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  1. #1
    ^He pronks, too! Magic Poriferan's Avatar
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    Question Why is Medicare so expensive?

    People in the media love to talk about how much Medicare is costing the USA in a hundred different ways, and they also love talking about the grave threat it poses to the economy. Comparatively little time is actually spent examining why it's so expensive. When I do hear ideas thrown out there, they tend to be vague and immediately dubious.

    It doesn't take much effort to find information that discounts some common ideas. So little effort, you can find it on Wikipedia. Here are some things to consider.



    Health care costs are rising across the board, but the cost of insurance has risen dramatically for families and employers as well as the federal government. In fact, since 1970 the per-capita cost of private coverage has grown roughly one percentage point faster each year than the per-capita cost of Medicare. Since the late 1990s, Medicare has performed especially well relative to private insurers. Over the next decade, Medicare’s per capita spending is projected to grow at a rate of 2.5 percent each year, compared to private insurance’s 4.8 percent.
    In other words, government health care is cheaper than private insurance. Getting more Medicare recipients private coverage would not appear to be a solution to the problem. It could at least superficially appear to cost lest may directly taking it out of the government's expenses, but the cost will impact the country never the less. In fact, I suspect with people paying more out of pocket for more expensive services, many currently covered individuals would stop receiving coverage but ultimately seek treatment at emergency rooms which is even more expensive.



    Here we see the interesting fact that contrary to popular belief the aging population is not causing an inevitable cataclysm. It's a relatively small share of the projected expenses. Most of the expenses are due to those mysterious cost excesses.

    To bring the two above charts together, compare the USA to other developed countries. Canada, the UK, and Japan, just to name a few, have more generous health that covers the entire populations of their states, but none of them have a looming health-care related fiscal crisis. And just for an interesting rundown, see this link.

    The USA has the highest per capita health care costs, the highest cost of health care as a percentage of GDP, the highest cost of health care as a percentage of government revenue, and yet has a government that covers health care costs the least.

    So the Medicare problem seems neither to be the result of government inefficiency nor is it the inevitable result of social development. There are plenty of countries with very health care involved governments not deeply worried about the future of health care expenses.

    So, it comes to the title of this thread. Why is Medicare so expensive?
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  2. #2
    Mojibake sprinkles's Avatar
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    Well. I can only speculate, but my belief is that the cost of Medicare is not from medical expenses, but from bureaucratic red tape.

    It is my belief that they are so concerned about the right people getting coverage and giving nobody free rides that they actually pay out a lot to the processing system itself.

    It costs money to have people sit there and look over claims and then tell you you can't have something.

    Edit: also health care is overly expensive here to begin with.

  3. #3
    Mojibake sprinkles's Avatar
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    Everybody “knows” that government agencies are more efficient than private health insurance at delivering medical benefits and services. After all, Medicare’s administrative costs, at roughly 2 percent of the cost of benefits, are lower than those of private insurance. In the first presidential debate, President Obama claimed that “every study has shown that Medicare has lower administrative costs than private insurance does.”

    Not so fast, Mr. President. Comparisons between Medicare and private insurance are misleading.

    Let’s unpack the facts. The administrative costs of Medicare are usually calculated as a percentage of Medicare’s total costs. The cost of administering the program is compared with benefits paid. Presented in this fashion, the administrative costs are indeed relatively low.

    But as health-care economist Robert Book explains, “Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency.” In other words, Medicare spends a lot of money on benefits, and these expenditures make its administrative costs look small in comparison. When administrative costs are viewed on a per-beneficiary basis, as in Book’s evaluation, and not as a percentage of total costs, Medicare’s administrative costs are seen to be slightly higher than those of private insurance, even though in private insurance these costs include money spent on non-administrative functions such as marketing.
    Estimates of Medicare’s administrative costs also exclude the costs borne by health providers rather than the government. Medicare is governed by tens of thousands of pages of rules, regulations, and guidelines. Doctors, hospitals, home-health agencies, and nursing homes must, under threat of civil and criminal penalties, comply with this vast, mind-numbing, and complex regulatory regime. While more research is needed on the extent of these costs, a groundbreaking study by PricewaterhouseCoopers in 2001 found that for every hour of care delivered to a “typical” Medicare hospital patient, hospital officials spent roughly a half-hour complying with Medicare paperwork. Not one dime of these costs shows up in the Medicare budget, and in Congress and elsewhere these costs are routinely ignored.

    Even so, Medicare’s administration — a flawed claims-paying machine– is plagued by tens of billions of dollars annually in waste, fraud, and abuse. As Jeffrey Anderson explained in The Weekly Standard, Medicare’s level of waste and fraud simply has no analogue in private health insurance. The Government Accountability Office has estimated that Medicare loses a staggering $48 billion a year through fraudulent or improper payments. Merrill Matthews points out that, whereas Medicare may be losing 10 to 15 percent in fraud, the rate for private insurers has been estimated to be only 1 to 1.5 percent.
    http://www.nationalreview.com/articl...robert-moffit#

  4. #4
    Senior Member INTP's Avatar
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    #1 thing wrong with usa: cry about how expensive it is to save lives, but freely waste all the money there is(and borrow from other countries) so that you can kill people in other countries.

    Thats a definition of evil in my books and claiming to do such a thing in the name of god is how satan is described to work in the bible..
    "Where wisdom reigns, there is no conflict between thinking and feeling."
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  5. #5
    resonance entropie's Avatar
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    Quote Originally Posted by INTP View Post
    #1 thing wrong with usa: cry about how expensive it is to save lives, but freely waste all the money there is(and borrow from other countries) so that you can kill people in other countries.

    Thats a definition of evil in my books and claiming to do such a thing in the name of god is how satan is described to work in the bible..
    Thats a bit polemic and you know that. Why are you even hanging out here, if you think those people are all satans ?
    [URL]https://www.youtube.com/watch?v=tEBvftJUwDw&t=0s[/URL]

  6. #6
    Senior Member INTP's Avatar
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    Quote Originally Posted by entropie View Post
    Thats a bit polemic and you know that. Why are you even hanging out here, if you think those people are all satans ?
    Its about the people who run the country and manipulate some of the people to not see anything wrong about this. I do know that there are many people who see whats wrong in not helping fellow men and killing people in a far away country..
    "Where wisdom reigns, there is no conflict between thinking and feeling."
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  7. #7
    resonance entropie's Avatar
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    Quote Originally Posted by INTP View Post
    Its about the people who run the country and manipulate some of the people to not see anything wrong about this. I do know that there are many people who see whats wrong in not helping fellow men and killing people in a far away country..
    I am just saying. I mean most americans prolly already suffer hard from the intellectual superiority of europeans, I mean we could just show a little pity...ähhh.. consideration.

    Regarding medcare I've thought that may be the whole model so far was build on earning money for the health industry so far in the States. That means there are different levels of treatment coming with different buying power of the customers. We have health car in my country and here its different. Although there are a select few who receive special treatment (the upper 10,000) the majority of people receive the same health care. Its just measured by how much you need according to your illness. Of course that doesnt really function and poor people slip thru that system as well at some point but what I want to say is that: when you have a health industry who was build on earning money - and having that thought in the back of their heads -, they wont offer care easily. So the state cant just introduce healthcare and have people pay for it and things are all fluffy and nice now, they need to find regulations or standars for the health service as well. Cause otherwise this will just turn into another big business which will get perverted at some point
    [URL]https://www.youtube.com/watch?v=tEBvftJUwDw&t=0s[/URL]

  8. #8
    Striving for balance Little Linguist's Avatar
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    It seems incongruous that the western democracy that spends the most on healthcare seems to get the least out of it for its citizens. That probably applies to Medicare as well.

  9. #9
    Mojibake sprinkles's Avatar
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    Quote Originally Posted by Little Linguist View Post
    It seems incongruous that the western democracy that spends the most on healthcare seems to get the least out of it for its citizens. That probably applies to Medicare as well.
    It's the "Get paid and dodge having to pay" mentality that many have.

    It amazes me that there can be health care fraud. I mean, you are either sick or not, what's to be fraudulent about?? Except for the fact that the doctors are in on the game too. They want to get their paper.

  10. #10
    resonance entropie's Avatar
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    Quote Originally Posted by Little Linguist View Post
    It seems incongruous that the western democracy that spends the most on healthcare seems to get the least out of it for its citizens. That probably applies to Medicare as well.
    This will be for ever so cause you are working with people and they are inherently evil (no idealist).

    The states have to understand again that they shouldnt work as 'investors' or 'big spenders and rescuers', they have to understand again that they are regulators and the keepers of order. When they now invest more in social security, without creating a competitive market in that field beforehand, there will be again only few people to profit from that.

    In Germany there are health insurance companies, who get the collected money from the state, when they are able to gain the citizen as customer. Thats basically the money management in this whole chain, the mere hospitals dont care which health insurance company pays them. That way you strip the health care of direct customer contact and the desire for greed in making money is lowered.

    Its a long shot tho away from being a perfect system, but its an idea for a start.
    [URL]https://www.youtube.com/watch?v=tEBvftJUwDw&t=0s[/URL]

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