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Comment by chairsofter | Hacker News Reader

The thing that most people don't realize and the media surprisingly never talks about is the fact that Medicare and Medicaid consistently underpay for treatments given. Somehow the government gets away with only paying 2/3-3/4 of the actual cost, leaving the hospital to foot the bill. It's so bad that many clinics don't accept Medicare because it simply causes them to hemorrhage too much cash.

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Yes, I learned this from a talk at the University of Chicago Hospitals -- Medicare/Medicaid almost always paid less than a dollar for every dollar in costs that they incurred (I think the quoted average number was closer to 50 cents on the dollar but I could be wrong). The only way they made up for these costs was from patients with certain types of private health insurance (not all types because some like Blue Cross had essentially negotiated rates very very close to cost). Without these patients, the hospital would not have been able to afford the Medicare and Medicaid patients.

Yeah that's the scary thing. The actual cost is much higher. How much of this is inefficiency/"overcharging" is up for debate but it's pretty clear that since the bulk of the cost of healthcare for most people is paid by someone else, there's no incentive to economize.

Plus modern medicine is AMAZING, but the surrounding economy isn't strong enough to support it. People simply aren't productive enough to pay for the cost of the most advanced treatments.

How does that work once more and more people are on medicare (baby boomers) and medicaid (larger absolute numbers and probably percentages of poor people in a failing economy, and possibly if there's a "public option" for healthcare in a few years)?

Presumably both medicare and medicaid are highly localized user communities, too -- I suspect very few people in Aspen use either, even if eligible for medicare.

Have you got a link to a source for that? I'd be interested in seeing the precise figures.

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