Medicare Is the Solution, Not the Problem

Medicare Solution not Problem Robert ReichNot only is Social Security on the chopping block in order to respond to Republican extortion. So is Medicare.

But Medicare isn’t the nation’s budgetary problems. It’s the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Medicare offers a means of reducing these costs — if Washington would let it.

Let me explain.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years – less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI’s, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There’s not much money in physical therapy.

Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you’re back there within a month. You wouldn’t be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don’t nurses do home visits to Americans with acute conditions? Hospitals aren’t paid for it.

America spends $30 billion a year fixing medical errors – the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.


  1. says

    Mr Reich has rightly touched on a key point – administrative costs. However, his treatment has a possible disconnect. According to him, administrative costs eat up 15-30 percent of HEALTH-CARE SPENDING in the USA.

    That claim is a bit different – and with more serious implications – than his assertions about how administrative costs differ among INSURANCE schemes – Medicare or other.

    Administrative costs borne by insurance companies or schemes are only a part of total administrative costs incurred in medical-care activity. In particular, as Reich notes, hospitals and doctors spend huge amounts of money billing each other and clients and insurers. These overhead costs likely are getting quietly passed along as ‘treatment overhead’ costs to everybody, and all to insurers, not just to certain clients or to certain insurers.

    So even if Medicare’s stated ‘administrative’ costs are low, likely they are on top of inflated ‘treatment’ costs.

    My own job-related medical-insurance is quite good in coverage, but its statements illustrate the needless (in this computer age) and costly paper nightmare that seems peculiar to the medical insurance industry. Any other service would regularly each month send me a single monthly statement that lists outstanding prior-months’ unsettled claims or bills, plus all new claims made by or for me and their status. Instead the insurance company sends me episodic reports on each separate claim made by or for me. Quite separately I get episodic incident-by-incident third-party-provider bills, including from labs I never heard the doctors mention. Lots of paperwork, none providing any overall tracking. You would never know that the insurance company actually had a single continuing account for me.

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