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More on Medicare Advantage

Following up, the Kaiser Family Foundation says the following about Medicare advantage costs : Medicare Advantage plans are currently paid more, on average, than FFS costs in their area. According to MedPAC, payments to Medicare Advantage plans per enrollee in 2009 will average 114% of FFS costs for the counties where Medicare Advantage enrollees reside (Figure 3). (Emphasis added.) So, the numbers are not geographically cooked. It appears that the 14% number is an apples to apples comparison of geographically adjusted costs between traditional Medicare fee for service and Medicare Advantage Plans, on average.
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Who Will Care for the Newly Insured?

Who Will Care for the Newly Insured? - Prescriptions Blog - NYTimes.com : 2013. That’s the year everyone would have to have health insurance under the House version of the health care bill. It may seem like the far distant future — especially if you don’t have insurance now — but many experts say it’s not nearly enough time to beef up the supply of physicians necessary to care for the tens of millions suddenly entering the health care system. This is another problem that will have to be addressed. There are already significant shortages of front line medical personnel in many parts of the country. The economics of the medical educational and delivery systems push doctors toward high-end specialties and away from primary care where they are needed most. The problem gets much worse if you suddenly put millions more people with insurance into the system. One of the big concerns is the operation of simple supply and demand: without structural intervention, the injection of much more demand...
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Methods of cost control: Capitation

As I have mentioned previously, the extension of health insurance to all Americans by 2013, as proposed by President Obama, will, by itself, do nothing to control the escalating costs of health care. Rather, by increasing demand without correspondingly increasing supply, there is every reason to believe that it will put additional upward pressure on the cost curve. A point of general agreement among health care economists is that the prevalent fee for service model for the delivery of physician, hospital and other professional services is a significant source of the cost problem. This model gives strong incentives to providers to direct patients toward more, and more intensive, services, and for both patients and providers to select services and procedures that have any possibility of a marginal positive result, even if the cost is vastly out of proportion to the possible benefit. Further, economically speaking, the patient and the payer (whether the government or private insurance co...
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