Jeff Goldsmith writes:

As you may know if you’ve read my postings, I’m an outspoken advocate of tightening Medicare fraud and abuse laws. There will be a post on this in a day or two. It’s actually the stuff that’s legal that is the problem: doctors self-referring patients for radiological scans, surgery, hospitals admissions to facilities they have an ownership interest in. I think there is just as much “fraud” of this type- rampant self dealing- on the private insurance side.

The scandal is: what’s legal. And I stand by my earlier statement that the big money is in running up the tab on the privately insured, not in Medicare. On private insurers’ margins, I’ve never subscribed to the populist garbage about obscene profits. Uwe Reinhardt had an excellent analysis of the Wellpoint 10K the other day in the New York Times. Health insurance is actually not a very good business. Many of these firms would be a lot more profitable if they were better managed, and eliminated a lot of the paper and clerical overburden, and if they were more aggressive in bargaining with providers. Since the same companies process Medicare claims, I don’t see us escaping them. Management in both our private and public systems is mediocre and not improving. (Medicare has been without an Administrator for two years, spanning two administrations).

It’s really a waste of my time to participate in a philosophical BS argument about government=bad, private sector= good. That sort of ended after college for me. We have a mixed system. I’ve worked in both private and public sectors. If we want to cover the 55 plus population, my best case scenario is for Medicare to assume the insurance risk, and contract with well managed HMO type health plans to actually co-ordinate the care. We’ve both spend decades working in this field, Nate- 34 years in my case; I’ve spent most of my time in provider space, and have a much clearer idea than you do about where the waste is. Don’t get me started- if all you’re looking at is claims data, and in essentially one market, believe me, my friend, you don’t know what you don’t know . . .”