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May 06, 2003

Duh! Private Health Care Increases Costs

Well, it's nice to see the reality effecting the policy debate on health care. For years, it's been clear that the US's private health care system costs far more than the government-run systems in European countries, yet delivers less coverage and not as good long-term mortality results.

With Bush proposing all sorts of ways to hand over Medicare to his corporate buddies, a slight kink in the road has come up as analysts have noted the increased costs if that road is taken:

The Medicare Payment Advisory Commission, a nonpartisan federal advisory panel, recently had a study done comparing fees paid by Medicare and private health plans. Zachary Dyckman, the economist who did the study, collected data from 33 health plans of 31 million people.

In an interview today, Mr. Dyckman said he had found that "private health plan fees are about 15 percent higher than Medicare fees."

Paul B. Ginsburg, president of the Center for Studying Health System Change, a private group that monitors trends in health care markets around the country, found the same pattern, and he said it was becoming more prevalent.

"In most areas of the country payment rates for hospitals and physicians that are negotiated by private plans are higher than those paid by the Medicare fee-for-service program," Mr. Ginsburg said.

This may stop some of the worst privatization proposals in upcoming bills, but this won't stop other giveaways by the GOP to their insurance buddies on medical malpractice.

House Republican leaders said they had tentatively decided to combine their Medicare legislation with a separate bill limiting the damages that could be awarded in medical malpractice lawsuits.

The Congressional Budget Office estimated that the malpractice bill would save the federal government $14.9 billion over 10 years, mainly by reducing what Medicare and Medicaid spend on malpractice insurance premiums for doctors and hospitals.

Note the over ten years part-- ie. $1.5 billion per year or less than the cost of one-day of military spending.

But the insurance companies will be happy.

Posted by Nathan at May 6, 2003 09:22 AM

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