We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
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Saturday, June 27. 2009
Making statistically valid generalizations about 1/6th of the
So, let’s get real.
Tom Bevan, founder-editor of daily must-read RealClearPolitics, today writes “Busting the Administrative Cost Benefit Myth,” that a government-run plan would save spending by cutting administrative costs, based on a Heritage Foundation paper that “Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance.” In short, because each Medicare claim is for a much higher amount than each private insurance claim, the percent of the dollar amount of total claims for mostly fixed administrative costs is lower in Medicare. If considered, instead, on administrative cost per number of claims processed, Medicare’s admin costs are higher than in private insurance.
The former head of Medicare and Medicaid and former US assistant secretary of health recently, similarly, took on this administrative cost myth in the Wall Street Journal, asking and answering “Is Government Health Insurance Cheap?”
Seeking to debunk this authoritative column, the pro-government-run health care blog Think Progress actually proves the column’s point.
Medicare Advantage plans screen networks of proven providers, attracted partly through better reimbursement, comprehensively cover medical costs, including prevention and access to nurse hotlines and such Vs the high deductibles and co-pays and lack of intensive preventive services in Medicare, actively combat frauds in billing and procedures, and must market Vs automatic enrollment in Medicare in order to collect Social Security, aided by other government agencies. If ObamaCare is to be as comprehensive, preventive and patient-supportive, fraud-resistant, and reach out to the uninsured as touted, its administrative costs will approximate Medicare Advantage’s.
Of note here is that Medicare Advantage’s 11% admin costs is near the average of private health plans’ 12% over the past 40-years. Some cost components have declined, due to automated claim-processing, increased fraud prevention, and reduced marketing commissions, while others have increased, particularly in preventive care measures. That’s called increased bang for the buck.
The journal of Annals of Internal Medicine lays the core fact on the examination table: “The Obama Administration's Options for Health Care Cost Control: Hope vs. Reality.”
In other words, impose reimbursements to providers that are too low to cover costs of top-quality and access, ration, fail to encourage the best and brightest to practice medicine, reduce incentives for innovation, and stifle adaptivity to changing conditions and efficiency opportunities.