Medicare
We have previously reported on Medicare’s unfunded liability and ways to reform Medicare. This is from J.D. Foster’s Medicare backgrounder for Heritage:
- The program has an unfunded liability of $85.6 trillion.
- The drug benefit alone (Part D) has an unfunded liability of $17.2 trillion – greater than that of Social Security.
- The average beneficiary receives a benefit of $10,460 a year, but pays premiums of only $1,212.
- The cash flow deficit in Medicare is being covered by general revenues, thus crowding out other spending programs: currently at $4,053 per beneficiary, the general revenue subsidy will grow to $6,067 by 2020.
Why is this being totally ignored on Capitol Hill?
Interesting, that there has been so much attention to reform of Social Security. The real problem is obviously Medicare.
In all of the hoopla about health reform in Washington, I don’t recall anyone saying that we need to slow the growth of Medicare.
The most important bullet for Congess is the last one. Medicare will progressively crowd out every other federal program.
Oh, look, another crisis! Let’s not let that one go to waste, either! Isn’t running a country fun?
A recent nationwide poll of physicians, published in the Annals of Internal Medicine, based on the AMA database revealed that 60% of physicians support a single payer national health insurance based on Medicare. Truth is that Medicare runs on a 2% overhead, and private insurance corporations use 10-30% of your health care dollars on administrative bureaucrats ($750 billion/year). So why continue the current government subsidized private insurance company and medicare part D fraud operating parallel to and within Medicare? Why not go to a single payer interstate health insurance based on Medicare which allows doctors and hospitals to remain private and autonomous, lowers premium costs and prescription costs via enlarging the risk and bidding pool, and finally allows marketplace capitalistic competition via revelation of medical and preventative outcomes among doctors and hospitals? Run it like the NIH or NCI, the two most successful and respected government research institutions in the world where doctors, and not insurance actuaries make decisions and analyze data. Clearly the 40 year experiment in communistic government supported financially ineffective and medically inefficient private companies has failed, time to go single payer, and allow doctors and hospitals to run and compete.
Congress isn’t ignoring the problem, check out two current bills with many supporters;
HR 676
S 703
I see nothing in the poll questions cited above that specifically ask about “single payer national health insurance based on Medicare.” This appears to be a tale that grows in the telling: http://www.pnhp.org/docsurvey/annals_physician_support.pdf
Instead, I see a couple of extremely general questions about “national health insurance.” It’s easy to picture a physician casting a non-binding vote for change in general, on the general feeling that “anything has to be an improvement.” Such a poll is meaningless, merely a collection of protest votes. Even so, 40% of respondents actually rejected the proposal.
There is so much wrong with Medicare (as well as some good things), and so many myths regarding administrative cost comparisons, etc., that it is hard to even get started with answering PNHC Doctor, who is clearly misinformed. However, what is most important is that Medicare is the primary reason we have a mess in health care financing today. The current system of Medicare materially underpays providers (demonstrated by studies time after time), is essentially price-setting, and causes cost shifting that is in every way an unauthorized tax that Congress doesn’t have to be responsible for. It is fraudulent, despicable, irresponsible, untenable, illegitimate, and immoral. Until transparency and fairness in PRICING of provider services/products is established (which means an ALL payer system where a given provider sets their prices, but has to charge all patients that same price no matter what combination of first and third party payers are involved, and no favored status discounts are allowed) you will never be able to plan for, model, project, or measure any other reform elements. There is too much fog on the landscape caused by price chaos. Fix it, and the system can start to achieve a true moderately free market status where consumers can bring back at least some semblance of equilibrium in supply versus demand.
The canard that Medicare has a 2 percent overhead has been extensively debunked in papers by Zycher, Litow, and Matthews. Estimates of 2 percent leave out a lot of functions like property management, oversight, fraud control, fee collection, and benefits determination that are carried on in parts of the government that are outside Medicare’s budget. Plus, Medicare does not pay taxes and none of the estimates includes the cost of the supplement policies that are needed to make Medicare act like real health insurance. Real estimates of all costs suggest, predictably, that Medicare has overhead that equals or exceeds overhead in private sector companies.
The more important issue is: Almost all the money that Medicare spends IS RAISED BY TAXES.
In general, studies show that the social cost of taxation is at least 25% of the amount collected.
Comparisons of administrative costs include the cost of marketing and the cost of collecting private sector premiums, but do not include the costs of tax collection.
We already have socialized medicine in this country, the VA Hospitals, Military Hospitals and prison medicine are socialized with government owned hospitals, formularies and government employed physicians and staff. Single payer interstate health insurance based on Medicare simply withdraws the massive government subsidies (Communistic) from private insurance company’s (Oligarchy) thereby forcing them into bankruptcy. Once the private insurance companies declare chapter 11, all USA citizens can be insured through Medicare. Single payer Medicare insurance would offer lower premiums to all individuals and businesses via the increased size of the risk pool. Physicians and hospitals would remain private. Money saved from the giant private insurance corporate bureaucracy would be applied to insure all Americans. With medical and preventative outcomes measured via a single integrated EMR software system, healthy capitalistic competition between Hospitals and physicians would exist for the first time in America. In addition, Medicare could use it’s size to bid down the price of drugs on its formulary to levels equal to that of what the rest of the world pays. Since big drug companies only spend a fraction of their income on R & D, there would be no actual decrease in innovation. In fact, the fat would be cut, and companies would spend more time on developing worthwhile drugs instead of redundant slightly altered chemicals to prolong patents on old blockbusters. The actuarial shareholder based health rationing currently employed by private health insurance companies would be replaced by free market competition and epidemiological evidence based health outcome data which formulates clinical guidelines.
If either one of Blue Shield Blue Cross, Aetna, Cigna, KP, or Humana corps could offer better rates of morbidity (sickness) and lower rates of mortality (death) at decreased costs via their current health care ‘maintenence’ rationing criteria, then we could choose one of these private companies to be the single payer. However, alas, the Emperor has no clothes, private insurance Co’s cure rates are lower and their death rates are higher than Medicare Ins aged matched control populations, therefore, we go with Medicare.