qotd: Drew Altman on public versus private control of spending

The Wall Street Journal
April 16, 2015
Public vs. Private Health Insurance on Controlling Spending
By Drew Altman

The Federal Office of the Actuary in the Centers for Medicare and
Medicaid Services has charted the annual rate of increase in spending
for Medicare, Medicaid, and private health insurance. As the chart (at
the link below) shows, by cumulative growth in per capita spending,
Medicare and Medicaid have generally grown more slowly than private
insurance and are projected to continue doing so through 2023. Per
capita spending is an especially useful measure for comparing public and
private health insurance spending because it shows how much Medicare,
Medicaid, and private insurers spend on each person irrespective of the
number of people covered.

Overall… it appears that public programs control per capita spending
somewhat more effectively than private coverage does. That may be just
the opposite of what many would presume in a country where the private
market is generally expected to outperform the public sector.

Here's another way to think about it: While Medicare and Medicaid are
far from perfect, the purchasing power and policy levers available to
large public programs appear to give them an edge over our fragmented
private insurance system when it comes to controlling spending.

(Drew Altman is president and chief executive officer of the Kaiser
Family Foundation.)

http://blogs.wsj.com/washwire/2015/04/16/public-vs-private-health-insurance-on-controlling-spending/

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Comment by Don McCanne

One of the primary purposes of the Affordable Care Act was to control
health care spending. After five years, the impact on spending appears
to be negligible except for a slight decline in use of beneficial
services as a result of higher deductibles and less accessible provider
networks - exactly the wrong way to control health care spending.

The data is right out front for all the world to see: large public
programs are clearly more effective than our fragmented private
insurance system when it comes to controlling spending.

The Affordable Care Act experiment has already failed. It's time for
single payer.