Medicare: A Poor Model for a National Health Care System

Harry Cain’s Health Affairs post about Medicare should be required reading for anyone naïve enough to believe there’s any real difference between single-payer health care and socialized medicine. The essence of socialized medicine is not, as single-payer advocates would have it, in the nominal “ownership? of the providers, but rather in the idea that central government planning is somehow superior to the operation of the market. The Medicare program demonstrates the folly of that idea. Here is Cain’s crucial passage:

Medicare laws and regulations now number some 120,000 pages, making the IRS code look simple … The complexity and unintelligibility of the program were highlighted when the Congress passed the Medicare Modernization Act in 2003. Section 904 of that massive law requires the secretary of health and human services to make periodic reports to Congress to identify inconsistencies and conflicts among the Medicare laws that Congress has passed and to recommend ways out of the problems created thereby.

In other words, in their effort to dictate every nuance of an incredibly complex system, our masters in Washington have created a labyrinthine nightmare of conflicting priorities and incentives. Every federal regulation creates three problems that must be corrected by new regulations which themselves create even more difficulties. Even something as seemingly straightforward as cost control cannot be managed from on high:

Whenever Congress does pass payment reductions, their impact goes far beyond Medicare’s finances. They typically result in either some cost shifting to the private sector (as in hospitals) or a reduction of service availability (doctors refusing to take Medicare patients), or many providers’ going out of business (where did all those home health agencies go?) …

It doesn’t matter that Medicare doesn’t “own? the hospitals or “employ? the physicians. It effectively controls the health care delivery system. Single-payer health care, in its practical effects, is nothing more than socialized medicine, and Medicare demonstrates that it is a very bad idea.

Comments 4

  1. Todd Schwarz wrote:

    Left unsaid by Mr. Cain and his fan is that those 120,000 pages of regulation include many pages of guidlines, definitions, and licensing standards that, if not developed by Medicare for public consumption, would need to be developed by all commercial health insurers. How many pages would that be?

    Posted 26 Mar 2007 at 4:01 pm
  2. Catron wrote:

    So, let me get this straight: You believe that this mountain of bureaucratic red tape has been created as a kind of public service? Or is it just the foothills that our masters in D.C. have benevolently piled up for us?

    Has it ever occurred to you that the “need” for such guidelines, definitions, etc. has been created by the bureaucrats in the first place?

    Posted 26 Mar 2007 at 7:49 pm
  3. Joe Kane wrote:

    What are you smoking? Come out of your dream world and face reality. Medicare is merely a non-profit insurance while the doctors are a free enterprise system with their fee for service.
    You and Mr. Cain talk in misleading abstractions. He states that the for profit insurance comapanies look to cost containment and/or quality enhancement. Ha! Their cost containment is to find ways to deny payments to patients (See NY Times front page March 26,2007) And their “enhancement” is directed toward their bottom line, not quality of health. Have youe forgotten the fight over a “Patients Bill of Rights”?
    Just two companies, Cigna andAetna paid their CEOs $48 million in salaires and bonuses. Think how much haealth carel that could buy for patients
    You overlook the fact that Medicare’s cost ratio for non-medical administration is only 2%, compared to the wasteful HMOs of 20% to 30%.
    Joe Kane – Long Beach, NY

    Posted 27 Mar 2007 at 12:07 pm
  4. Catron wrote:

    Your admin cost figures are off. The actual numbers are 5% for Medicare and 8% for private insurance. And, if we eliminate the competition by implementing some sort of single-payer system, the government admin costs would more than likely go up, much as they have in education.

    Posted 27 Mar 2007 at 2:32 pm

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