Saturday, April 16, 2011

"The US Medicare Financial Problem" Reprint Of My May 17, 2009 Blog Post

To resolve the long-term US deficit problem, Congress must tackle Medicare funding. According to the 2010 Medicare Trustee Report, the recently passed new health care law, the Patient Protection and Affordable Care Act, did not resolve the long-term Medicare funding problem. See my recent post, "Time To Burst The Longterm Medicare Affordable Funding Myth."

Below is the full reprint of my still relevant 2-year old blog post, "The US Medicare Financial Problem" from May 17, 2009:
The US Medicare Financial Problem

Population Effects

According to US Census Bureau data and projections, the fundamental problem of Medicare is that the over 65 year old population and the over 85 year old population will increase in both absolute numbers and as a percentage of the US. The US will have a doubling of Medicare enrollees by 2030. The high cost users, those over 85 years old, will quadruple by 2050.

The over 65 group will be twice as large. It will grow from 35 million, 12 percent of the US in 2000, to 71.5 million, and 20 percent of the total US population in 2030.

The US Census Bureau projects that the population age 85 and over will grow from 5.3 million in 2006 to nearly 21 million by 2050. Some believe that the 85 and over number will be higher due to longevity improvements. From 2030 onward, the proportion age 65 and over will be relatively stable, at around 20 percent.

Medicare Costs

More users equal more cost. More high cost users, those over 85 years old, means even more costs. A higher percentage of seniors in the US mean less tax revenue to pay for Medicare costs.

Even if medical costs per person do not grow, the total cost for Medicare will grow due to the doubling of the over 65 age group and the quadrupling of the over 85 age group.

The Medicare Trustee report states that Medicare costs for the over 65-age group is about $11,000 per person. Subtracting Medicare enrollees and Medicare expenditures from total US numbers shows that non-Medicare enrollees', (the under 65-age group less the few other Medicare categories), medical costs average about $8200 per person.

However, the 35 percent difference is due to more than the higher costs per person of a user of medical services. Medicare has a higher utilization of its services than the non-Medicare population. There are fewer non-users and low volume users to subsidize the typical medical service user in Medicare than in the non-Medicare population.

Add medical cost inflationary increases at a rate above the average US inflation rate and the US government faces a difficult problem. The US government cannot afford to continue Medicare as it is currently financed and structured. The senior citizen lobby and voting bloc, whose base is growing as a percent of the US population, makes changes to Medicare structure and costs politically difficult.

Way to a Solution

Politically, universal healthcare dilutes the senior voting bloc and gives the government an opportunity to modify Medicare under another rubric, but successful solutions to control costs that do not limit or ration medical services are not obvious. Additionally, the President and Congress also do not trust the capitalistic, market pricing based system to cost effectively meet the needs of the medical consumer.

When delivery solutions of a business service problem are unknown, the best route for success is the competitive market. Profit-motivated, competitive, market based pricing with costs borne by the end user drives all producers and deliverers to become as efficient as possible. This is what capitalism is all about and how the US standard of living has grown substantially since its founding to become the highest in the world.

Without a well-functioning pricing mechanism, investments in medical services are misallocated and users do not limit their use by need or seek lower cost effective alternatives.

Even the poor and uninsured will have their needs met in a market base system. The delivery system and provider cost per patient will change. There maybe fewer doctors and hospital in an area and longer wait times to increase their volume and profit per doctor and hospital. There will probably be more use of nurse practitioners and other low cost providers, but the medical providers will meet all the demand. Even surgeries will change to become more efficient and less costly. For example, right now surgical procedures have the highest profit margin in the medical profession due to high reimbursement rates. Under a market pricing system, this profit margin will narrow and procedures will become efficient. There will be many other changes that the government cannot even envision, but cheaper delivery systems and other cost-cutting changes are the strength and power of capitalism and market based pricing.

The government should focus on the best way to transition to a market based system for medical services. The government should also remove all the laws and regulations that drove medicine away from a competitive, market based system, such as the employer medical benefit tax deduction and many other misdirected government policies.

See my previous post, "Health Care Is A Pricing Mechanism Problem Not An Insurance Problem"

7 comments :

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    ReplyDelete
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  3. Dear friends, my name is Sandra Luis from Canada, i am into business,but it was not bringing out profit as it was supposed to, life was not what living cos things was bad for me financially, i have a beautiful wife with four kids to take care off. i sold my car and most of my property just to keep earns mate and still things was not going easily for me. so i complained to a friend of mine who said he knew a powerful spell caster from Africa called Dr ATILA who can perform magical money spell or good luck or automatic promotion in office, making someone love you back, spells to bring close one in jail or lost back home,healing spell etc.that help straightened his brother life from taking hard drugs. At first i was confused and doubtful, then i decided to give a try and did what Dr ATILA told me to do, to my surprise 3 days later things started going well for me, i got what i ever bargained for, my business was flourishing like never before, i now have enough money to take good care of my family and we are living happily,I thank His greatness .atilahealinghome@yahoo.com for bringing my source to hope and joy with his powerful spell,well if you want to be a living testimony like me or interested in any spell casting you can contact Dr ATILA via this email atilahealinghome@yahoo.com

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  4. my mouth is full of testimony is just like a dream but is real all thanks to papa Dr saulat.
    I will continue to share this testimony sir till the whole world had of it. i am out here to spread this good news to the entire world on how I got my ex husband back.I was going crazy when my husband left me and my two kids for another woman last month, But i complained to my colleague in my place of work and she discuss with me her experience too and how she over come with the help of papa Dr saulat the great messenger God is using to help people, I narrated my problem to Dr saulat about how my Husband left me and my two kids and also how i needed to get a job in a very big company.He only said to me that i have come to the right place were i will be getting my heart desire without any side effect.He told me what i need to do,After it was been done,24 hours later,My Ex Husband called me on the phone and was saying sorry for living me and the kids before now and one week after my Husband called me to be pleading for forgiveness,I was called for interview in a very big company here in Washington DC were i needed to work as the managing director..I am so happy and overwhelmed that i have to tell this to the entire world to contact saulatspellhome@yahoo.com on his personal email address or website http://drsaulatindiaspell.webs.com/ and get all your problem solve..No problem is too big for him to solve

    ReplyDelete
  5. my mouth is full of testimony is just like a dream but is real all thanks to papa Dr saulat.
    I will continue to share this testimony sir till the whole world had of it. i am out here to spread this good news to the entire world on how I got my ex husband back.I was going crazy when my husband left me and my two kids for another woman last month, But i complained to my colleague in my place of work and she discuss with me her experience too and how she over come with the help of papa Dr saulat the great messenger God is using to help people, I narrated my problem to Dr saulat about how my Husband left me and my two kids and also how i needed to get a job in a very big company.He only said to me that i have come to the right place were i will be getting my heart desire without any side effect.He told me what i need to do,After it was been done,24 hours later,My Ex Husband called me on the phone and was saying sorry for living me and the kids before now and one week after my Husband called me to be pleading for forgiveness,I was called for interview in a very big company here in Washington DC were i needed to work as the managing director..I am so happy and overwhelmed that i have to tell this to the entire world to contact saulatspellhome@yahoo.com on his personal email address or website http://drsaulatindiaspell.webs.com/ and get all your problem solve..No problem is too big for him to solve

    ReplyDelete
  6. Hello my name is mrs Tessy Jerry and am from u s a, i am hear to give testimony of how i got back my husband, we got married for more than 9 years and have gotten two kids. thing were going well with us and we are always happy. until one day my husband started to behave in a way i could not understand, i was very confused by the way he treat me and the kids. later that month he did not come home again and he called me that he want a divorce, i asked him what have i done wrong to deserve this from him, all he was saying is that he want a divorce that he hate me and do not want to see me again in his life, i was mad and also frustrated do not know what to do,i was sick for more than 2 weeks because of the divorce. i love him so much he was everything to me without him my life is incomplete. i told my sister and she told me to contact a spell caster, i never believe in all this spell casting of a thing. i just want to try if something will come out of it. i contacted for the return of my husband to me, they told me that my husband have been taken by another woman, that she cast a spell on him that is why he hate me and also want us to divorce. then they told me that they have to cast a spell on him that will make him return to me and the kids, they casted the spell and after 2 days my husband called me and he told me that i should forgive him, he started to apologize on phone and said that he still love me that he did not know what happen to him that he left me. it was the spell that Great ADAGBA casted on him that make him comeback to me today,me and my family are now happy again today. thank you Great ADAGBA for what you have done for me i would have been nothing today if not for your great spell. i want you my friends who are passing through all this kind of love problem of getting back their husband, wife , or ex boyfriend, ex lover and girlfriend to contact great ADAGBA with this via adagbaspiritualtemple@yahoo.com

    ReplyDelete
  7. My name is TESSY JERRY FROM USA, I head that my husband was having an affair with one of my closest friend and I was very upset and worried so a friend of my advice me and told me if I still love my ex and if I really want to have him back so I told her yes, and she ask me to contact Dr. ADAGBA the spell caster and I did although I never believe on spell so he gave me something when he was casting the spell and ask me to say my wishes on it and after the casting of the spell a receive a phone call from my ex and was ask me at which I did and now we are back together again I’m so happy and I wish not to ever have this mistake again in my life. I will also advice anyone with this kind of issue to contact him for help he is really nice on phone and always there to answer you question giving you the good advice that you need. his email is adagbaspiritualtemple@yahoo.com

    ReplyDelete