What's broken in our economy and how we may repair it(victusspiritus.com)
victusspiritus.com
What's broken in our economy and how we may repair it
http://www.victusspiritus.com/2011/04/10/whats-broken-in-our-economy-and-how-we-may-repair-it/
5 comments
I was of the impression that was not the case.
You appear to be correct.
http://facts.kff.org/chart.aspx?ch=1804
..."public service efficiency"...administrative costs were lower than that of the average private health plan.
Measuring the ratio of medical costs to administrative costs is a ridiculous way to measure efficiency.
Consider one insurer which pays $75 in useful medical costs and $25 in administrative costs. In particular, this insurer spends $10 on fraud prevention and $15 on regular billing. This insurer has a medicine/admin ratio of 3 and spends 25% on administration.
Consider another insurer which pays $75 in useful medical costs, has no fraud prevention department and spends another $15 on fraudulent medicine, and a regular billing dept costing $15. This insurer has a medicine/admin ratio of 6 and spends 14% on administration.
By your metric, the second insurer appears more efficient in spite of spending 5% more money to deliver the same amount of useful medicine.
You appear to be correct.
http://facts.kff.org/chart.aspx?ch=1804
..."public service efficiency"...administrative costs were lower than that of the average private health plan.
Measuring the ratio of medical costs to administrative costs is a ridiculous way to measure efficiency.
Consider one insurer which pays $75 in useful medical costs and $25 in administrative costs. In particular, this insurer spends $10 on fraud prevention and $15 on regular billing. This insurer has a medicine/admin ratio of 3 and spends 25% on administration.
Consider another insurer which pays $75 in useful medical costs, has no fraud prevention department and spends another $15 on fraudulent medicine, and a regular billing dept costing $15. This insurer has a medicine/admin ratio of 6 and spends 14% on administration.
By your metric, the second insurer appears more efficient in spite of spending 5% more money to deliver the same amount of useful medicine.
Well, to be fair it's not my metric. I was just saying that the one fact I remembered that could be construed as "public service efficiency" wrt Medicare did not support the authors' (unsubstantiated) claim.
Government programs are definitely out of control. Choice and value are declining, while costs are skyrocketing. The problem is a lack of competition and a disconnect between costs and benefits.
If people directly paid the costs for many benefits they get and had a choice about providers, they wouldn't want government and the federal government in particular to deliver them. They'd get them locally where they can give the money and their requirements to one entity, without passing them through layers of distortion and back down through layers of cost.
Which is why government likes to give out its benefits for free or subsidized. There's no way it could compete otherwise.
If people directly paid the costs for many benefits they get and had a choice about providers, they wouldn't want government and the federal government in particular to deliver them. They'd get them locally where they can give the money and their requirements to one entity, without passing them through layers of distortion and back down through layers of cost.
Which is why government likes to give out its benefits for free or subsidized. There's no way it could compete otherwise.
The author misread the chart: "consumer price index and selected components", so '27' actually means that a ~2005 television costs 27% of a 1978 television - not 27% more, as his comment on the right states.
If you really want to know what is wrong with our economy check out this video: http://www.youtube.com/watch?v=ZPWH5TlbloU
The Federal Reserve is what's broken in our economy and the American Dream is a flawed illusion.
The Federal Reserve is what's broken in our economy and the American Dream is a flawed illusion.
please flag this pseudo-economic-analysis fluff.
Don't flag articles for being bad. You may wish to flag articles for being about politics, though.
"But Baumol’s Disease doesn’t explain ... how Medicare has leaped from $52 billion a year to $600 billion a year in a decade. ... What does explain these gigantic increases is monopoly powers granted to cartels by unaccountable State fiefdoms."
If this was true, Medicare spending per capita should have risen faster than health care costs in general. I was of the impression that was not the case. Surely the "unaccountable state fiefdoms" can not be responsible for the skyrocketing cost of non-government health care?
"Our national government is incapable of simplifying, improving public service efficiency"
I'm not sure what "public service efficiency" is but, again, I was of the impression that Medicare administrative costs were lower than that of the average private health plan.