Saturday, October 12, 2013

National Socialized Healthcare Based on Medicare? Welcome to Hell

While Medicare is generally  looked upon favorably by your average American,  many liberals have voiced the opinion that Medicare should be the model for a National Single Payer; ie socialized medicine.

 In an earlier post I discussed The Real Cost of Medicare this included the fallacy that government administers Medicare is much cheaper than the private sector when it comes to administering their companies (20% vs 3%). The truth is the Federal government farms out the administration of most of Medicare (referred to Medicare Service Contracts) that are usually not counted in the official Administrative costs; Cigna is a major player in Administering Medicare Cigna Government Services Awarded Medicare Contract... The government "stated" administration costs only cover an annul report  assessing the financial health of the program,  while the private sector service contractors are responsible for processing claims and payments, call center services, clinician enrollment, and fraud investigation. So the truth is the Administration of Medicare are at least the same and probably more than private healthcare companies.Then you have to add to the equation that some where between 10 to 20% of Medicare funds are lost to fraud every year; that's $50 billion to $100 billion.

There is also the issue of the doctor fix; this is a $300 billion Medicare shortfall that the Democrats want hidden.   "In 1997, Congress created a new formula called the Sustainable Growth Rate, or SGR. Using Medicare spending in the 1990s as a baseline, the formula factored in overall economic growth to create the annual Medicare budget. The goal was to control Medicare spending by tethering it to the rest of the economy’s growth. And, for a few years, this worked fine; the equation pretty accurately predicted how much Medicare would cost. But, as health care costs outpaced the economy, it has stopped working, leaving the entitlement with a multi-billion-dollar shortfall." Doctor Fix FAQ.

Total Medicare spending is projected to increase from $523 billion in 2010 to $932 billion by 2020. From 2010 to 2030, Medicare enrollment is projected to increase from 47 million to 79 million, and the ratio of workers to enrollees is expected to decrease from 3.7 to 2.4  Medicare Statistics. 

So when one contemplates a Socialized Healthcare based on Medicare, there would be little chance of a private sector administration (a Socialized Healthcare system would be designed to eliminate the private sector), so expect the IRS will be tasked with the administration, something no government agency has any experience doing. All these issues are the result of some of the basic failures of socialism. First, you can not legislate market factors; the mere existence of a mandate rarely results in cost reductions. Second, the larger government grows the more corrupt it becomes. Medicare is now more corrupt than ever and the corruption is growing the more Medicare expands. The  primarily reason is due to doctors over billing for services as they try  to compensate for cut backs in reimbursement rates; it is estimated that in order for a Medicare doctor today  to make a modest $200,000 gross annually, they would have to see 35-40 patients a day for a year. If we continue in this direction will will experience the same level of healthcare they are experiencing in Britain where doctors  have started seeing patients via SKYPE. As the old saying says, the road to hell is paved with good intentions. Welcome to hell

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