Medicare and the Myth of Lower Admin Costs
Medicare BS August 8th, 2007
The advocates of socialized medicine, particularly those pushing “Medicare for All,” peddle the myth that administrative costs are somehow lower for the government than for private enterprise. A classic example of such nonsense can be found at this blog, which features the following excerpt from a letter to the editor:
I find it highly disturbing that part of my business costs are not allocated for health but instead are used to pay for an executive vice president … so she can write articles dismissing single-payer … In contrast, fees I must pay per employee for Medicare do not lead to any such waste of executive expense.
The naiveté of this passage is breathtaking. Does the letter’s author believe that Medicare is run by the tooth fairy? In point of fact, huge amounts of money go to the “executives” who run the Medicare program.
For starters, no less than 4,100 people are directly employed by the Centers for Medicare & Medicaid Services (CMS). However, these bureaucrats don’t manage the actual programs. Instead, CMS outsources the management of its health care programs to fiscal intermediaries.
And what sort of “intermediary” do you think CMS hires to administer Medicare and Medicaid? Well, they hire insurance companies. In other words, Medicare is actually administered by the same companies that are constantly condemned by the socialized medicine crowd.
Thus, CMS is a bureaucratic layer added to the top of the private insurance system, which means that it adds rather than reduces adminstrative costs. Being a typical government agency, however, CMS has erected a series of obstacles to prevent researchers from divining its true overhead.
Nonetheless, valiant efforts have been made to penetrate these bureaucratic defenses. One such study can be found here and a shorter discussion of Medicare’s true costs can be found here.
The bottom line is this: the true administrative costs of government-run health care aren’t lower than those of the private insurance industry. This is just another myth promulgated by the evangelists of socialized medicine.
healthcarebs.com
Medicare's Hidden Costs
cahi.org |
