Private Management of Schools? Maybe We Can Learn From Bush's Medicare Experiment

HT to Keith Olberman. From the New York Times, Nov. 23:

WASHINGTON — Private health insurance plans, which serve nearly a fourth of all Medicare beneficiaries, have increased the cost and complexity of the program without any evidence of improving care, researchers say in studies to be published Monday.

The studies, questioning the value of some private plans for Medicare beneficiaries and taxpayers, were issued as President-elect Barack Obama and Congressional Democrats take aim at the plans and consider cutting the payments they receive.

Enrollment in private Medicare plans has nearly doubled in five years, to 10.1 million.

In one study, Marsha Gold, a senior fellow at Mathematica Policy Research, says that private Medicare Advantage plans “are now widely available nationwide,” even in rural areas, as Congress intended when it revamped the program in 2003.

But the study, to be published in the journal Health Affairs, says that 48 percent of the additional enrollment comes from a type of plan that mimics traditional Medicare and generally does little to coordinate care. Enrollment in these “private fee-for-service plans” has shot up to 2.3 million, from 26,000 in December 2003.

In a separate article, two analysts from the Medicare Payment Advisory Commission, Carlos Zarabozo and Scott Harrison, said that growth in private plans had driven up costs because the government pays them 13 percent more on average than what it would spend for the same beneficiaries in traditional Medicare.

The commission, an independent federal panel that advises Congress, has expressed concern about the disparity for years.

“The higher payment rates have financed what is essentially a Medicare benefit expansion for Medicare Advantage enrollees, without producing any overall savings for the Medicare program, and with increased costs borne by all beneficiaries and taxpayers,” Mr. Zarabozo and Mr. Harrison write. . . .