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Monday, July 11, 2011

The hidden costs of Socialized medicine

And socialized anything else for that matter.

by StFerdIII

 

Socialized anything fails. Witness the death march of EUtopia, a system of socialist-communalization which is doomed. Gut your culture, engage in nihilistic Marxism, embrace GlobaloneyWarming and Islam, and erect untenable layers and programs of what is in essence a program of communalism or communism. Hide it all with an unnatural currency. One of the great 'moral projects' is socialized health care. There is little which is moral about a system which denies markets, choices, and is prone to fraud, waiting lists, bad service and lack of access. At the very least a rational state needs two levels of health-care – a free and open market for private insurances, and a socialized communal system for those who want to take the chance of dying while waiting for system access.

According to a Wall Street Journal article the US health system which is largely socialized and completely run by government [there is no free-market in US health insurances] suffers from what any analysis of any socialized system or program would reveal; fraud, over-use, incompetence, and ultimately higher death rates – itself a massive cost to society which is very conveniently ignored by the socialized health care lovers. What price death? Maybe the socialists can pull out their calculators and try to estimate the cost of higher death rates.

US systemic issues:

1) Over-use

Almost all discussions about Medicare reform ignore one key factor: Medicare utilization is roughly 50% higher than private health-insurance utilization, even after adjusting for age and medical conditions. In other words, given two patients with similar health-care needs—one a Medicare beneficiary over age 65, the other an individual under 65 who has private health insurance—the senior will use nearly 50% more care. ....First and foremost is the lack of effective cost sharing. When people are insulated from the cost of a desirable product or service, they use more.

2) Bankruptcy leading to price controls and other distortions

....In 2007, MIT economist Amy Finkelstein explained in this paper the effects of Medicare's introduction in 1965: "By 1970, the program caused a 37% increase in hospital spending."

That spending explosion led Congress to impose price controls on in-patient hospital expenses in 1983, on physicians' services in 1992, and on outpatient hospital expenses in 2000. Those price controls have led to countless economic distortions, forcing physicians and hospitals to look for ways to maximize the reduced reimbursements. Of course, price controls haven't controlled spending—they never do. When Medicare became law in 1965, Part A (hospital expenses) was projected to cost $9.1 billion in 1990; actual spending was nearly $67 billion.

3) Higher private costs

......Several studies have also shown that low Medicare reimbursements shift costs to private-sector health insurance, making premiums higher than they otherwise would be. The actuarial firm Milliman estimated that private insurers paid an additional $89 billion in 2006 and 2007 due to Medicare and Medicaid cost-shifting.

4) Fraud

...In 2010, according to a Government Accountability Office (GAO) report released in March, Medicare and Medicaid made about $70 billion in "improper payments," or payments that shouldn't have been made, or were made in an incorrect amount. And many health policy experts think that estimate is low.

One culprit is the thousands of pages of regulations that make skirting the rules easy—even enticing to criminals. Another is the way the Centers for Medicare and Medicaid Services (CMS) goes after fraud. It has historically used a "pay and chase" model, paying every bill that comes in and only investigating if later analysis raises red flags. That approach allows the scamming of tens of millions of dollars even before the government has an inkling of a problem.

Reform socialized medicine:

Medicare needs to be totally revamped. The benefits package needs to be rationalized so seniors can tell what their financial exposure is and choose from private-sector, high-deductible options, including a Health Savings Account plan. Seniors need to benefit financially from good choices. Giving them more options and control is the best way to reduce that 50% additional utilization while preserving the program for the future.” [Mr. Matthews is a resident scholar at the Institute for Policy Innovation in Dallas. Mr. Litow is a retired health-care actuary.]

Socialism always fails. States cannot afford socialized programs. If you deem health care to be a human right than nationalize food, housing, water bottle distribution, and clothing. Health care is no different than any other market. If a socialized system is truly necessary than we should at least have the rational intelligence to allow a functioning market to co-exist in which private insurances, care, and access are subject to price points and supply and demand factors. Not only would that alleviate the stress on state budgets it would improve the morality of the system by both decreasing costs and death rates. The modern dark-age mantra of 'socialism is good' is absurd. Time to move on.