Medicaid needs government interventionPublished 11:00pm Wednesday, September 5, 2012
In a recent guest editorial in the Troy Messenger Dr. Scott Beaulier said that Medicare was a failure without indicating why he considered it to be a failure. I don’t believe that he can produce evidence that shows that Medicare is a failure. At the time that Medicare was enacted into law were the private sector providers – insurers, pharmaceutical companies and the medical community delivering an optimal amount of health care to senior Americans? What was the “overhead” rate or percentage of health care dollars that actually went to health care services and how much was eaten up by advertising and excessive profits? And, don’t tell me that competition alone will take care of excess profits when extensions for drug patents were being granted left and right.panels
In many cases the private sector has not and will not provide an adequate supply of a needed good. Some examples of this have been and are education, roads, railroads, airline service and health care. Public schools, especially colleges and universities came about because the private sector was not providing an optimal amount of education services. The building of railroads into the west was subsidized in part because society judged that the private sector could not or would not build them into the west fast enough or build enough at an optimal rate for the nation. Similarly roads would not be built into many areas if it was left up to the private sector as many roads would not pay for themselves if payment was based upon private investment and tolls – the private sector would not build a sufficient quantity of roads. Airline service would never have been extended to many markets without subsidies or a government mandate.
The numbers that I have seen indicate that the Medicare system “overhead” is less than 10 percent, perhaps as low as 7 percent. Private insurance companies after profit and other non-health services delivery costs are taken off the top deliver much less that 90 to 93 percent of funds to delivery of services. I just recently received a check because out high-deductible, wealth protection policy provider only returned about 50 percent of insurance payments to services, far less than the 80 percent mandated by the Affordable Health Care Act.
Certainly there is room for improvement in every government program. However, for Dr. Beaulier to say that Medicare is a failed system is over the top just as the attacks on the Canadian and British health care systems are over the top. To make both government and the private sector better requires much more than just the price mechanism. We need a public discourse about delivery of health care services and for that matter education services. There is a lot of room for improvement in both. On the medical side a very high percentage of medical costs are expended for care in the last few months of life. When there is a discussion of how to control medical costs and end-of-life care comes up it is not productive for those trying to protect the status quo start talking about killing granny.
Similarly, when our nation and the world face tremendous challenges that are very dangerous with potential deadly consequences for many human being such as climate change there needs to be an honest public discussion and decisions about the responses that society should undertake. When there is no public discourse because those wishing to protect the status quo overwhelm the science by spending millions of dollars to distort or deny the science it is a disservice to society and all of mankind and nature.
The Koch brothers, significant funders of the Johnson Center at Troy University, have spent an estimated $50 million dollars to distort climate change science. One has to ask whether centers like the Johnson Center at Troy University and similar Koch brothers funded centers at Florida State University and George Mason University are primarily about political economy or protecting the status quo. The nation is not well-served by a few dozen billionaires using their riches to distort or prevent public discourse on major issues facing the nation and mankind.
Michael William Mullen