Federal Gestapo Services ask good citizens to report any emails about health insurance reform that seem "fishy" to flag@whitehouse.gov

[luckytxn 2,264]

One of the favorite arguments of the government health care crowd is the supposed Medicare low overhead argument – i.e. Medicare is more efficient than private insurance because its overhead is so much lower than private administrative costs.

It goes like this:

But the administration of Medicare is a miracle of low overhead and a model, despite all the fraud and abuse, of what government can do right. Three percent of Medicare’s premiums go for administrative costs. By contrast, 10 to 20 percent of private-insurance premiums go for administrative costs. Roll that figure around on your tongue. When you swallow and digest it, you’ll understand that any hope of significantly reducing health-care costs depends on a public option.

Right now, the Medicare average is 3% and private insurance averages 12%. But Tom Bevan points out, some of that difference is an apples and oranges comparison:

But here’s the catch: because Medicare is devoted to serving a population that is elderly, and therefore in need of greater levels of medical care, it generates significantly higher expenditures than private insurance plans, thus making administrative costs smaller as a percentage of total costs. This creates the appearance that Medicare is a model of administrative efficiency. What Jon Alter sees as a “miracle” is really just a statistical sleight of hand.

Furthermore, Book notes that private insurers have a number of additional expenditures which fall into the category of “administrative costs” (like state health insurance premium taxes of 2-4%, marketing costs, etc) that Medicare does not have, further inflating the apparent differences in cost.

However, when you make an apples to apples comparison, Medicare comes out much worse than private insurance:

But, as you might expect, when you compare administrative costs on a per-person basis, Medicare is dramatically less efficient than private insurance plans. As you can see here, between 2001-2005, Medicare’s administrative costs on a per-person basis were 24.8% higher, on average, than private insurers.

So, contrary to claims of Alter, Krugman, and President Obama, moving tens of millions of Americans into a government run health care option won’t generate any costs savings through lower administrative costs. Just the opposite.

Make sure you click through and check out the real Medicare administrative costs as compared to private industry.

Then there’s waste fraud and abuse. Did you happen to catch that little hand wave at “fraud and abuse” in the first quote touting Medicare’s efficiency? What, pray tell, is one of the primary jobs of an administive system? Would you imagine it to be the elimination of fraud and abuse – or said another way, to ensure that the company pays legitimate claims and avoids fraudulent and unnecessary payments?

How efficient is a system which is awash in both fraud and abuse? And, without profit, what incentive do they have to eliminate it?

John Stossel takes that part of the “Medicare efficiency” myth apart:

But there’s a bigger point – the connection between “low” administrative costs and staggeringly HIGH levels of fraud and waste. As Michael Cannon at the Cato Institute and Regina Herzlinger at Harvard Business School have pointed out, much of the 10 to 20 percent of private insurance administrative costs goes to preventing fraud. Private insurers, you see, care about whether or not they lose money. Medicare, with its unlimited claim on the public purse, does not. It’s only taxpayer money, after all.

The results are predictable, but breathtaking nonetheless: an estimated $68 billion (with a B) in outright Medicare fraud every year (About $3 billion in Miami-Dade county ALONE.) On top of that, according to well-respected Dartmouth researchers, roughly a third of Medicare’s total $400 billion annual spending goes to procedures which were medically unnecessary.

That’s, on average, 68 billion every year. Imagine a private insurance company surviving with loss figures like that. But as Stossel points out, without an incentive to eliminate fraud and abuse, it continues year after year after year, with politicians and Medicare administrators tut-tutting but never really doing anything about it.

That is the reality of Medicare’s efficiency. It is also the probable model any future health care insurance run by the government. Efficiency is an illusion brought about by a statistical sleight of hand and ignoring the systemic waste, fraud and abuse of Medicare.

~McQ

Link

http://www.qando.net/?p=3362

[GaryC 7]

Oh well, this discussion is moot anyway. Health care reform isn't going to pass. So let the left wing nuts rant all they want. Now that the public is paying attention the support for this mess has fallen and will continue to fall.

[Mr. Big Dog 10,747]

Oh well, this discussion is moot anyway. Health care reform isn't going to pass. So let the left wing nuts rant all they want. Now that the public is paying attention the support for this mess has fallen and will continue to fall.

Yes, and Obama isn't going to win the primaries, let alone the general election. Your crystal ball is bust, Gary, get a refund.

[luckytxn 2,264]

Or just keep trying to bamboozle the koolaid drinking sheep from the truth as usual.

Truth? You wish to talk about the truth? Man, I thought I'd never see this day.

According to the latest annual report of the Medicare board of trustees (these reports are required by law), Medicare spent $431.5 billion dollars in 2007. Of this amount, $6.3 billion was administrative expenditures (or overhead). If we do the math, we determine that Medicare’s overhead was 1.5 percent of its expenditures. Other data presented in the trustees report indicate Medicare’s overhead was about 2 percent throughout this decade, about 2 percent during the 1990s, and about 3 percent in the 1980s.

During the last three or four decades, the comparable figure for health insurance companies has been 20 percent while the comparable figure for self-insured firms has been about 10 percent. I think it is safe to say all reasonable people would agree that 2 percent is “lower” than 20 percent and 10 percent.

Even if you didn’t know these figures, your common sense tells you Medicare’s overhead costs have to be lower than the insurance industry’s. Medicare spends little or nothing on a variety of administrative activities that insurance companies spend substantial sums of money on, including:

* marketing;

* underwriting (which means doing the research necessary to determine applicants’ health histories and whether to insure them and if so at what price);

* making routine use of “utilization review” (aka telling doctors how to practice medicine);

* restricting patients’ choice of provider (it costs money to assemble “networks” of providers that include some providers and exclude others);

* lobbying;

* financing costly salaries and perks for executives; and

* financing profits.

(I consider profit to be a subset of administrative costs, others don’t. Insurance companies typically allocate 3 to 5 percent of their revenues or expenditures to profit.)

Among experts who publish in peer-reviewed journals, the 2-percent figure for Medicare is widely (probably universally) accepted. I offer two examples of expert opinion from the conservative side of the health care reform debate: the Lewin Group, and a coalition of organizations and individuals that signed an open letter to Congress in 1999.

The Lewin Group is a consulting firm which is on record criticizing single-payer proponents. It often makes unjustifiably favorable assumptions about the cost-cutting abilities of health insurance companies. It was purchased by United Health Group last year. It uses the 2-percent figure to estimate Medicare’s overhead costs and the overhead costs of Medicare-like systems (cf the Lewin Group’s reports for the states of California and Colorado).

In 1999, a coalition of conservative and middle-of-the road groups and individuals signed an open letter to Congress begging Congress to raise Medicare’s administrative spending level to the level “found in the private sector” so that Medicare would be better equipped to function like a managed care insurance company. The coalition included the Heritage Foundation, the former Health Insurance Association of America (the trade group that represented the non-HMO wing of the health insurance industry), the American Enterprise Institute, the Concord Coalition, and Wellpoint Health Networks.

This coalition stated that Medicare’s overhead was less than 2 percent. Here is how they put it: “The latest report of the Medicare trustees points out that HCFA’s administrative expenses represented only 1 percent of the outlays of the Hospital Insurance trust fund [which finances Part A] and less than 2 percent of the Supplementary Medical Insurance trust fund [which at that time financed Part B]” (Heritage Foundation et al., “Open letter to Congress and the executive: Crisis facing HCFA and millions of Americans,” Health Affairs 1999;18(1):8-10, 8). Obviously, the average of these two trust funds comes to less than 2 percent.

Must not have read the articles and links I posted.

I will keep posting a few articles more.

May take a bit as there are so many articles to choose from debunking the Socialist lies.

Well, you can post anything you want to. Until you can show where the private insurance industry is delivering health care more more efficiently than any government in the developed world, they won't mean much. Alas, have you contacted your Congressman yet to ask him to support the Weiner amendment to eliminate the socialist government run scheme that has become known as Medicare? It's out there, urge them to support it.

My Congressman is Ron Paul. How do you think he will vote?

[one...two...tree 2,762]

Oh well, this discussion is moot anyway. Health care reform isn't going to pass. So let the left wing nuts rant all they want. Now that the public is paying attention the support for this mess has fallen and will continue to fall.

Yes, and Obama isn't going to win the primaries, let alone the general election. Your crystal ball is bust, Gary, get a refund.

[luckytxn 2,264]

This is like shooting Socialists in the barrel. Too easy.

Medicare has lower “reported” costs. Truth or Fiction?

Jul 2nd, 2009 | By Dawn | Category: Featured Writers, Hot Topics

By: Richard G. Fessler, MD, PhD

Are the administrative costs of single-payer health care systems less than current private insurance system in the United States?

One claim made by advocates of single-payer health care systems is that private insurance is less “efficient” because of high administrative costs incurred by having “multiple” insurance companies, and the costs of competitive marketing, satellite services, and the need to make a profit! For example, Woolhandler et al have reported that the administrative cost of health care in the US accounts for 31% of health care dollars, but only 16% in Canada.1 The Congressional Research Service estimates the cost of administrative overhead at 2% of total program costs for Medicare, 9.5% for private insurance, and 11.9% for HMOs.2 However, such estimates are misleading.

First, one has to ask which services are considered “administrative” and which are “patient care?” Often these services are categorized differently in single-payer systems and private insurance, resulting in “apples to oranges” comparisons.3

Second, the cost “efficiency” of a system is influenced by more than just overhead and administrative costs. Benefit (such as length of time waiting for health care delivery, variety of options, freedom of choice in health care, and access to advanced technologies) must also be considered.

Third, governments can shift cost to physicians and taxpayers in a manner, which private insurers cannot. For example, the American Medical Association reported that physicians spend an average of 23% of their patient care time on administrative functions for Medicare claims.4 (Beyond the “up-front” cost here, consider the additional savings if each physician could see 23 % more patients!)

Finally, the true cost of government run health care delivery is often hidden in complex bureaucratic reporting and tracking systems. Government initiated auditing expenses of health care services, for example, are not included as “health care cost”, but as part of the budget of other public agencies. Similarly, the cost of collecting taxes or lobbying for additional funding are not included in the cost of government run health care overhead expenses, whereas collecting premiums and marketing are included in the overhead of private insurers.

The bottom line, however, is that a “public” insurer and a “private” insurer ultimately perform the same services. There are costs associated with both them, which must be equally accounted for. Concealing them in bureaucratic pigeon-holes, although expedient when one wants to applaud government sponsored single-payer systems, does not magically make them go away.

In a report estimating the true cost of public programs, including hidden costs such as taxes, Mark Litow found that Medicare and Medicaid spent 26.9 cents as overhead for every dollar of benefit paid, compared to 16.2 cents spent by private insurers.5 Thus, he reported that government run programs had 66% more overhead cost than private insurers per dollar of care delivered (see figure).

Implicit among the single-payer advocates is the belief that a system in which one organization pays all the bills, is inherently better than one in which multiple organizations compete against each other. One way to analyze whether this is true or not, is to examine the cost to individuals using the only “single-payer” model available in the United States, Medicare, compared to the cost to individuals with private insurance. Most patients with Medicare find that many services (such as drugs, rehabilitation, and preventative medicine) are not covered by their policies, thus leaving them at risk for potentially thousands of dollars of out of pocket expense. To cover this potentially catastrophic risk, a high percentage of Medicare patients also pay for supplemental private insurance. On the average, Medicare recipients pay $5,000 more per year “out of pocket” on their health care, than non-Medicare patients.6 These results revealed by Mark Litow coupled with the increased out of pocket expenses paid by Medicare recipients argue strongly, therefore, that Government run, single-payer health care are MORE expensive, not less expensive, than private insurance.

1 Woolhandler, S., Campbell, T., Himmelstein, D.U., “Costs of Health Care Administration in the United States and Canada”, New England Journal of Medicine, 349:768-775, 2003.

2 “Administrative Costs: Medicare Compared to Private Insurance and HMOs, 1993”, figure 3.29, table 3.29, prepared by the Congressional Research Service, “Medicare and Health Care Chartbook”, Ways and Means Committee, U.S. House of Representatives.

3 Goodman, John C., Musgrave, Gerald L., Herrick, Devon M., Lives at Risk, Rowman and Littlefield Publishers, Inc, New York, 2004, pp 106.

4 American Medical Association Center for Health Policy Research, “The Administrative Burden of Health Insurance on Physicians”, SMS Report 3, no.2, 1989.

5 Litow, Mark, “Rhetoric vs Realtiy: Comparing Public and Private Health Care Administrative Costs”, The Technical Committee of the Council Committee for Affordable Health Insurance (CAHI), March, 1994.

6 U.S. Department of Health and Human Services, Medicare and Medicaid Statistical Supplement, 1999,” Health Care Financial Review, Publication No. 03417, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, November 1999, figure 19, p.37.

For additional information about the financial viability of the Medicare program, please visit: http://www.healthandsharing.com/18/healthblogdetail

Link

http://smartgirlnation.com/2009/07/02/medi...uth-or-fiction/

[one...two...tree 2,762]

[Ban Hammer 13,334]

I'm willing to bet luckytxn doesn't have a college degree.

which has zero to do with the conversation at hand.

[Mr. Big Dog 10,747]

Okay, so let's talk about administrative cost advantages based on study rather than opinion.

Administrative Efficiencies

Perhaps the most obvious advantage of public insurance is that it is inexpensive to administer. The public Medicare plan’s administrative overhead costs (in the range of 3 percent) are well below the overhead costs of large companies that are self-insured (5 to 10 percent of premiums), companies in the small group market (25 to 27 percent of premiums), and individual insurance (40 percent of premiums).15

These administrative spending numbers have been challenged on the grounds that they exclude some aspects of Medicare’s administrative costs, such as the expenses of collecting Medicare premiums and payroll taxes, and because Medicare’s larger average claims because of its older enrollees make its administrative costs look smaller relative to private plan costs than they really are. However, the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage.16 This is a near perfect “apples to apples” comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.

(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.)17

The CBO study suggests that even in the context of basic insurance reforms, such as guaranteed issue and renewability, private plans’ administrative costs are higher than the administrative costs of public insurance. The experience of private plans within FEHBP carries the same conclusion. Under FEHBP, the administrative costs of Preferred Provider Organizations (PPOs) average 7 percent, not counting the costs of federal agencies to administer enrollment of employees. Health Maintenance Organizations (HMOs) participating in FEHBP have administrative costs of 10 to 12 percent.18

In international perspective, the United States spends nearly six times as much per capita on health care administration as the average for Organization for Economic Cooperation and Development (OECD) nations. Nearly all of this discrepancy is due to the sales, marketing, and underwriting activities of our highly fragmented framework of private insurance, with its diverse billing and review practices.19 Indeed, according to research by the Commonwealth Fund, the United States could save up to $46 billion a year if it spent what other countries with mixed public-private insurance systems, such as Germany, spend on insurers’ administrative costs.20

15 Cathy Schoen, et al., “Building Blocks for Reform: Achieving Universal Coverage With Private And Public Group Health Insurance,” Health Affairs, Volume 27, No. 3, May/June 2008, 647.

16 Congressional Budget Office, “Designing a Premium Support System for Medicare,” November 2006, 12.

17 Kevin Freking, “Medicare Insurers’ Profits Exceed Expectations,” Associated Press, December 11, 2008.

18 Mark Merlis, “The Federal Employees Health Benefits Program: Program Design, Recent Performance and Implications for Medicare Reform,” Henry J. Kaiser Foundation, May 2003, 7.

19 Carlos Andrisano, et al., “Accounting for the Cost of Health Care in the United States,” McKinsey Global Institute, January 2007, http://www.mckinsey.com/mgi/reports/pdfs/h..._fullreport.pdf, 70.

20 The Commonwealth Fund Commission on a High Performance Health System, “Slowing the Growth of U.S. Health Care Expenditures: What Are the Options?” January 2007, 4.

[luckytxn 2,264]

I'm willing to bet luckytxn doesn't have a college degree.

which has zero to do with the conversation at hand.

True but we know why they resort to base behavior.

[luckytxn 2,264]

Okay, so let's talk about administrative cost advantages based on study rather than opinion.

Administrative Efficiencies

Perhaps the most obvious advantage of public insurance is that it is inexpensive to administer. The public Medicare plan’s administrative overhead costs (in the range of 3 percent) are well below the overhead costs of large companies that are self-insured (5 to 10 percent of premiums), companies in the small group market (25 to 27 percent of premiums), and individual insurance (40 percent of premiums).15

These administrative spending numbers have been challenged on the grounds that they exclude some aspects of Medicare’s administrative costs, such as the expenses of collecting Medicare premiums and payroll taxes, and because Medicare’s larger average claims because of its older enrollees make its administrative costs look smaller relative to private plan costs than they really are. However, the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage.16 This is a near perfect “apples to apples” comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.

(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.)17

The CBO study suggests that even in the context of basic insurance reforms, such as guaranteed issue and renewability, private plans’ administrative costs are higher than the administrative costs of public insurance. The experience of private plans within FEHBP carries the same conclusion. Under FEHBP, the administrative costs of Preferred Provider Organizations (PPOs) average 7 percent, not counting the costs of federal agencies to administer enrollment of employees. Health Maintenance Organizations (HMOs) participating in FEHBP have administrative costs of 10 to 12 percent.18

In international perspective, the United States spends nearly six times as much per capita on health care administration as the average for Organization for Economic Cooperation and Development (OECD) nations. Nearly all of this discrepancy is due to the sales, marketing, and underwriting activities of our highly fragmented framework of private insurance, with its diverse billing and review practices.19 Indeed, according to research by the Commonwealth Fund, the United States could save up to $46 billion a year if it spent what other countries with mixed public-private insurance systems, such as Germany, spend on insurers’ administrative costs.20

15 Cathy Schoen, et al., “Building Blocks for Reform: Achieving Universal Coverage With Private And Public Group Health Insurance,” Health Affairs, Volume 27, No. 3, May/June 2008, 647.

16 Congressional Budget Office, “Designing a Premium Support System for Medicare,” November 2006, 12.

17 Kevin Freking, “Medicare Insurers’ Profits Exceed Expectations,” Associated Press, December 11, 2008.

18 Mark Merlis, “The Federal Employees Health Benefits Program: Program Design, Recent Performance and Implications for Medicare Reform,” Henry J. Kaiser Foundation, May 2003, 7.

19 Carlos Andrisano, et al., “Accounting for the Cost of Health Care in the United States,” McKinsey Global Institute, January 2007, http://www.mckinsey.com/mgi/reports/pdfs/h..._fullreport.pdf, 70.

20 The Commonwealth Fund Commission on a High Performance Health System, “Slowing the Growth of U.S. Health Care Expenditures: What Are the Options?” January 2007, 4.

Lets do that. I will try to find the link to the article where they explain how certain medicare costs are not factored in(Like real estate and shared employee costs, etc) and why they are not. Be right back.

[one...two...tree 2,762]

I'm willing to bet luckytxn doesn't have a college degree.

which has zero to do with the conversation at hand.

True but we know why they resort to base behavior.

Just an observation from your Rainman obsession over the word, 'socialist.' I don't think you know what it means if it hit you over the head.

[GaryC 7]

Oh well, this discussion is moot anyway. Health care reform isn't going to pass. So let the left wing nuts rant all they want. Now that the public is paying attention the support for this mess has fallen and will continue to fall.

Yes, and Obama isn't going to win the primaries, let alone the general election. Your crystal ball is bust, Gary, get a refund.

Oh really? I would say your in denial.

SCRAP HEALTH CARE REFORM IF IT ADDS TO DEFICIT,

U.S. VOTERS TELL QUINNIPIAC UNIVERSITY NATIONAL POLL;

VOTERS DISAPPROVE OF OBAMA’S HANDLING OF HEALTH CARE

American voters, by a 55 – 35 percent margin, are more worried that Congress will spend too much money and add to the deficit than it will not act to overhaul the health care system, according to a Quinnipiac University national poll released today. By a similar 57 – 37 percent margin, voters say health care reform should be dropped if it adds “significantly” to the deficit.

By a 72 – 21 percent margin, voters do not believe that President Barack Obama will keep his promise to overhaul the health care system without adding to the deficit, the independent Quinnipiac (KWIN-uh-pe-ack) University national poll finds.

American voters disapprove 52 – 39 percent of the way President Obama is handling health care, down from 46 – 42 percent approval July 1, with 60 – 34 percent disapproval from independent voters. Voters say 59 – 36 percent that Congress should not pass health care reform if only Democratic members support it.

Voters are split 39 – 41 percent on whether the President’s health care plan will improve or hurt the quality of health care in the nation, with 14 percent saying it won’t make a difference.

Only 21 percent of voters say the plan will improve the quality of care they receive, while 36 percent say it will hurt their quality of care and 39 percent say it will make no difference.

“President Barack Obama and Democratic leaders in Congress appear to be losing the public relations war over their plan to revamp the nation’s health care system,” said Peter A. Brown, assistant director of the Quinnipiac University Polling Institute.

“Americans are more willing to scrap a health care overhaul than they are to increase the deficit in order to produce such legislation. That’s a bad omen for the White House and Congressional leadership as they try to sell their plan to the country this month before the vote counting gets serious on Capitol Hill in September.”

http://www.quinnipiac.edu/images/polling/us/us08052009.doc

[luckytxn 2,264]

Here is another unreported cost of medicare.

Medicare’s (true) Administrative Costs

July 27, 2006 in Medicaid/Medicare

A common justification for Medicare is that the public health insurance system has an overhead cost which is about 2% of claims, while the private sector has administrative costs between 20%-25% of claims. This tells us that Medicare is the best system for America…right?

Merrill Mathew’s of the Council for Affordable Health Insurance (CAFI) summarizes the findings of Mark Litow’s paper “Medicare’s Hidden Administrative Costs.” Litow finds that taking into account extra legal costs from Medicare adjudication and CMS salaries, the administrative cost ratio increases to 5.2%.

Private Insurance on average has administrative costs of 16.7% (varying between 30% for individual policies to 12.5% for large group policies). Yet these figures are inflated. If we exclude taxes and profits, as well as sales commissions, then the total administrative costs decrease to 8.9% overall and 8.0% for large group policies. I do not agree that commissions should be deducted from this this figure but profits and taxes certainly should. Medicare does not pay taxes and does not make a profit so any fair comparison should exclude these items. Further, tax revenue from insurance companies adds to the public’s coffers; profits should be seen as a cost of capital.

Even with Litow’s manipulation of the numbers, Medicare seems like a better deal. Let’s see why:

Economies of scale: There are large economies of scale in the insurance business; however ,large insurance companies can certainly replicate the majority of the scale economies Medicare enjoys.

Cost of Capital: Medicare incorrectly counts its cost of capital as 0. The true cost would take into account the direct cost of hiring IRS workers to collect the taxes which pay for Medicare as well as taking into account the distortionary effects of income taxation on workers labor supply decisions. For the private sector, the costs of capital is transparent: it is simply the interest rate.

Demographics: Medicare serves the elderly population and thus has a high cost per enrollee. In 2003, the average medical cost for Medicare was $6,600 per person per year, while the same figure for private insurance was $2,700. Thus, if public and private health insurance had the same administrative cost per person, Medicare would still be seen as ‘more efficient’ since Medicare’s administrative cost ratio would be less than half the size of the private insurance’s cost ratio.

Finally, we need to realize that administrative costs are like people: some are good, and some are bad. What if a private insurance company raised its administrative costs by 1% , but was able to reduce fraudulent claims by 10% and reduce the premium charged to customers by 8%. This is an example of how an increase in the administrative cost ratio can add value. It is likely that private companies try to avoid paying for unnecessary medical treatment and are more vigilant to detect fraudulent claims then Medicare.

link

http://healthcare-economist.com/2006/07/27...strative-costs/

[Mr. Big Dog 10,747]

Or just keep trying to bamboozle the koolaid drinking sheep from the truth as usual.

Truth? You wish to talk about the truth? Man, I thought I'd never see this day.

According to the latest annual report of the Medicare board of trustees (these reports are required by law), Medicare spent $431.5 billion dollars in 2007. Of this amount, $6.3 billion was administrative expenditures (or overhead). If we do the math, we determine that Medicare’s overhead was 1.5 percent of its expenditures. Other data presented in the trustees report indicate Medicare’s overhead was about 2 percent throughout this decade, about 2 percent during the 1990s, and about 3 percent in the 1980s.

During the last three or four decades, the comparable figure for health insurance companies has been 20 percent while the comparable figure for self-insured firms has been about 10 percent. I think it is safe to say all reasonable people would agree that 2 percent is “lower” than 20 percent and 10 percent.

Even if you didn’t know these figures, your common sense tells you Medicare’s overhead costs have to be lower than the insurance industry’s. Medicare spends little or nothing on a variety of administrative activities that insurance companies spend substantial sums of money on, including:

* marketing;

* underwriting (which means doing the research necessary to determine applicants’ health histories and whether to insure them and if so at what price);

* making routine use of “utilization review” (aka telling doctors how to practice medicine);

* restricting patients’ choice of provider (it costs money to assemble “networks” of providers that include some providers and exclude others);

* lobbying;

* financing costly salaries and perks for executives; and

* financing profits.

(I consider profit to be a subset of administrative costs, others don’t. Insurance companies typically allocate 3 to 5 percent of their revenues or expenditures to profit.)

Among experts who publish in peer-reviewed journals, the 2-percent figure for Medicare is widely (probably universally) accepted. I offer two examples of expert opinion from the conservative side of the health care reform debate: the Lewin Group, and a coalition of organizations and individuals that signed an open letter to Congress in 1999.

The Lewin Group is a consulting firm which is on record criticizing single-payer proponents. It often makes unjustifiably favorable assumptions about the cost-cutting abilities of health insurance companies. It was purchased by United Health Group last year. It uses the 2-percent figure to estimate Medicare’s overhead costs and the overhead costs of Medicare-like systems (cf the Lewin Group’s reports for the states of California and Colorado).

In 1999, a coalition of conservative and middle-of-the road groups and individuals signed an open letter to Congress begging Congress to raise Medicare’s administrative spending level to the level “found in the private sector” so that Medicare would be better equipped to function like a managed care insurance company. The coalition included the Heritage Foundation, the former Health Insurance Association of America (the trade group that represented the non-HMO wing of the health insurance industry), the American Enterprise Institute, the Concord Coalition, and Wellpoint Health Networks.

This coalition stated that Medicare’s overhead was less than 2 percent. Here is how they put it: “The latest report of the Medicare trustees points out that HCFA’s administrative expenses represented only 1 percent of the outlays of the Hospital Insurance trust fund [which finances Part A] and less than 2 percent of the Supplementary Medical Insurance trust fund [which at that time financed Part B]” (Heritage Foundation et al., “Open letter to Congress and the executive: Crisis facing HCFA and millions of Americans,” Health Affairs 1999;18(1):8-10, 8). Obviously, the average of these two trust funds comes to less than 2 percent.

Must not have read the articles and links I posted.

I will keep posting a few articles more.

May take a bit as there are so many articles to choose from debunking the Socialist lies.

Well, you can post anything you want to. Until you can show where the private insurance industry is delivering health care more more efficiently than any government in the developed world, they won't mean much. Alas, have you contacted your Congressman yet to ask him to support the Weiner amendment to eliminate the socialist government run scheme that has become known as Medicare? It's out there, urge them to support it.

My Congressman is Ron Paul. How do you think he will vote?

So, Ron Paul supports the elimination of Medicare and the other existing government run socialist health insurance scams?