Government Health Care Efficiency: Paying More for Oxygen, Penis Pumps, and Canes

|

Some proponents of a single payer health insurance system, such as Physicians for a National Health Program (PNHP), point to Medicare as an example of what they want. To wit:

…the U.S. already has a successful program that covers more than forty million people, gives free choice of doctors and hospitals, and has only three percent administrative expense. It is Medicare, and an expanded and improved Medicare for All (Medicare 2.0) program would cover everyone comprehensively within our current expenditures and eliminate the need for private insurance. This is the direction we must go.

Why? Because…

Such a single payer plan would make possible a set of mechanisms, including public budgeting and investment planning, that would allow us to address the real sources of cost increases and allow us to rationalize our health care investments. The drivers of high cost such as administrative waste, deterioration of our primary care infrastructure, excessive prices, and use of non-beneficial or detrimental high-tech services and products could all be addressed within such a rationalized system.

A New York Times article today reports that perhaps government health care bureaucracies aren't quite as efficient as the folks at PNHP fondly believe. As the Times reports:

Medicare spends billions of dollars each year on products and services that are available at far lower prices from retail pharmacies and online stores, according to an analysis of federal data by The New York Times. The government agency has paid above-market costs for dozens of items, a comparison of Medicare figures with retail catalogs finds.

The Times cites examples such as oxygen equipment, penis pumps (who knew?), and even walking canes. And let's not forget that Medicare has only now managed to get its fee for service improper payment rate down from over 10 percent in 2004 to 4.3 percent in 2007.

Rationalized system indeed!

NEXT: Does Free Association Limit Free Speech?

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. This proves that even after paying too much for the BOSTON PENUS PUMP…Medicare still has a small (3%) admin fee.

    The reason HEALTHCARE SUCKs in this country is b-cause of :

    1. HIGH ADMINISTRATIVE COSTS

    2. private companies are profit driven and will routinely deny as much coverage as they can wiggle out of

    3. The nature of Peope is MEAN-SPIRITED. Not that many mother theresas in the world.

    Insurance SUCKS
    Have you ever looked at your declaration page? Have u every looked @ ur policy???

    Page one says you have 100% in-network coverage. Pages 2 thru 2000 goes into DETAIL of all that is NOT covered.

  2. There are so many ways that a single payer health insurance system favored by groups such as Physicians for a National Health Program needs to be deconstructed, but lets start with the 3% administrative costs.
    This number is used a lot and is only off by a factor of 10. Due to the beauty of government fund accounting there are a few items missing in the calculation such as staff pensions, healthcare, capital costs, indirect overhead, depreciation and insurance.
    The last review I saw was done by Cato and put the number at 29% of administrative costs and that did not include all of the above mentioned items.
    Got to get back to work but please discuss, especially the part about using the term rationalizing (by whose standards) twice in one paragraph.

  3. The drivers of high cost such as administrative waste, deterioration of our primary care infrastructure, excessive prices, and use of non-beneficial or detrimental high-tech services and products could all be addressed within such a rationalized system.

    The two greatest drivers of health care prices are the intentionally limited supply of physicians and Medicare’s high reimbursement rates.

    The Physicians for a National Health Program don’t mention the first (I wonder why…) and propose that making the second the only way to buy health care will lower health care costs.

    I don’t know if they’re trying to be funny, but they’re not.

  4. Dear Alice:
    In regards to the mean health care plans putting profit over people. How come the for profit Health Plans that I deal with (which are a lot) spend about 15% of premiums on administrative costs and profit but the not-for-profit (caring and loving) health plans spend 20+% of premiums just on administrative costs?

  5. Medicare’s problem is the same problem as the Bush Administration’s prescription drug program. Private companies can and do lobby for special treatment. As Herbert Hoover put it, “the trouble with capitalism is capitalists. They’re too goddamn greedy.”

  6. There’s a whole lot of rationalization going on.

  7. Art,

    The snarky answer would be “How much does it cost to say ‘Coverage denied, sucker!’?”

    Gah! I feel like Dan T just walked over my grave.

  8. Way back in the Stone Age, before LBJ got us into socialized medicine, most people could afford medical care.

  9. Has anyone every deconstructed the cost of, say, an appendectomy in the U.S. vs. one of the countries that supposedly do it cheaper?
    Where are the expense differences: malpractice, doctor salary, nurse and aides salaries, cost of the hospital building, real estate taxes on the building, etc. etc.?
    Once we know where the differences are, we can begin to make rational decisions about why the cost differences exist and what is required to change those costs.

    Re administrative costs: they have to be huge in our current system because paper has to be shuffled for every little item covered. Suppose physicals, shots, routine tests weren’t covered and didn’t have to be justified to an insurance company in the first place?

  10. The reason for increasing health care costs is supply and demand: too many people pursuing too little available care.

    The solution is to lower prices by lowering demand. For example, anyone making less than $30,000 per year could be denied access to any form of medical care. Demand for medical services would decrease and an economically non-productive segment of society could gradually be phased out.

  11. I’m paying for some limpdicked motherfucker* to get a penis pump?!?! Fuck socialized medicine. Including medicare and medicaid.

    * True confession, I’ve always wanted to use that phrase in a grammatically correct manner. I’ll sleep well tonight.

  12. Next time you see one of those commercials with a geriatric doing wheelies on one of them “Rascals,” with the voiceover saying “We’ll do the medicare paperwork for you; we can provide one of these carts at no cost TO YOU,” you can pretty much determine why: a gazillion percent markup, which is a drop in the bucket as far as government (taxpayer) money goes.

  13. Such a single payer plan would make possible a set of mechanisms, including public budgeting and investment planning, that would allow us to address the real sources of cost increases

    Oh my god, this is funny on so many levels, I don’t know where to start. Let’s see here, with centralized planning, budgeting and price controls, only then can we know the true cost of goods. Uh huh. Let me guess, they’re going to implement this system around five year plans.

  14. “The drivers of high cost such as administrative waste, deterioration of our primary care infrastructure, excessive prices, and use of non-beneficial or detrimental high-tech services and products could all be addressed within such a rationalized system.”

    Make that (rationed system). Ultimately, that’s the only way a single payer system will reduce costs. Medicare is one thing that is largely responsible for driving up costs. When people feel they get something for free, they use more of it. The AMA has brought about a shortage of doctors to raise prices and Medicare, Medicaid, and large insurance companies that pay for routine medical care have created overuse of services, creating a shortage of medical care which drives up prices. Also, doctors know they can charge more with the government and large insurance companies picking up the bill. Prices would come down if people shopped around for their routine care which would be the case if insurance companies only paid for catastrophic care and the poor had vouchers to pay for their routine medical care.

  15. “We’ll do the medicare paperwork for you; we can provide one of these carts at no cost TO YOU,”

    Pisses me off every time I see it. Truth in advertising would mandate the models in those ads be 100+ lbs overweight. That’s a real world observation.

  16. 3. The nature of Peope is MEAN-SPIRITED.

    Mmm, that’s not what my liberal friends told me. They told me that People are inherently good, and our evil, paternalistic aggressive culture makes them mean- in spite of their nature.

  17. joe, where you be at, joe?

  18. Dear Everyone:

    When I go to the Dr…there are 50 people involved.

    1. The receptionist
    2. The nurse
    3. The doctor
    4. The insurance/billing specialist (DR. side)
    5. The mailroom guy @ the insurance
    6. The mailroom guy that takes my claim form to claims.
    7. The 1st claims guy.
    8. The 2nd claims guy.
    9. The adjudicator.
    10. The one that determines eligibility
    11. The adjustor that will routinely deny the claim.
    .
    .
    .
    Medicaid ONLY verifies eligibility. It pretty much doesn’t require the ICD-9 codes since they will pretty much PAY for everything.

    JUST PAY MY Damn CLAIM

  19. and the poor had vouchers to pay for their routine medical care.

    Funny, I don’t recall professional health care as being one of the unalieable rights mentioned in the Declaration of Independence. I missed that part in the Bill of Rights as well. I guess I’ll have to read those documents again.

  20. “Funny, I don’t recall professional health care as being one of the unalieable rights mentioned in the Declaration of Independence. I missed that part in the Bill of Rights as well. I guess I’ll have to read those documents again.”

    You’re exactly right, J sub D, but do you think we will ever get rid of the Welfare State? As long as we have a Welfare State, it’s preferable to improve the system by creating competition and bringing down prices instead of putting all of us on a disastrous socialized medicine system.

  21. I know an executive at one of the companies that makes those electric scooters for the disabled and old folks. 75% of their sales are reimbursed by medicare, so their business wouldn’t exist without it. Yet, they are not profitable. Why? Every time a frail old person falls out of the scooter, they hire a shyster lawyer to claim design flaw. The settlement costs, liability insurance, etc. are about to drive them under. Prediction: soon all such scooters will be made offshore only and sold here by marketing firms with few assets to seize if hit with huge judgements.

  22. They’ll pry my penis pump from my cold, de…uh…never mind.

  23. Jamie Kelly,

    I’ve learned to avoid these threads.

    I come here to argue with smart people with a differennt point of view, and threads about health care have proven to bee too fact-averse to serve usefully even as a scratching post to sharpen my arguments or understanding of the issue.

  24. Wrong Paul

    Please are naturally MEAN spirited.

    Read about obedience to authority

    http://www.cultsock.ndirect.co.uk/MUHome/cshtml/socinf/obed.html

    People are MEAN

    Look at the Homos getting married Bit. And look at the immigration controversy.
    And look at the abortion controversy.

    If you have the entire population vote on screwing any minority…the ENTIRE population WILL!

  25. If I made a BILL or a PROPOSITION to deny featured butt-plugs to one arm Armenian Dwarfs…I’ll assure u that I will get a bunch of people that don’t know how to mind their own business come out of the wood work to support me.

    People that never even met a one arm Armenian Dwarf would support the measure.

    What we need in this country is the
    It’s non of ur business Ammendment

  26. RJ:
    >>Medicare is one thing that is largely responsible for driving up costs. When people feel they get something for free, they use more of it. The AMA has brought about a shortage of doctors to raise prices and Medicare, Medicaid, and large insurance companies that pay for routine medical care have created overuse of services, creating a shortage of medical care which drives up prices.
    “it’s preferable to improve the system by creating competition and bringing down prices instead of putting all of us on a disastrous socialized medicine system.”

  27. I disagree Dan7000

    Insurance companies will NOT compete. They will behave like alogopolies and work together…This is exactly what they do now.

    What we have NOW is the competition working 2-gether to make sure u pay HIGH premiums and get LOW coverage and u have NO where 2 GO….Accept of course, Medicaid.

  28. sorry – my comment was messed up – here it is again:

    RJ says:
    Medicare is one thing that is largely responsible for driving up costs. When people feel they get something for free, they use more of it. The AMA has brought about a shortage of doctors to raise prices and Medicare, Medicaid, and large insurance companies that pay for routine medical care have created overuse of services, creating a shortage of medical care which drives up prices.

    1.
    Do you have a cite for the wild supposition that a “shortage of doctors” or “overuse of services” is responsible for “driving up prices”?

    Every economic analysis on the subject concludes that American healthcare is so expensive because it is so inefficient, NOT because there is a shortage of supply or “overconsumption”, although some have concluded that unnecessary tests and treatments are a small part of the avoidable costs.

    Only whackos who think that Doctors are overpaid (they’re not) subscribe to the conspiracy theory that somehow the AMA is responsible for driving up costs. I am no fan of the AMA, but the fact is, Doctor salaries are a tiny slice of the $3.1 trillion healthcare pie. Most healthcare dollars are spent on hospitals, equipment, supplies, technicians, staff and administration, not doctor salaries.

    Thus, increasing the supply of doctors, while it wouldn’t hurt anything and would probably help overall health outcomes, would not decrease costs in any significant way.

    2.
    You blame “big insurance companies” along with Medicaid and medicare. So what is your solution, if you agree that insurance companies are part of the problem but you apparently disagree with single-payer, which is the only solution which gets rid of insurance companies?

    3.
    it’s preferable to improve the system by creating competition and bringing down prices instead of putting all of us on a disastrous socialized medicine system.

    disastrous? Like the one in France? Canada? Most people familiar with those systems would call them a huge improvement rather than “disastrous”.

  29. All you armchair economists out there:

    If you’ve actually taken econ, you’ll remember that markets maximize one thing. What is that thing? Wealth. Markets maximize wealth. (Sometimes they call it social utility or social welfare, but whatever it’s called, it’s always measured in dollars.)

    Yes, you are totally right that if we increase free market competition in healthcare, we will maximize wealth in society. Probably by ensuring that more people get incredibly rich and really sick people die quicker rather than expending all that cash trying to prolong their lives.

    This is what the healthcare debate is about. If you want to maximize wealth, then just kill off the sick people and be done with it. I’d rather maximize a combination of health and wealth, and markets are not designed to do that. Only one thing is designed to maximize actual social welfare: democracy.

    I say, let democracy run our healthcare, not markets. Improve democracy if you want to better maximize social welfare, but don’t expect markets to maximize anything but money.

  30. It’s not mine, baby…

  31. Only one thing is designed to maximize actual social welfare: democracy.

    You owe me a new monitor.

  32. People must be inherently bad, because J sub D’s comments make me wish he gets laid off from his job and then gets cancer (in that order).

  33. Only one thing is designed to maximize actual social welfare: democracy.

    Wow, you learn something new every day.

  34. dan7000
    I’m sorry to have to do this, but..

    DEMAND KURVE!

    is that the appropriate time guys? Can I drink now?

  35. The problem in a nutshell, is that healthcare consumers have been divorced from healthcare producers. Patients don’t pay for medical needs, their insurance companies do. The third party payment system is screwing up the market.

    The employer provided insurance system is encouraged by the Fed, by allowing employers to deduct insurance costs. What started out as sensible catastrophic insurance plans evolved into healthcare smorgasbords. Removing those employer tax incentives is a no-win solution, but we can give the same tax incentives to individuals. Allow medical savings accounts, full deductability for all healthcare expenses, etc. Limit the Federal government’s involvement in healthcare to a reduced scope FDA, and leave the rest to the states.

    Get healthcare back into some semblance of a market. We can worry about how “free” that market is later.

  36. As my husband’s best payer, Medicare bought me a Mercedes SL55. If the Aetna, UHC and the Blues paid as well, I would be able to get the car I really want.

    When he and I discuss healthcare, he always tells me that the system is screwy but if it changes, I’ll need to get a less flashy car.

    I am ready to sacrifice, but it won’t be easy. (If I get as drunk as last night and leave it in a parking lot in a seedy area of town again, I may make the sacrifice sooner.)

  37. You’re exactly right, J sub D, but do you think we will ever get rid of the Welfare State? As long as we have a Welfare State, it’s preferable to improve the system by creating competition and bringing down prices instead of putting all of us on a disastrous socialized medicine system.

    No, we’ll never get rid of the welfare state. But I do dream of cutting it back. Some successes have been achieved. It’s agreed that stopping national health care should be the #1 priority of freedom minded people in this debate.

  38. People must be inherently bad, because J sub D’s comments make me wish he gets laid off from his job and then gets cancer (in that order).

    Max Roswell,
    Which ones? Those about fat scooter riders or the ones about health care is not a right? I like to know what works.

    Although I’m a inherently bad person, I wish illness on nobody. That must be one of those undesirable side effects of compassion, huh?

  39. Hey, wait a damned minute !!! I’m on Medicare and I didn’t get a fuckin’ penis pump !! WTF is going on. My wife is in a rage and I still gotta sleep with her. Where’s the 900, oops, 800 number to Medicare?

  40. Although I’m a inherently bad person, I wish illness on nobody.

    However, I have wished a painful execution for the midget, tin pot dictator of North Korea. Does that count?

  41. Max, I like J Sub and I know a whole lot of people who caught the Big C lately. Something in the air I ‘spose. Not fun. Some died. Some beat it. All suffered. Not something I’d wish on anyone. Except maybe….nah, just kidding.

    Now, I know the point you are making but there is no inherent, God Given Right to medical care.

    And, I repeat, way back in the Stone Age most people, like my parents, could afford medical care. Sometimes mom had to make payments for a while, but she managed to get my tonsils out when that surgery was needed. Without Medi-Cal, welfare, insurance, or largess.

    No it wasn’t a perfect system, yes some people got clobbered with catastrophic illnesses and lost their homes or went bankrupt because they couldn’t pay the hospital bill. But that is the key, they got the service, they just couldn’t pay for it.

    And speaking of cancer, City of Hope would treat your cancer for free, surviving on donations alone. Don’t know if they still do that or not.

    The big thing that has changed is that the federal government has gotten involved in health care in a very big way.

    And for those who don’t know, we already have socialized medicine, it’s just a bastardized version of it that allows some private care to co-exist with military health care, welfare, Medicare, Medi-Cal (state free medical care), and the tax supported county hospitals.

  42. Wrong Paul

    Please are naturally MEAN spirited.

    Do we have an ESL situation here?

    Uhm, first off, that would be “Wrong Liberals”. If you re-read my original post, I was relaying what my liberal friends told me. I happen to believe that humans are naturally violent, and that has to be taught out of them. But “mean spirited”? I’m beginning to feel that I’m having a discussion with a nine-year-old.

    Alice, reading your… sorry ‘ur’ posts is a bit like reading something from Bill SerGio, the infomercial king.

  43. 2. private companies are profit driven and will routinely deny as much coverage as they can wiggle out of

    Actually, national health care programs are more likely to cut back on “unnecessary” treatments, which is why prices in other countries are so much lower despite no competition. This is especially true for areas in which service cannot be denied to some people by law. Health care is extremely cheap in Texas, for example, as opposed to New Jersey. National programs deny treatments due to morals or by what they deem to be unneeded. With private health care, more money being spent means just raising the price. That’s actually the biggest problem by far–consumers don’t feel the burden of spending out of their own pockets. Everyone else’s pockets become negatives externalities and you’re going to want to spend your money’s worth by going in for stupid things, which only makes the process longer. Imagine how low demand and prices would get if people actually spent some of their own money!

    But the problem is, not everyone can spend that money.

  44. Wealth. Markets maximize wealth. (Sometimes they call it social utility or social welfare, but whatever it’s called, it’s always measured in dollars.)

    Dan 7000, if that were the case, then the free market would work towards the reduction of choice, the elimination of product, quality and availability of said product. But the opposite is true. With government controlled economies, and yes, this extends to all levels, whether it’s a specific, isolated industry (healthcare) or all industry (socialism/communism) the result is always…always the same: rationing, shortages, and no known metric of what the true costs of goods and services are.

    It is via the pursuit of wealth and the competition for that wealth that create choices, improve qualities, and maximize attention to consumer demand.

    The market must appeal to the self-interest of the buyer, if it doesn’t, then the buyer goes elsewhere.

    And yes, before I get the predictable response “but healthcare is unique and different”, I would argue that while it’s arguably different on a case-by-case basis, it’s not different across the healthcare industry as a whole. In aggregate, the market will increase our choices, produce better quality healthcare, and there will be excess wealth so that the poorest people, unable to afford said healthcare can still be taken care of.

    Oh, by the way everyone, some interesting stories making the rounds about the difficulties that some foreign countries are having because of the new influx of “medical tourists”. Creating some interesting market dynamics for countries which have “inexpensive” healthcare.

  45. When I go to the Dr…there are 50 people involved.

    1. The receptionist
    2. The nurse
    3. The doctor
    4. The insurance/billing specialist (DR. side)
    5. The mailroom guy @ the insurance
    6. The mailroom guy that takes my claim form to claims.
    7. The 1st claims guy.
    8. The 2nd claims guy.
    9. The adjudicator.
    10. The one that determines eligibility
    11. The adjustor that will routinely deny the claim.

    So then the uninsured should have much cheaper healthcare, right? Because by that logic, then all you’d have is:

    1. The receptionist
    2. The nurse
    3. The doctor
    4. Your wallet

    But yet, it still doesn’t work that way… why? I’ll let you marinate on that and figure it out.

    By the way, publicly funded systems do not have such a simple process, if they did, the govnermental departments (any government) for healthcare, be it Medicare of the NHS, would be tiny outfits.

  46. I wouldn’t wish government-run health care on my worst enemies.

    (then again, I would wish even nastier things on them).

  47. “””The two greatest drivers of health care prices are the intentionally limited supply of physicians and Medicare’s high reimbursement rates.”””

    Medicare’s high reimbursement rate? Don’t kid yourself. Medicare pays very little on a claim. Medicaid is the work horse for paying claims for the poor, at least in NYS.

    “””Funny, I don’t recall professional health care as being one of the unalieable rights mentioned in the Declaration of Independence. I missed that part in the Bill of Rights as well. I guess I’ll have to read those documents again.”””

    Those rights were alienated a long time ago.

    My dad still has the doctor bill from when I was born. $200 dollars.

  48. This is how government health care works:

    Ray Farmer, my friend, goes to the Long Beach Naval Hospital with stomach pains so intense he has to be helped into the hospital, one grown son on each side (wheelchairs? we don’t need no steenkin’ wheel chairs).

    The doctors tell him he needs to go home and take some Metamucil and he’ll be fine.

    They do this about four times until finally he goes to a private doctor who takes a quick look at his charts from the Navy and says, Dude, I believe you have cancer. Let’s do a biopsy. Sure enough. Pancreatic cancer and he’s dead 4 weeks later. A miserable got dam way to die too.

    Now, I’m not saying Ray could have been saved because pancreatic cancer can be a death sentence. What I’m saying is he could have been properly diagnosed up front. But see, tests cost money and the USN doctors are busy and they were pretty sure he just needed to take a good crap. So they skipped it. Four times.

    I’m also not saying necessarily that a private doctor would have been on it, although the one he went to was able it figure out from the charts that Ray probably had cancer. Something that was entirely lost on the USN.

    And Long Beach Naval Hospital was filthy.

  49. With proper and diligent use of a penis pump, I no longer require the use of a cane. “a penis saved is a penis earned.”

  50. Only whackos who think that Doctors are overpaid (they’re not) subscribe to the conspiracy theory that somehow the AMA is responsible for driving up costs. I am no fan of the AMA, but the fact is, Doctor salaries are a tiny slice of the $3.1 trillion healthcare pie. Most healthcare dollars are spent on hospitals, equipment, supplies, technicians, staff and administration, not doctor salaries.

    Here’s the breakdown in medical expenditure for Drs. vs. hospitals
    Professional compensation: 20%
    Hospital billing: 30-40%
    I don’t think that physicians are necessarily overpaid, but 20% is not a “tiny slice”

  51. From what I understand, the Medicare administration doesn’t negotiate with drug companies to get wholesale rates on drugs like normal pharmacies do. This seems beyond ridiculous to me since they buy the vast majority of them, one way or another.

  52. And Long Beach Naval Hospital was filthy.

    The one time I was hospitalized in the Navy, the Bremerton Naval Hospital (Washington State) was clean, professional and courteous. And it’s the same government, “standardized” system. Remember that folks. “Standardization” is often touted as a money saver, but it doesn’t exist in a relatively small (< 1 million patients) government run system. Extrapolate that to the > 300 million patient system.

  53. Tacos, “professional compensation”, just curious, what does “professional compensation” cover? Does that cover MD’s only, or does it cover all “professional” medical staff, nurses, PA’s, MA’s, RN, LPN’s?

    I know some career RN’s that make a buttload of money.

  54. I know some career RN’s that make a buttload of money.

    Some career RNs deserve a boatload of money.

  55. Yeah, they can spend billions and cut millions, but they still can’t stop ripping people off.. There are MANY elderly people living on a fixed income that can’t pay their increasing premiums, while these major insurance companies sit back and collect their money. AARP has set up http://www.thisissoridiculous.com so that we can all sign a petition to make our voice heard. While your there you can also read updated news, watch videos, and even e-mail your congressman to let him know how you feel. I’m working to help AARP promote better Medicare because this is an important issue that isn’t getting enough attention.

  56. Penis Pumps?? I don’t even know what this is. This sort of thing ain’t my bag, baby.

  57. “I’m working to help AARP promote better Medicare because this is an important issue that isn’t getting enough attention.”

    The old Association of Aged Rich People, Huh?

    Yeah, geezers have it so tough. That having to choose between the meds and the extra cruise or the trip to Europe this year is such an injustice.

    Yep, old people just get enough attention. What a laugh.

  58. “Ron Paul needs to stop infecting me with his horrible, horrible optimism.”-Warty

  59. As a tax guy, I can attest to the fact that RN’s make good money. But the hours suck.

  60. TWC:

    As a guy who’s worked in companies for a long time, it’s been my experience that most people who make good money have hours that suck.

  61. that does seem to be the trade off.

  62. miche | November 30, 2007, 3:50pm | #
    As my husband’s best payer, Medicare bought me a Mercedes SL55. If the Aetna, UHC and the Blues paid as well, I would be able to get the car I really want.

    Which is what, precisely? A fucking Maybach?

  63. “I say, let democracy run our healthcare, not markets. Improve democracy if you want to better maximize social welfare, but don’t expect markets to maximize anything but money.”

    I’m curious, exactly how would “democracy” run healthcare? What creditionals does “democracy” have to run healthcare?

    “Democracy” just means a majority of an electorate voting on a particular issue. An electorate composed of people who likely are not well informed about the issues (and likely should not be expected to be either). There is very little about healthcare that is conducive to making decisions about it by democratic means.

    The words you are using, in the way you are using them, have no meaning. The words may sound good on their own, but only someone ignorant would believe that your comment represents and intelligent suggestion.

  64. Statement from American Association for Homecare on

    New York Times Article about Home Oxygen Therapy

    November 30, 2007

    Today’s New York Times article by Charles Duhigg (“Oxygen Suppliers Fight to Keep a Medicare Boon,” November 30, 2007) paints a biased and misleading picture of the healthcare sector that provides home oxygen therapy to Medicare beneficiaries.

    The article contends that Medicare vastly overpays for medically prescribed oxygen therapy delivered in the homes of Medicare beneficiaries and that Internet pricing of oxygen equipment is a more realistic barometer of what Medicare should be paying for oxygen therapy. Medical oxygen is a prescription drug that is highly regulated by the FDA. The typical Medicare beneficiary on home oxygen therapy is an elderly patient who suffers from chronic obstructive pulmonary disease (COPD).

    The American Association for Homecare welcomes a genuine debate about appropriate Medicare payment policy for oxygen therapy. In fact, the Association and companies providing oxygen therapy have been working for more than a year to design alternatives to existing Medicare oxygen policy for Congress to consider. Unfortunately, both the New York Times article and federal policymakers have focused only on the equipment costs associated with home oxygen therapy rather than the complete therapy, which requires numerous services. Based on this misleading perspective, which is divorced from the realities of serving the Medicare population and COPD patients in particular, Congress has enacted numerous cuts to oxygen over the past decade, reducing Medicare payment rates for oxygen therapy by nearly 50 percent. Moreover, oxygen payments are scheduled to be reduced by an additional 19 percent over the next two years because of previous legislation, regardless of congressional action this year.

    The fundamental flaw in the New York Times article is the dangerously simplistic assumption that oxygen therapy delivered to Medicare patients in their homes should cost the same as the Internet or eBay price to buy the equipment only.

    The reality of serving this population is very different. A 2006 study by Morrison Informatics gathered and analyzed data from homecare providers that collectively serve more than 600,000 Medicare beneficiaries receiving oxygen therapy in their homes. That number represented more than half of the Medicare population receiving oxygen therapy at home. The study found that nearly three-quarters (72 percent) of the cost of providing oxygen therapy to Medicare patients in their homes represent services, delivery, and other operational expenses that benefit patients. Only about one-quarter (28 percent) of the cost represents the oxygen equipment itself. These service costs have not been factored in to any of the government sanctioned studies.

    The article discusses lobbying expenditures by the home oxygen therapy industry. Lobbying expenditures by the home oxygen therapy sector is a tiny fraction of the total expenditures by pharmaceutical companies, hospitals, and physician groups that seek to influence Medicare policy by lobbying Congress.

    It is worth noting that all home medical equipment spending by the federal government is less than two percent of all Medicare spending. Long-term oxygen therapy reduces hospital admissions. The average daily cost for home oxygen therapy is approximately $7.60 in Medicare, compared to average of more than $4,600 per day in a hospital under Medicare.

    The article also mischaracterizes the Medicare competitive bidding system and new quality standards for durable medical equipment. By design, this competitive bidding program excludes many home medical equipment providers from participating in Medicare – even if the providers agree to lower prices set by the bid process. The Medicare bidding program will likely drive large numbers of providers out of the Medicare program.

    The allegation by unnamed Medicare officials that the home medical equipment industry undermined new quality standards is false. In fact, the home medical equipment industry advocated for higher quality standards than those actually adopted last year by Medicare.

    These and other errors, omissions, and the use of unnamed sources to make unsupported claims in the New York Times article suggest that the reporter never intended to write an objective story.

    BACKGROUND

    In 2006, Congress dramatically changed policy for oxygen therapy by requiring Medicare beneficiaries to assume ownership and responsibility for their oxygen system after 36 months of use. Previously, the beneficiary used the equipment as long as medically necessary and an oxygen provider took responsibility for maintenance, a back-up oxygen-delivery system, 24-hour emergency service, and other services required for proper use and patient safety.

Please to post comments

Comments are closed.