A comparison of overhead costs for Medicare & HMOs

Here’s a comparison of the overhead costs of Medicare and some of the nation’s largest HMOs.

I’ve long believed that with some common-sense cost saving reforms (as well as reforms on how doctors treat patients), Medicare & Medicaid could have been good solutions to providing all Americans with health insurance coverage, and the fact that Medicare provides services far more efficiently than for-profit health insurance companies seems to bear that out.


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12 thoughts on “A comparison of overhead costs for Medicare & HMOs

  1. Amen, brother Zack!

    As a former cost accountant manager, I can attest to what is shown here pre-retirement and post-retirement with 17 years on Medicare.

  2. I love the government. It does everything better than the private sector. The best thing we could do would be to implement Medicare for all. Socialize medicine completely. It would remove the burden from the employer. Best thing all around. Since the private sector hasn’t succeeded in lowering costs in utilities and telecommunications, these should be returned to government purview as well. The private sector can’t provide service more cheaply than the public sector. Critical infrastructure services like health, public safety, security, utilities and communications must be returned to the public sphere. Privatization is among the greatest threats to our democracy. We must actively reclaim the public sphere – health care is a good place to start. If the Democratic Party is to survive, reclaiming the public sphere must be first on their agenda.

    I think a little retrospection is in order just about now. Take, for instance, this little bit of insight from Grover Norquist, in the Spanish newspaper, El Mundo from 2004, just prior to the presidential elections, when asked What if Bush wins? This was Grover Norquist’s reply:

    “The Democratic Party will be forever doomed. If we take control of the legislature and the executive branch, we will reinforce our control over the judicial branch to direct it against the Democrats. We will bring about a modest limit of the ability of the people to initiate lawsuits against corporations, which will damage the lawyers who specialize in these cases, which is one of the props of the Democratic Party. We will accelerate the decline of the unions. We will cut funding to groups of public employees, like teachers, who are one of the great sources of Democratic votes. And we will begin to move the welfare state toward a private system, in pensions and health care.”

    When will the Democratic Establishment come to their senses?

  3. I agree that an expansion of Medicare would have been the easiest way to go about health care reform. However, there would also need to be a fundamental change in the way health care is administered as well, as a means of lowering costs. The Geisinger model seems to have some potential in that respect.

    Doctors and nurses are paid employees rather than independent operators in a fee-for-service environment. They are paid salaries and outcome-based performances bonuses rather than services performed. Electronic medical records are also a cornerstone of Geisinger, allowing practitioners to look at each patient’s total history as they plan treatment and deal with end-of-life concerns.

    1. Solution to the problem is to allow people the legal right to take care of their own health care needs. Only involving a doctor when necessary, which is far less often than what the medical profession wants. Currently I have to see my doctor 2 to 3 times a year, not because of any real need, but because he enjoys the government law that gives him monopoly control over access to medicine. If I don’t do as he says, I’m not allowed to legally purchase medicine. Without prescription laws doctors will be like ordinary tradesmen. They will only be called when needed. Incomes for primary care and general practitioners will drop to perhaps 1/2 of their present income if their monopolistic power over access to medicine was eliminated. The same is true of all the other professions, which should all be seen as “tradesmen” with the protection of a government enforced monopoly. It’s time to kick their butts off the “gravy train” and let them compete for business just like any other…

  4. Right on. Removing the administering of health services from private hands into public hands is definitely key.

    1. I’ve never understood how anyone could think that for-profit healthcare was a good idea. There are some things in this universe that just shouldn’t be done with profit in mind, and the proper care for those who are in need of medical care is one of those things.

      1. There is nothing wrong with a businessman making a profit. But there is something seriously wrong when that businessman can force you to purchase his services because of government law. Just as there is something seriously wrong with the basic concept of Obamacare, which forces people to buy health insurance from private profit making companies. Who have no incentive to “compete” with each other since there is no alternative. That the American people didn’t vote Obamacare “out” along with Obama himself is a good question. In any case, Obamacare violates “freedom of choice”, and the supposed “justification” of forcing people to buy health insurance because they’d otherwise cause the cost of their care to be passed on to everyone else is nonsense. We could have simply repealed “must treat” instead. We do not require supermarkets to give out free food. We do not require the electric companies to give out free electricity. Or the gas companies to give out free gas for heat. We could have “free clinics” for those unable to pay for health care, the clinics run by charities. Doctors could volunteer their time and take a deduction on their taxes for “charitable services”. There were alternatives, but the private insurance companies wanted Obamacare, paid off politicans to pass Obamacare, and now we’re stuck with this “abortion” that is Obamacare…

  5. The problem with that is that medicare is a lot of fraud. 2nd it doesn’t pay the bills. Providers and doctors would go broke if medicare were the only system. The private sector subsidizes medicare. Doctors limit their medicare patients so they can get money from the private sector to survive. Don’t believe me. Go ask your Doctor…..

    1. Most of the work done by doctors today could be done by lesser trained people for less money. Repeal of prescription laws (which exist to put money in doctors’ pockets) would mean that people would only see doctors when they themselves felt the need, not because the doctor wants to make more money. The cable TV companies do the same thing, but they have “competition”. Doctors don’t. This is really where the problem is. Why do I have to get a vet’s prescription to buy heartworm pills for my dogs? Dogs are not people. The government has no valid interest in having prescription laws for dogs. We don’t elect dogs to Congress. They don’t have legal rights as citizens of the US. The prescription law exists to enhance the income of the “dog doctor”. Proof if any is needed how the “professions” rip off the American people to the tune of hundreds of billions of dollars a year! Just like the big banks and the Wall Streeters do!

  6. Here is why profit is a good idea in Medicine. I make a good living as being a doctor. When my patient is sick I get myself out of bed at 2AM and go in to put a scope down the throat to stop a life threatening bleeding ulcer. I am motivated to do this because if I don’t they don’t call me anymore and I don’t see any more patients.

    Profit motivates behavior. I my case, I am willing to take care of the sick, work long hours, accept some biological hazard (Bless the surgeon that did the hip replacement in my Mom who had hepatitis C) and ignore the people that say I shouldn’t be making a profit.

    Get employed physicians and expect to wait for care.

    1. When I had my security guard agency, I had to get up and go in sometimes in the wee hours of the morning to relieve a guard who had gotten sick and couldn’t work the rest of his shift. There are a lot of people (police and firemen) who have to get up and do things they’d no doubt prefer not to have to do. Goes with the job. And I’m sure the police, the firemen, don’t get paid what you do. Then there are the linemen who go up on the poles to repair broken power lines, sometimes in high winds, rain, where a fall could be fatal and electrocution is always possible too. And I’m sure they aren’t earning the sort of money that doctors in the US do.

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