Thursday, August 13, 2009

Medicare for all isn't the answer

Yes, Alan Miller is CEO of Universal Healthcare, Inc., a healthcare management company. But what he says makes sense to me.

If a government health-care plan is significantly cheaper than private health insurance, then employers are going to leave private insurance in droves and offer only the government option. And if the government plan does not have to care about profitability, then its low-cost is artificially maintained, because no matter how poor the plan the gov't can pour endless tax dollars into it.

Further, he notes:

A single-payer system may appear attractive to some. But as someone with more than 30 years of experience running a leading hospital company with international operations, I have firsthand knowledge of the hidden costs.

Medicare reimbursements to hospitals fail to cover the actual cost of providing services. The Medicare Payment Advisory Commission (MedPAC), an independent congressional advisory agency, says hospitals received only 94.1 cents for every dollar they spent treating Medicare patients in 2007. MedPAC projects that number to decline to 93.1 cents per dollar spent in 2009, for an operating shortfall of 7%. Medicare works because hospitals subsidize the care they provide with revenue received from patients who have commercial insurance. Without that revenue, hospitals could not afford to care for those covered by Medicare. In effect, everyone with insurance is subsidizing the Medicare shortfall, which is growing larger every year.

If hospitals had to rely solely on Medicare reimbursements for operating revenue, as would occur under a single-payer system, many hospitals would be forced to eliminate services, cut investments in advanced medical technology, reduce the number of nurses and other employees, and provide less care for the patients they serve. And with the government in control, Americans eventually will see rationing, the denial of high-priced drugs and sophisticated procedures, and long waits for care.

The Democrats need to work with businesses, especially small businesses. A government-backed insurance plan seems to have an unfair advantage over private insurance.

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