Medicare's Overhead

Rep Pete Stark chairman of the House Ways and Means Committee’s health panel is once again on the warpath The California Democrat delivered his latest zinger last week, saying he wouldn’t negotiate with insurance companies on a health-care overhaul. “I think their intention is to see the Democrats fail, regardless of what it does for health care in this country,” Rep. Stark told reporters. He went on to say that  Medicare has lower overhead than the private insurers . Stark is a true believer and like all true believers he admits no possibility of error and is recklessly intolerant of contrary views.

Stark’s attitude towards health care reform reminds me of Richard Feynman’s quip about the universe:  “The universe is not only stranger than you think; it’s stranger than you can imagine.” If we can get just one issue straight we might have a chance of getting on the right path. Medicare says that their overhead costs are 2 – 5%. When they say this they are being disingenuous. Their overhead is low because they don’t count all of it. It’s like congress spending money and then putting the costs off the books. If Medicare were a private insurance company Patrick Fitzgerald would be taping their staff meetings.

Medicare imposes an almost infinite number of unfunded mandates, rules, and regulations on medical providers. These mandates consume vast swatches of time and impose huge costs. Costs which of course are passed on to patients and taxpayers, but which Medicare doesn’t count. Talk to your doctor and ask him about Medicare’s regulatory regime. Be prepared for a lot of frustration. Why do some doctors favor a government run single payer health care system? There are a number of reasons, but likely most prominent among them is that most of these doctors don’t spend a lot of time taking care of patients.

The total cost of all this federal regulation is not known by anyone, but my guess is were it counted by Medicare as part of its overhead, which it really is, that it would put Medicare equal to or ahead of the insurance companies. Anyone who thinks that Stark and Medicare have the answer of our problems with health care should deeply contemplate Feynman’s quip. Medical care is almost as strange as the universe. Is Pete Stark the guy who’s figured it out? The government can do a lot of things, but it can never save money.

Finally, a majority of Americans are satisfied with their health care coverage. Will this still be true after Rep Stark has his way. I think we’re about to find out.

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