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June 27, 2009

RCP: Busting the Administrative Cost Benefit Myth

Topics: Political News and commentaries

The administration, along with pundits from the liberal media, has been boasting about the administrative costs of Medicare being an example of what government can do right (For Medicare it's roughly 3 percent and for private insurers its roughly 12 percent). But there's a catch to this "miracle":

... Medicare is devoted to serving a population that is elderly, and therefore in need of greater levels of medical care, it generates significantly higher expenditures than private insurance plans, thus making administrative costs smaller as a percentage of total costs. This creates the appearance that Medicare is a model of administrative efficiency. What Jon Alter sees as a "miracle" is really just a statistical sleight of hand.

... when you compare administrative costs on a per-person basis, Medicare is dramatically less efficient than private insurance plans.

So far, that "slieght of hand" is something we've been seeing a lot of from the Obama administration and its supporters.

Related:
Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance
Administrative costs of health care coverage (pdf)
The rank dishonesty of the Obama administration
Obama the African colonial despot

Posted by Richard at June 27, 2009 10:03 AM

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