Wednesday, August 20, 2008

Medicare's Efficiency

One of the points that single payer advocates make is the potential cost savings we could reap from low overhead costs, they then point to medicare. This, they conflate with efficiency. However, that Medicare has low administrative costs should not surprise us, all medicare does is process claims. Thus, if medicare were to process ten times the claims it does now while maintaining its staffing concerns, it would be even more efficient by such a metric. Never mind the fact that costs could as well grow ten fold without having a discernible impact on health outcomes. I don't point this out to indicate that private health insurance is the answer, just to note that administrative efficiency shouldn't be considered such a potent talking point.

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