Wednesday, August 31, 2011

Link of the day



B-Daddy in writing about Medicare and fraud presented this from Aghaegbuna Odelugo who was testifying before Congress about Medicare fraud but wandered off course and started riffing on Medicare reimbursement rates:

I would like to finally talk about what I perceive to be the most significant flaw in Medicare: the rates of reimbursement. I do not know who decides, or how the decision is made, but the rate of reimbursement for certain pieces of durable medical equipment is beyond exorbitant. An example is the case of the knee braces. These items are available on the market to a DME provider for less than $100.00. Medicare, however, reimburse, if I remember correctly, approximately 1,000% of this cost. Back braces that cost approximately $100.00 are reimbursed at a rate of almost 900%. Wheelchairs that cost less than $1,000.00 are reimbursed at almost 500% of cost. For anyone engaging in fraud, these numbers are too good to be true.

Not fraud, not even a bug, but a feature!

Medicare is popular and expensive. No wonder, right? Expensive for obvious reasons as illustrated above but popular also because of a lack of cost transparency. It's not as if you are paying out of pocket for those mark-ups... not expensive for you so what's to worry about?

And that's pretty much it: "paying into a system" soon slips the clutches of reality as increased layers of bureaucracy and rules and regulations shield just what are the real costs of healthcare. And when those rules and regs are at the whim of the pols, there is no end to the amount of candy that will be tossed around.



Here's B-Daddy to wrap things up:

Ultimately, I understand that the U.S. has a robust social safety net. But I think we have gone overboard. We aren't a country that promises cradle to grave support, like socialist Europe.

There might not be an explicit promise but there appears to be an increasing implicit acceptance by the public that there is indeed a promise of cradle to grave support. How else do you explain the across-the-board bad polling numbers when it comes to any mention of entitlement reform?

Until there is "skin in the game", until there is true cost transparency as to realizing what health care goods and services actually cost and until we remove the layers between the health care providers and consumers, we will never succeed in bending the cost curve downward.








64 comments:

B-Daddy said...

Dean, thanks for the link. With regard to skin in the game, that can be achieved by reforming the program, but is more effective if we reduce reliance on government programs in general.

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