Is Medicare Efficiency a Myth?
Economics, Health Care, Politics July 6th. 2009, 6:22amGreg Mankiw has the scoop. Bottom line: Medicare’s administrative costs are $509 per patient. Private plan administrative costs are $453 per patient.
If true – I’d be wary of such a strong claim simply because it is so strong, and I’d like to see the opinions of other economists – then it’s a huge blow to an underlying premise of Obama’s health care reform ideas: that the state can do it better, and thus more efficiently. That flies in the face of conventional wisdom, as well as decades of living experience. If the state-paid clinic can’t provide health care at better prices to the American people than the private sector…why switch?
