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Subject:  Re: Oopss....error...error Date:  10/27/2009  1:27 AM
Author:  cevera1 Number:  21434 of 116885

It costs more per patient to administer medicare than private insurance costs.

Well, that 'myth' is blown away....

Nothing of the sort. Your first clue is that it was an article from the heritage foundation. The second clue is that it was posted as fact by someone who quotes John Galt like he really exists.

No, Book's assumptions been debunked. For those inclined to listen to reason, read the entire paper. Tele, you can just finish reading Atlas Shrugged, again. The Heritage fallacy is rebutted starting on page 6.

These administrative spending numbers have been challenged on the grounds that they exclude some aspects of Medicare’s administrative costs, such as the expenses of collecting Medicare premiums and payroll taxes, and because Medicare’s larger average claims because of its older enrollees make its administrative costs look smaller relative to private plan costs than they really are. However, the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under MedicareAdvantage.16 Thisisanearperfect“applestoapples”comparisonof administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.
(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.)

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