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March 09, 2004

Fake Market Propaganda for HMOs

Markets can do better than the government in delivering services. Markets are more efficient. Markets save consumers money. Markets in government services save taxpayers money.

It's a lie of course, as the new Medicare proposal proves, since HMOs had to be bribed with tens of billions of dollars to deliver the same services that the government does more cheaply.

As this NY Times story details:

A new study by Mathematica Policy Research Inc. says that the Medicare law gives health maintenance organizations 7 percent more, on average, than the per capita spending for traditional Medicare.

The government has "pretty much given up on the argument that the H.M.O.'s save money," said Lori Achman, a research analyst at Mathematica, an independent research center.

HMOs can then use that excess money to give slightly better services or charge lower fees than regular Medicare-- just so market ideologists can claim that the market does a better job than a universal government run system.

But it's a lie.

Around the globe, the US private health care system is the most inefficient in the world, gobbling up a far higher percentage of our GDP with worse results for longevity, health care coverage, infant mortality rates and many other measures of health in the developed world.

Making Medicare look like the rest of that private health care system-- with multiple insurance companies, extra paperwork, and corporate subsidies draining the system of resources-- is a recipe for more waste and less health care.

If private HMOs get 7% more than regular Medicare services, that's 7 percent that should be cut from the corporate HMOs and transferred to improve the prescription health benefit for all seniors.

Posted by Nathan at March 9, 2004 04:03 AM