Voodoo Economics

Let’s see, insurance companies margins and earnings at record highs, medical provider margins at record lows.  Today’s WSJ (available for 7 days) article gives an example of why this occurs.

In Insurers Fight to Defend Lucrative Medicare Business, we find out the immense lobbying efforts by our good insurance company friends to protect their medicare advantage plans. The number of so called Medicare Advantage plans administered by commercial carriers is expected to grow to more than 8 million this year.  Apparently, lots of lawmakers want to cut the payments made to these commercial carriers. 

Believe it or not CMS pays these commercial carriers more per beneficiary to administer medicare advantage than it would cost the government to administer itself.  The carriers then contract with providers at a rate below what medicare would reimburse and impose additional rules that arbitrarily limit utilization for no clinical reasons whatsoever and thus their margins and profits rise.

Yes, it sounds like and is a hoax-all at the expense of medical providers.

Larry