,580 staff members
Staff Cost- $99.2 million and $201.15 million per hospital
These number estimations are the the higher end and are designed for maximum expense estimations*
What is the average clinic staffing cost?
Total is $536,000 for the average clinic.
What is the total staffing cost for the 1800 hospitals and 10000 clinics? $178.56 to 362.070 + $ 5.96 Billion = $184.52 to $368.03 Billion
Section 2: Total Equipment Maintenance Costs
Costs generally run 10%-18% over the 10 year expected lifespan of the machines for maintenance and with optimization as low as 7%-9%. Final cost for maintenance based on higher numbers for realistic max figures. Source 5
Total Equipment Purchase Cost (Capital Assets Single Purchase) Hospitals
Total Cost Of Investment Brand New Machines- $11.37 to $23.8 million
Total Cost Of Maintenance over entire lifecycle- $1.137 to $4.284 million
Total Cost of Maintenance per year- $113,700 to $428,000 per year per hospital Total Cost of Maintenance per year for 1,800 hospitals- $204.66 to $770.40 million
Total Equipment Purchase Cost (Capital Assets Single Purchase) Clinics
Total Cost Of Investment Brand New Machines- $211,000 to $437,000
Total Cost Of Maintenance over entire lifecycle- $21,100 to $78,660
Total Cost of Maintenance per year- $2,110 to $7,860 per year per clinic
Total Cost of Maintenance per year for 10,000 clinics- $21.1 to $78.66 million
Total Combined Yearly Hospital/Clinic Maintenance Cost- $225.76 to 770.4 million
Section 3: Consumables
Hospitals generally spend a significant amount on consumables annually. For example, medical and surgical supply costs alone accounted for about $64.4 million per year in hospitals with 250+ beds, which is approximately $215,000 per bed. These consumables include items like surgical gloves, syringes, IV supplies, and more. This estimation is HIGH, because the figure is an average for hospitals with 250+ beds, no limit as to the upper end bed count. This is a catch all figure. Source 6
Gloves, syringes, and IV supplies (everyday consumables) Implantable devices (like artificial joints, pacemakers)
Medical instruments (single-use or reusable with high sterilization costs) Surgical tools and disposables (scalpels, drapes)
Pharmaceuticals and medications
Diagnostic equipment maintenance supplies
Consumables per bed per year in hospital setting- $215,000 Consumables per year- 78.475 Million
Consumables for 1,800 hospitals- $141.255 Billion
Consumables per bed per year in clinic setting- $15,000 to $30,000 Number of beds per clinic- 10-20 beds
Consumables per year- $150,0000 to $600,000
Consumables for 10,000 clinics- $1.5 to $6 Billion
Total Consumables Across Total System A Year- $142.755 to $147.255 Billion Section 4: Utilities
- Hospitals- 247,000 square feet- 31 kwh/ft/year
- Mid size clinics- 6000 square feet- 14.3 kwh/ft/year Source 7
- Hospitals use 570 gallons/day/bed.
- Clinics- 150 gallons/day/bed Source 8
- Average cost of electricity- $0.1545/kwh. Source 9
- Average cost of water- $0.0082 per gallon Source 10
- Electricity/water per hospital- $1.183M+0.512M= $1.695 Million 8. Electrictiy/water per clinic- $13,256+$5387= $18,643
- Hospitals Total- $3.051B Clinics Total- $186.43M
Total Utilities for entire medical system- $3.236 Billion
Section 5: Insurance
As per industry standards for hospitals, this is how hospital insurance costs break down 1. Malpractice Insurance- $3,000 to $10,000 per year per physician
2. Worker’s Compensation Insurance- $1,000 to $5000 per employee per year
3. Liability Insurance Total- $11,000 to $30,000 for both general/professional liability
4. Number of Physicians- 100 to 120
5. Number of Staff- 1,230 to 1,580
6. Malpractice Insurance Total- $300,000 to $1.2 Million
7. Worker’s Compensation Insurance Total- $1.230 Million to $7.590 Million 8. Total Insurance Costs Per Hospital- $1.541 Million to $8.820 Million Total Costs For All Hospitals- $2.785 Billion to $15.876 Billion
As per industry standards for clinics, this is how insurance breaks down 1. ClinicMedical malpractice insurance: $10,000 to $40,000
2. General liability insurance: $2,000 to $10,000
3. Property insurance: $2,000 to $10,000
4. Workers’ compensation insurance: $5,000 to $15,000
5. Total Insurance Cost Per Clinic- $19,000 to $75,000
Total Insurance Cost For All Clinics- $190 million to $750 million
Total Cost For Insuring Entire Health Care System- $2.975 Billion to $16.626 Billion
Section 6: Licensing And Accreditation
Hospital Licensing Source 11
- Acute Care Hospitals Per Bed- $505 (Standard Hospitals) 2. Critical Access Hospitals Per Bed- $380
- Psychiatric Hospitals Per Bed- $1700
Total Per Hospital- $505 per bed at 300 beds is $151,500 Total For All 1800 hospitals- $272.2 million
Hospital Accreditation Source 12 - Cost Per Bed- $30 to $167 a bed
Cost For 300 Bed Hospital- $9000 to $50,100 per hospital Total For All 1800 Hospitals- $16.2 million to $90.18 million
Clinics Source 12 - Cost Per Clinic- $6,000 per year
- Cost for 10,000 clinics- $60 million a year
Total For Licensing and Accreditation- $348.4 million to $422.38 million
Section 7: Technology And IT Systems
Hospitals Source 13
- Average IT system cost per hospital as of 2021 was $8.4 million 2. 2024 estimation- $10 million per hospital
- For All Hospitals- $18 Billion per year
Clinics Source 14 - Average IT system cost per employee- $2,000
- Number of users per clinic- 10
- Total Cost Per Clinic- $20,000 per year
- Cost for 10,000 Clinics- $200 million dollars per year
Total Technology And IT Systems Cost- $18.2 Billion per year Section 8: Advertising And Community Outreach
Hospitals Source 15 - Cost Per Hospital- $4.3 million to $11.2 million
- Cost For 1800 Hospitals- $7.74 Billion to $20.16 Billion
Clinics Source 16 - Cost Per Clinics- $7,200 to $60,000 per year
- Cost for 10,000 Clinics- $72 million to $600 million
Total Advertising And Community Outreach Cost- $8.812 Billion to $20.76 Billion Section 9: Building Maintenance And Renovation
Hospitals Source 17 - Cost Per Hospital- $50,000 to $1,000,000 a year
- Cost For 1,800 Hospitals- $90 million to $1.8 Billion
Clinics Source 18 - Cost Per Clinic- $20,000 to $50,000 a year
- Cost for 10,000 Clinics- $200 million to $500 million
Total Building Maintenance And Renovation Cost- $290 million to $2.3 Billion
Conclusion
Streamlined Healthcare: Replaces Medicare and Medicaid with a government-run system for
essential care
Cost Savings: Estimated at $1 to $1.2 trillion in annual taxpayer savings
Private Sector Relief: Frees private healthcare to focus on people that can afford private healthcare, thereby reducing the demand on the private healthcare system, allowing it to run as a business, not a charity.
Rapid Expansion: Expands capacity by acquiring hospitals and clinics that are in the red, ensuring stability in the healthcare system and preventing health deserts
Infrastructure Funding: Redirects savings to modern U.S. infrastructure, supporting roads, electric grid, etc.