The Hopeless Incompetency Of The Feds Or Alternately, Why Socialized Medicine Won’t Reduce The Cost Of Health Care

10 Jul, 2008 by John Hawkins

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Liberals always claim that socialized medicine will reduce the costs of health care as opposed to raising them.

However, the federal government is so ossified, hapless, and hidebound that it can’t do anything as well as the private sector. If you want to speed something up, improve it, or make it function more efficiently, the last thing you ever want to do is have the government take charge of it.

Don’t buy that? Well, take this excerpt from a column by Michael Leavitt, the Secretary of the Department of Health and Human Services, and you tell me if you think the Feds are capable of cutting our health care costs,

“DME prices are based on a fee-schedule established by law in the 1980s and subsequently updated for inflation. But the fee-schedules weren’t based on competitively determined market prices. It is a price-fixing program, and the equipment suppliers like it because they get overpaid and don’t have to compete.

An oxygen concentrator, for example, is a device that delivers oxygen through a tube to patients, and it costs about $600 on the open market. Medicare beneficiaries typically rent the machines. The rental period, set by statute, is up to 36 months. The monthly rental payment, also set by statute, is $198.40. So renting an oxygen concentrator for 36 months costs $7,142.

As with most items and services in Medicare Part B, beneficiaries pay 20% of the costs, and Medicare pays the remaining 80%. The government, therefore, pays $5,714 – almost 10 times the free-market price of purchasing a concentrator outright. The patient pays $1,428 – more than twice the free-market price of purchase. Even allowing for the costs of setting up equipment, training and fitting the beneficiary, and other things, the rental fee is way out of line.

In light of this, when Congress passed the Medicare Modernization Act in 2003, it included a section instituting competitive bidding for DME, starting in selected communities. We’ve now conducted the bidding in 10 locales.

Unsurprisingly, the bids came in substantially below what Medicare pays – on average 26% below. These new prices took effect on July 1, benefiting taxpayers and patients.

But those who benefit from excessive fees in the current system are now in lobbying overdrive, as they stand to lose substantial business. In the 10 communities where competitive bidding has been conducted, there are a number of DME providers who either chose not to participate or weren’t successful. They and others are putting significant pressure on Congress to delay the competitive-bidding program.

If you think a health care system designed by Barack Obama’s handlers isn’t going to be loaded with provisions like this, then you haven’t been paying attention to how our government has worked for the last…well, let’s be honest, for your entire lifetime. It doesn’t matter if the Republicans or Democrats are in charge, incompetence of this type is the rule, not the exception. It always has been and it always will be, because that is the nature of the beast with the federal government.