5 Myths of “Medicare for All”

After four decades of working under Medicare, I am obligated to explain that “Medicare for All” won’t work as proposed.

Myth No. 1 – “Medicare for All” will save money.

Medicare’s stated administrative expense is 1.1% which is an accounting mirage. Medicare receives free services from other federal agencies (NY Times, Austin Frakt) and calculates its efficiency based on total dollars spent, rather than per beneficiary. Medicare beneficiaries are older and much more expensive than those of the privately insured. Once one corrects for these procedures, the administrative cost of Medicare resembles other private insurance. The Veterans Administration claimed it was more efficient than Medicare, while being a hornet’s nest of fraud and abuse. Federal claims of efficiency should always be suspect.

Myth No. 2 – “Medicare for All” will increase the availability of health services.

Medicare mandates are forcing doctors and nurses out of medicine. Doctors now spend 60% of their time on administrative tasks. Patients wait longer for appointments and get far less attention when seen. Facing greater responsibilities with fewer resources, the 2-year burnout rate among nurses is 30%. There will be five times more Medicare recipients, but no one to take care of them.

Myth No. 3 – “Medicare for All” will increase the availability of health services.

Rural hospitals, which serve 20% of the US population, are closing in increasing numbers. The underlying causes are refusal of states to expand Medicaid coverage and the federal government (Medicare) to create enhanced reimbursement. There will be five times more Medicare recipients, but fewer places to take care of them.

Myth No. 4 – “Medicare for All” will generate efficiencies of scale

Medicare is subject to Congressional fiat. Congress lives on the mother’s milk lobbyist’s money, which for healthcare is a billion dollars. Congress has allowed prices of US drugs, administrative salaries, physician compensation, medical tests, and medical equipment to become the most expensive in the world. As a business friend advised, the pie gets bigger every year, and the participants just slice and dice. “Medicare for All” will be a much bigger pie for Congress to sell off.

Myth No. 5 – “Medicare for All” is the right model

In the U.S., health care delivery is more complicated than any other western economy. Every layer of complexity adds another layer of cost. Each layer of regulation adds delays in innovation. The current system takes no responsibility for the simple building block of health such as nutrition, when one-third of our health expenditures are related to food consumption.

Each layer of regulation adds delays in innovation. Click To Tweet
“Medicare for All” is an attractive concept but using the current Medicare system as a model would be a mistake. The reorganization of American medicine needs the brightest minds in medicine. The best managers in medicine are going to the mega-hospital systems like Mayo Clinic or the Kaiser Foundation, and that is where better solutions are found.