NCPA - National Center for Policy Analysis

Medicare Imposes Enormous Administrative Burdens

February 27, 2003

Based on outdated principles of central planning and price regulation, Medicare faces an administrative crisis. The program is governed by literally tens of thousands of pages of rules, regulations, guidelines and administrative decisions that cover virtually every aspect of the financing and delivery of medical services for America's seniors.

  • An American Medical Association survey of doctors found that more than one-third spend an hour completing Medicare paperwork for every one to four hours of patient care.
  • A similar study for the American Hospital Association found that for every hour of care delivered to a Medicare patient, hospital officials spend roughly one half-hour or more complying with Medicare paperwork.
  • In many cases, Medicare reimbursements don't begin to cover the costs of providing care to Medicare patients -- prompting growing numbers of them to refuse to accept any more such patients.

Experts advise lawmakers to pattern Medicare reforms after the model of the Federal Employees Health Benefits Program.

Moreover, they advise Congress to take two quick steps to jumpstart Medicare reform:

  • The first would allow those reaching retirement at age 65 to take their private health plan from their employer with them into retirement.
  • And allow them to take balances accumulated in health reimbursement arrangements, flexible spending accounts, and medical savings accounts into retirement to pay for medical goods and services.

Source: Robert E. Moffit (Heritage Foundation), "Medicare Needs Far More Than a Facelift," Wall Street Journal, February 20, 2003.

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