Why is it that Medicare is more efficient than private insurance?

Question

Medicare has exceeded "the private sector in controlling the rate of health spending."

http://content.healthaffairs.org/cgi/content/full/22/2/230

Additionally, it has more efficient administrative structure and provides the same care for less money.

http://www.ssc.wisc.edu/~scholz/Teaching_441/Social%20Insurance.pdf


So, why is this?

The absence of billionaire CEO's?
The power of buying in bulk?
A focus on providing services rather than solely on profits?

And given all these benefits, why aren't we using it to cover everyone?

Answer 1

This is probably because Medicare (and Medicaid) are government insurance programs. This programs basically have unilateral contracts with hospitals/health systems to provide services. With regular managed care organizations (insurance companies) there is a lot of administrative time and energy used to negotiate the specifications of a managed care contract. With Medicare if a hospital doesn't like what the government is paying for services they don't have to take those patients - however, this is not advantageous because Medicare is a major payer with a lot of beneficiaries throughout the nation.

Answer 2

First, medicare doesn't cover everything, so it isn't necessarily more efficient. But in the areas that it is more efficient, that is due mainly to trade barriers. For the most part, you can only get health insurance from companies in your own state. This severely limits competition, keeping prices high. Also, inefficiencies that develop over time take forever for government to correct. So if five years from now, there is a problem with medicare, it will be a campaign issue for the next ten years, before anything at all is done to fix it. In the private sector, with truly free markets, inefficiencies are pretty quickly ironed out.

Answer 3

they have the least overhead because it truly is non-earnings authorities application compared to for-earnings inner most plans which must have an excellent earnings for stockholders. even with the undeniable fact that, the Medicare compensation is likewise decrease than inner most pay direct. The affected individual will pay 20-30 % of the bill the picture of inner most pay. Medicare reimburses 30 days after declare is filed and the biggest element in its want is they don't deny claims till they're suspicious or fraudulent. the large problem is that the authorities plan does no longer have adequate money to live to inform the tale and may stumble on a thanks to get some earmarked money from yet another plan. It also does no longer cover adequate human beings. 40 million is about the decision who use Medicare. no longer each and every service will use Medicare and Medicaid mainly yet lower than the non-public organizations who've Medicare project, there are continually medical doctors who will settle for it. some plans are more effective than others. also, As Medicare reimburses companies for too little, companies ought to handle extra non-Medicare sufferers. The Medicare application ought to locate extra money to more effective reimburse companies. fortunately the Obama administration is analyze the thousands of thousands of $ of fraud perpetrated on this technique which replaced into handed over for years. it truly is complicated to supervise the entire u . s . for fraudulent claims and phony companies and companies. they ought to have interior of sight districts to post claims so there ought to nicely be extra oversight of claims.

Answer 4

ROFLMAO!
Don't they teach anything in schools these days?

You can't compare a private sector company and a government agency, it like comparing apples and orangutans.

Medicare fixes prices based on arbitrary numbers, not on costs or anything else in reality. They say, we will pay $20 for a checkup, no matter if it costs a doctor $50 to perform the service. A private industry can't do that. If it costs $50, then they have to pay $50. So it looks like Medicare is cheaper, but it is an imaginary number.

Medicare does not exist in reality, they base nothing on real costs. A private business must base its pricing and services on supply, demand, and cost of goods. If the private company goes over budget, they go out of business. If Medicare goes over budget (which it does every year) they just get Congress to give them more, even though that money does not exist. Why do you think we have 9 TRILLION dollars in debt!? Contrary to popular mythology, that did not pop up in the last 6 years, it has been building for almost a century. It is almost entirely due to massive social programs (Medicare, Welfare, Social Security, etc.) going BILLIONS of dollars over budget every year.

My God! If this is the level of education in the country, it is no wonder that 50% of the population votes for economic retards like Gore and Kerry.

Answer 5

because medicare and medicade make the doctors pay and insurance raises the cost for everyone. A medical insurance overhaul is what we need because a medicare switch will destroy the medical profession. this is one of the main reasons quebec is trying to succeed from canada. they cant take care of their people with national health care.

Answer 6

The insurance providers won't even entertain the thought of actually helping people in favor of profits.

Answer 7

No government program is as efficient as the private sector.
It seems as though Medicare is defrauded out of a billion dollars a year. (That's from memory, I may be a few million off, either way.)
Graft & Corruption hits every government program hard.

Answer 8

We all know socialism WORKS, and medicare more closely resembles the model.