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Health care CEO: 'Most people don't understand the basic economics' of health care

Scott Gamm
Reporter

A top health care CEO is sounding the alarm on “Medicare for All,” an idea gaining steam in political circles, including from newly-elected Rep. Alexandria Ocasio-Cortez (D-NY).

“Most people don’t understand the basics of health-care economics in the United States,” sad Steve Rusckowski, chairman & CEO Quest Diagnostics (DGX), in an interview with Yahoo Finance editor-in-chief Andy Serwer at the World Economic Forum in Davos, Switzerland, adding that the details of how “Medicare for All” would be funded have yet to be worked out.

“The majority of people get their health care from their employers, and the majority of healthcare costs are paid by employers and employees,” he said. “If you look at the $3.5 trillion spent on healthcare costs, that portion is actually funding the Medicare and Medicaid programs throughout this country.”

FILE - In this Thursday, Feb. 4, 2016, file photo, a medical researcher uses a monitor that shows the results of blood tests for various diseases. (AP Photo/Arnulfo Franco, File)

Rusckowski remained skeptical of a Medicare-for-all plan funded by corporations and employees. “I don’t think [corporations and employees] can afford to provide that access as described.”

In terms of how to control health care costs in the U.S., which Rusckowski said are approaching 20% of GDP, Rusckowski thinks more needs to be done to transform the way health care is delivered.

“About 5% of lives represent about 50% of health care costs,” he said, adding that the industry needs to spend time “upending” the cost curve.

Over the past 12 months, Quest Diagnostics shares have slipped 17.5%.

Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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