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Medicare is not a blank check. It's a standard check (see sibling comment on fee schedules), and each check tends to actually be quite low of an amount. The ma
by gen220 5y ago
Medicare is not a blank check. It's a standard check (see sibling comment on fee schedules), and each check tends to actually be quite low of an amount.
The magnitude of "standard" and "low" are both demonstrated by the fact that when private insurers negotiate pricing contracts (basically, a one-off fee schedule) with hospital groups, they express prices in terms of "medicare multiples".
For example, the insurer will pay up to 13x of what Medicare pays for an fMRI administered under non-emergent circumstances with medically-justifiable cause. Pretty much every multiple is >1x, many are far more than 10x.
And medicare is arguably more expensive to provide, since the probability of confounding issues from disability or age is higher than in the general insured population.
Medicare is very consistent with paying, especially in comparison to private insurance, but the a la carte fees are quite "low" by relatively-freer-market definitions (I say relatively, because the reality is that private insurers negotiating with hospital groups is the antithesis of a free market, in most conceivable dimensions).
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The main reason medical groups lobby against "medicare for all" is that they will lose lucrative "20xM" payouts from private insurers, and it's difficult to see how their ballooning administrative costs can survive on such a lean diet.
Of course, this line of thinking is deliberately ignorant of the thought that medicare fee schedules can be renegotiated to reflect the population of patients "medicare for all" would incorporate. But nobody's interested in thinking two turns ahead, let alone advancing the game state, when their pockets are nicely-lined on turn zero.
- briHass 5y agoAnother way to look at that is that Medicare is vastly underpaying for services, as the system is currently run. Basically, private insurers subsidize Medicare/Medicaid, and many providers either refuse to accept Medicare (as allowed by laws) or would go out of business without a sufficient private insurer base. So, private insurers aren't charities that aim to support 'lucrative' payouts either. The often-huge gulf between MC and private (as you said) means that costs would have to drop massively if we did MC4A. Who's going to tell hospitals/admins, and more importantly, doctors and nurses that they have to take a 30%+ paycut?
- gen220 5y agoThe difficulty is that "cost" has a layer of abstraction that you may not be considering. There are three acts in care. Act 1, you receive treatment and the hospital pays the nurses, doctors, and capital equipment. Act 2, the admin submits a claim and receives a quote from the insurer. Act 3, the insurer pays the admin. One of the reasons why a certain treatment plan is negotiated at 20x Medicare is that, 50% of the time, the private insurer rejects the claim (correctly or incorrectly), and the hospital group needs to maintain payroll for an admin whose entire job is to contest the rejection and win the ultimately agreed-upon rate. As you might guess, a large but difficult-to-quantify proportion of the quoted cost is this song and dance in Act 2. In Medicare, the distribution of Act 2's length is more predictable and smaller. Nobody addresses this elephant in the room, because it makes private insurers and hospital groups look bad, but it's where a lot of ballooning "costs" can be explained away.
- kansface 5y agoIs anyone actually making money as a Medicare provider? I thought the private carriers were heavily subsidizing it?
- gen220 5y agoIt depends on what you mean by "making money", but yes. Basically, the "expected value" of a private insurance payout is usually not too different from the "expected value" of a medicare payout. The sticker price of a private insurance payout is very high. The accounting department of providers love the sticker price, because they can carry them forward as payable liabilities, but a large proportion of private insurer payouts and patient deductibles are never realized. Stark contrast to medicare.