Almost all discussions about Medicare reform ignore one key factor: Medicare utilization is roughly 50% higher than private health-insurance utilization, even after adjusting for age and medical conditions. In other words, given two patients with similar health-care needs--one a Medicare beneficiary over age 65, the other an individual under 65 who has private health insurance--the senior will use nearly 50% more care.Agreed.
Several factors help cause this substantial disparity. First and foremost is the lack of effective cost sharing. When people are insulated from the cost of a desirable product or service, they use more. Thus people who have comprehensive health coverage tend to use more care, and more expensive care--with no noticeable improvement in health outcomes--than those who have basic coverage or high deductibles.
In addition, Medicare's convoluted benefit structure encourages the purchase--either individually or through an employer--of various forms of supplemental insurance. Medicare covers roughly three-fourths of total costs, but about 85% of the Medicare population has expanded coverage with small to limited cost sharing. This additional cost insulation pushes seniors' out-of-pocket costs toward zero, thereby increasing overall utilization.
Friday, July 22, 2011
QOTD
Merrill Matthews and Mark Litow in the July 11th Wall Street Journal:
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5 comments:
The insurance companies and drug companies are costing sick people their lives and causing bankruptcies and poverty. Remove them from power by installing a single-payer system with health facilities located near public schools nationwide. The insurance companies and drug companies are more villainous than virtuous since they place profits before the health and well-being of people. That's the way it is.
Anony: Medicare and Medicaid ARE single payer systems--and yet utilization is rising much higher there than in the private sector. That, actually, is the way it is.
@Anonymous--how come medical schools are never asked to shoulder their fair share of the blame? If they would accept more students, we could have more doctors, and that right there would decrease wait times and increase access. Join me now in campaigning for less selective medical school admissions!
Medicare and Medicaid are insurance-company created and dominated systems that guarantee that insurance companies will continue to suck dry the resources of sick and healthy people. People pay 20% of their cash payments for 80% of their coverage and they must pay 80% of their cash outlay to private insurance companies for supplemental coverage to cover 20% of their total medical expenses. The system is rigged by and for the profits of insurance companies. There are some functions, e.g., defense, transportation, health care, that are best left to government and some things best left to private industry. Let's get them straight so we as a society can benefit from cost/effective and cost/efficient production and consumption functions.
Lame-R, I will gladly join you in increasing medical school admissions. Also, it would be a good idea to make medical schools tuition-free. Why should only wealthy people become doctors or why should less wealthy people have to graduate with half a million dollars of debt? Makes no sense. If medical school tuition were free, medical schools could enroll the best and brightest from whatever rung in society they came from. After they graduate, they could be required to provide some hours per day of care to special groups of people who need medical care, but can't afford to pay for it. Society would be happier and healthier with a healthy population. We would all benefit, just as we all benefit from an increasingly well-educated population. Let's get civilized and honest.
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