Saturday, October 21, 2006

Medicare Vs. VA Healthcare Costs

I read the other day that many are pointing to the fact the Veterans Administration (VA) healthcare network provides care to veterans at 20% less cost than Medicare provides to seniors. They are pointing out that government could provide healthcare costs at considerable savings to seniors if run the same way.

As a veteran with a service connected disability, I know first hand what it is like staying over night in the Fort Wayne Medical Center. I also know what it is like to obtain treatment at the VA center in Marion, Indianapolis, Fort Wayne and Roanoke, VA. Though the VA centers have greatly improved their quality of care, the time it takes to get seen is just as long. I had to travel to Marion to get doctors authorization for treatment in Fort Wayne. I drove over 100 miles for a five-minute consultation in August. I had my MRI and EMG, over a month ago, but still do not know the results.

The problem with Medicare is that costs are paid for on a cash flow basis instead of accrual. Cash flow accounting will always result in higher costs. Pay little to nothing during your working lifetime and then when it is time to collect pass the bill to those currently working. It is the classic pyramid scheme.

The other problem with Medicare is there is no cost control on the part of the patient. They have no idea of the cost until after the service. Once you have met the deductible, it costs very little for subsequent visits. Rather like an all you can eat buffet.

One method would I recently read about used to control costs is to provide a cash out lay up front. The insured can use it to pay for the first $500 of medical bills. The next $1,000 or $1,500 the insured pays 100%. Anything after that it is split 80/20. This puts control of healthcare in the hands of the user.

However, the bottom line is that it is not the insured or company, Medicare or Medicaid that pays the cost of healthcare, it is the worker/taxpayer. If you are given $500 up front to pay for the initial cost of healthcare the money had to come from some place. It certainly did not originate with the insurance company or the government. If you think our company creates the money, you are wrong, it ultimately originates with the consumer/taxpayer.

Candidate Hayhurst states he wants affordable healthcare. We all want affordable healthcare.


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