As we progress through the budget and deficit debate Medicare will be in the forefront and one if the items most subject to political fear tactics. For example, there is an Op-Ed piece in today’s New York Times noting one of the values of Medicare is it’s low administrative costs. It is true Medicare administrative costs are about half that of private insurers. Part of the reason is that Medicare’s figures do not include many of the items included in the private sector. It’s not that the expenses don’t exist, they are just not part of the calculation, things like all the advertising CMS does.
However, the real issue is that Medicare does not invest in thorough claims or medical case management. Ask your doctor who pays with little effort and the answer will be Medicare. It may not pay as much as some private coverage, but it pays and pays with few questions asked. This point has been noted in at least two government studies I have read, one going back fifteen years.
Low administrative costs may sound as good as attacking waste and fraud, but the fact is that Medicare’s administrative costs and it’s efforts administering claims need to be raised…could that also means less waste and fraud?
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