The debate continues about whether the government should be given greater power over our health care. But the government already plays an expansive role: Public financing of health care, aggregating federal, state and local programs, makes up 46 percent of all U.S. health spending.
Medicare alone represents 19 percent of those health care dollars. In 2008, more than 45 million Americans were covered under Medicare, including 38 million senior citizens and 7 million persons with disabilities, with total benefits paid out of the program totaling $462 billion.
Unfortunately, as many seniors are discovering, coverage does not always guarantee care, and government insurance does not necessarily mean that you will find a doctor who will treat you.
In October 2009, more than 3,000 patients at the Arrowhead Mayo Clinic in Glendale, Ariz., received a startling letter: Arrowhead would no longer dispense primary medical care to Medicare patients. A Mayo spokesman said that Medicare patients at Glendale would have to pay cash for primary services from now on. The reason? Doctors at the clinic were not receiving sufficient reimbursements from the government to cover the cost of treating Medicare patients.
According to spokeswoman Lynn Cosway, the Mayo organization as a whole lost more than $840 million in one year on Medicare. The Mayo system in Arizona, consisting of a hospital and four clinics including the Arrowhead facility, lost $120 million in 2008, according to Michael Yardley, another Mayo spokesman.
Mayo is not alone in taking Medicare patients at a loss. According to the March 2009 report of the Medicare Payment Advisory Commission, “About 20 percent of providers have losses under Medicare,” making it hard for some seniors to find a doctor.
Why does Medicare reimburse doctors on average only 80 percent of their treatment costs? Physician reimbursements are often casualties of efforts to rein in Medicare’s costs, and are determined by a formula called the sustainable growth rate system. Yet in spite of these and other cost cutting measures, Medicare is still on the verge of bankruptcy.
Medicare’s lesson is loud and clear: Government programs rarely work as intended, have problems of their own, and come at enormous cost. But sadly, the dismal fiscal and patient care condition of the government’s flagship health insurance program has not restrained Congress and the President from pushing for new and even more sweeping health plans.
Matt Patterson is policy analyst for The National Center For Public Policy Research and a National Review Institute Washington Fellow. He can be reached at email@example.com.