Another factor is just a direct cut in the amount of money that is spent on Medicare - from what I've been able to gather, Medicare has some system where the government tells hospitals how much it will pay for various procedures, and they just have to take it, ignoring how much they charge private insurers. (At the same time, it seems like doctors and hospitals are also free to reject patients whose only coverage is Medicare - I don't quite get why any of them accept them if Medicare pays so much less than private plans.)
This sounds like the flip-side of the changes in Medicare that Bush passed. From what I've heard, it's stipulated in Bush's bill that the government will pay whatever the pharmaceutical companies list as the prices they charge private insurance companies for prescription drugs. If it weren't stipulated, then the government could negotiate a lower price, since it has the largest block of customers that each pharmaceutical company would want to be the one to profit off of. In other words, it would be kind of like having a consumer league or a labor union... if it's big enough, you can come closer to "dictating" your price. But of course, that would be bad for the drug companies, so Bush didn't do it that way--he chose the more expensive route. I wonder if the rest of Medicare works more like that (negotiated), or if it is actually literally dictated.
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
timeasmymeasure
no subject
Date: 2009-11-20 01:58 am (UTC)Another factor is just a direct cut in the amount of money that is spent on Medicare - from what I've been able to gather, Medicare has some system where the government tells hospitals how much it will pay for various procedures, and they just have to take it, ignoring how much they charge private insurers. (At the same time, it seems like doctors and hospitals are also free to reject patients whose only coverage is Medicare - I don't quite get why any of them accept them if Medicare pays so much less than private plans.)
This sounds like the flip-side of the changes in Medicare that Bush passed. From what I've heard, it's stipulated in Bush's bill that the government will pay whatever the pharmaceutical companies list as the prices they charge private insurance companies for prescription drugs. If it weren't stipulated, then the government could negotiate a lower price, since it has the largest block of customers that each pharmaceutical company would want to be the one to profit off of. In other words, it would be kind of like having a consumer league or a labor union... if it's big enough, you can come closer to "dictating" your price. But of course, that would be bad for the drug companies, so Bush didn't do it that way--he chose the more expensive route. I wonder if the rest of Medicare works more like that (negotiated), or if it is actually literally dictated.