Great example of how the economics of socialized medicine don't add up: Medicare

shagdrum

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From Limbaugh's show on friday, the transcript of which can be found here...

RUSH: You know, yesterday during our discussion of health care, I was trying to remember where I had read that doctors are reimbursed, you know, not a full 100% on their billing in Medicare cases and I have heard from a number of doctors who have told me it's much worse than what I thought I knew. I want to read an e-mail from one just to give you a flavor of kind of e-mails I've been inundated with.

"Dear Rush,

I am a Medicare physician, unfortunately. We do not get reimbursed 81% of anything. The old method of pricing services was called "usual, customary, and reasonable." That was before Medicare. That concept of "usual, customary, and reasonable" is long gone. Nowadays we're simply told by Medicare what the fee is for sure any given service we either agree to participate in Medicare and take their price fix or not. Now, if you wanted to use a percentage comparison, you would have to figure out what a physician would charge a patient in the free market and compare that to the Medicare fee -- and I can tell you that number would be far lower than 81%. When I get the very rare patient who actually pays cash out of pocket for their cataract surgery, I charge them $2,500. Medicare pays me about $700 for a cataract surgery.

That's 28%, Rush -- and this is typical across all of medicine, not just cataract surgery. The Medicare fee schedule is not based on anything. It's pulled out of thin air. Worse, they have managed to create an internecine class warfare among doctors. They've pitted primary care against surgeons. Every time there is a call for increased payments by primary care, they maintain those increased payments have to be offset by cuts in payments to specialists and this has been going on for years. This inter-doctor battle plays right into the hands of the socialized medicine takeover as you can well imagine. Over the last 44 years of Medicare the private insurers have seen that the doctors just roll over and take Medicare payments, so the private plans have slowly decreased their payments down to the Medicare rates. If we want to see patients we have no choice but to accept these fee schedules. I can tell you anything you want to know about these topics if you need the inside information.

This doctor is from Texas.

It is worse than I thought, and of course they're ramming more and more people into Medicare -- and this is what Obama meant when he said he's going to put the squeeze on doctors. He's going to squeeze 'em even more in order keep their fees down, and then that's going to lead to, "Who's gonna want to go into the profession?" So it's all messed up out there. And, by the way, the government pays you when they're good and ready. There's not a reimbursement schedule that makes sense that they can be held to, and it's only going to get worse if the whole program is eventually nationalized and socialized because there's going to be nowhere else for anybody to go to get paid and you have to put up with whatever you have to put up with dealing with a bureaucracy.
 
Medicare and Medicaid are two of the biggest reasons (arguably THE biggest) for the inflated healthcare prices today.

The government arbitrarily sets reimbursement rates that do not reflect the laws of supply and demand but are much lower then what they should be (price fixing). This leads to an increase in price for everyone that is not on Medicare/Medicaid to make up the difference in price so that the business can stay solvent. The more people who are on Medicare/Medicaid the more the burden of making up the market cost of their healthcare is shifted to others. Eventually, large private insurers/insurance plans start to decrease their reimbursements to Medicare/Medicaid levels. So even more burden is placed on even fewer people; thus further magnifying the inflation of healthcare costs.

Obama is looking to expand Medicare (which would further drive up the price of health care). In addition, his "public insurance option" (part of his proposed healthcare overhaul) would be run like Medicare and have the same effect as Medicare/Medicaid in artificially driving up prices, but on a vastly larger scale. The economics don't add up.

There are also other government factors in the inflation of healthcare costs; like government mandates on coverage in insurance plans, mandatory emergency coverage of anyone regardless of ability to pay, excessive and frivolous lawsuits, excessive regulation adding to costs (especially in the area of FDA approval of new drugs), etc.

Our excessively inflated cost of healthcare is clearly due to government meddling, not to free enterprise and/or free market. What we need is less government meddling in the healthcare/insurance industry, not more.
 

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