Monday, July 6, 2009

Help Expose Lies! Heritage Foundation - Not Real Research & David Broder Changes "Tune" on Diddling Politicians

Paul Krugman, our economics-explaining hero goes to the heart of the problem (before we go any deeper into the "Land of the Lost" in being able to determine propaganda from true research) in the duel between the healthcare providers/insurers and the public who want lower prices and better care (and not to lose their insurance once they actually need to use it for serious afflictions).

Whenever you encounter “research” from the Heritage Foundation, you always have to bear in mind that Heritage isn’t really a think tank; it’s a propaganda shop. Everything it says is automatically suspect. Greg Mankiw forgets this rule, and approvingly (yes, it’s obvious he approves -no wiggling out) links to a recent Heritage attempt to explain away Medicare’s low administrative costs:

Naturally, Medicare beneficiaries need, on average, more health care services than those who are privately insured. Yet the bulk of administrative costs are incurred on a fixed program-level or a per-beneficiary basis. Expressing administrative costs as a percentage of total costs makes Medicare’s administrative costs appear lower not because Medicare is necessarily more efficient but merely because its administrative costs are spread over a larger base of actual health care costs. When administrative costs are compared on a per-person basis, the picture changes. In 2005, Medicare’s administrative costs were $509 per primary beneficiary, compared to private-sector administrative costs of $453.

Well, whaddya know — this is an old argument, and has been thoroughly refuted. Jacob Hacker:
These administrative spending numbers have been challenged on the grounds that they exclude some aspects of Medicare’s administrative costs, such as the expenses of collecting Medicare premiums and payroll taxes, and because Medicare’s larger average claims because of its older enrollees make its administrative costs look smaller relative to private plan costs than they really are. However, the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage. This is a near perfect “apples to apples” comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.) The CBO study suggests that even in the context of basic insurance reforms, such as guaranteed issue and renewability, private plans’ administrative costs are higher than the administrative costs of public insurance. The experience of private plans within FEHBP carries the same conclusion. Under FEHBP, the administrative costs of Preferred Provider Organizations (PPOs) average 7 percent, not counting the costs of federal agencies to administer enrollment of employees. Health Maintenance Organizations (HMOs) participating in FEHBP have administrative costs of 10 to 12 percent. In international perspective, the United States spends nearly six times as much per capita on health care administration as the average for Organization for Economic Cooperation and Development (OECD) nations. Nearly all of this discrepancy is due to the sales, marketing, and underwriting activities of our highly fragmented framework of private insurance, with its diverse billing and review practices.
You should always remember: 1. Don’t believe anything Heritage says. 2. If you find what Heritage is saying plausible, remember rule 1.
Thanks, Paul!!!! And as for David Broder . . . remember a long time ago when he used to be called "The Dean" of reporters (before his exposure as having been bought-and-paid-for-outright by the Rethuglicans (h/t to Crooks and Liars who are struck by the difference in Broder's tone from his coverage of Bill Clinton's infidelities))?. Broder wrote this about Clinton in the Washington (Republican Propaganda) Post. The Post published an article back during the initial Clinton madness by Sally Quinn (very much an insider - being married to the Post's now Vice President (previously Executive Editor) Ben Bradlee) that stated plainly the different treatment according outsiders (which continues today). What a difference ten years can make. Of course, it has nothing to do with Sanford being a Republican, does it, Dean Broder?

Naaaah. Suzan _________________

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