August 9, 2001
“Medicare spending has also risen, by 8.4 percent. The growth rate has been accelerating since increased payment rates to health care providers took effect in April. For the entire year, CBO estimates that spending for Medicare will grow by 10 percent.”
Comment: These numbers will certainly be used by those that want to “modernize” (i.e., privatize) Medicare, with the claim that the current Medicare program is inefficient. In fact, the traditional Medicare program has been much more efficient that the private Medicare HMO plans. Recent increases in Medicare spending have been only about 3 percent per year. Much of this year’s higher increase was due to intense lobbying efforts by the managed care industry. They were successful in gaining significant increases for their industry that were well in excess of the statutory limits of the Balanced Budget Act of 1997. We cannot allow the privateers to advance the claim that Medicare is inefficient, when the inefficiency lies primarily within their own industry.