Fix Health Care Policy

Posts Tagged ‘controlling costs’

September 20, 2012

Health Care News

Medicare Reform Debate: What Really Works in Health Care Competition

Recently, economist Paul Krugman derided the premium support plan to reform Medicare:

Still, wouldn’t private insurers reduce costs through the magic of the marketplace? No. All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.

Of course, Medicare has been shown to be “efficient” enough to lose more money to fraud than private insurance. Peter Suderman of Reason magazine recently pointed out a number of studies suggesting that the private sector can effectively control costs in health care. One notable study recognizes that private plans do have the potential to control costs better than the government, as illustrated by Medicare Advantage’s success in constraining costs compared to traditional Medicare.

Read the rest on The Foundry…

Tags: controlling costs, defined contribution, guaranteed benefits, Medicare, Medicare Advantage, more competition, premium support, private plans