Advocates of government-run health care are always telling us that administrative costs are somehow lower for Medicare than for private insurance. But they never explain precisely how Medicare manages to operate on such miraculously low admin costs. Scott Gottlieb provides the answer in the WSJ:
It passes costs for that on to the broader health-care system by backing up its rules with the threat of costly civil and even criminal sanctions. Providers and medical product developers spend hundreds of millions of dollars on systems, personnel and paperwork to ensure compliance with Medicare’s sticky morass of regulations – tasks made more expensive by the fuzziness of the program’s regulations and the arbitrary way they are enforced.
In other words, Medicare achieves its “lower” admin costs utilizing the classic bureaucratic tactic of cost-shifting. In reality, Medicare’s true admin costs are higher that those of the private health care industry. But Medicare can use the power of the federal government to force someone else (providers and patients) to pay them.
Post a Comment