MediCare will always lose money because we have expanded the eligibility rules to include people who haven't contributed to the system and then wonder why it loses money. Itís been turned from being prepaid health insurance into welfare. This can no longer be considered insurance because both parties are not sharing in the risk. The consumer has little risk at stake and therefore will consume more.
From my experience, four things need to be managed better to reduce cost. All three are managed fairly well by insurance companies. Iím not saying that CMS could actually accomplish these without turning it into a Charlie Foxtrot but a private company could. I do not have the time to go into detail on any of these items but all of these are done poorly or not at all by CMS.
Healthcare Coordination: There really is no management of healthcare for MediCare clients currently in place. Currently, CMS relies on the clientís primary healthcare provider for this. That provider normally would not have the resources or expertise to perform this function plus there is no incentive for that physician to provide this free of charge.
Pharmaceutical Medicine Coordination: CMS has made a cursory attempt at this by flagging medications that can be bought in bulk to save cost. They donít however warn of medicine conflicts or even attempt to determine if there is a cheaper, more efficient way of getting the desired results with less medicine. Additionally, if the client only uses a single pharmacy, normally the pharmacy will do some of this for the client.
Eligible Expenses: Eligible expenses should be limited to conditions and procedures that are medically necessary, remedy healthcare, or meant to relieve pain. Elective surgery or treatment (not medically necessary) are not covered expenses. Examples are cosmetic treatment, experimental and investigational care, anything that has to do with fertility or sexual performance, hearing aides, TMJ, sclerotherapy, etcÖ..
Fraud Detection and Investigation: This would probably save the most of any of my suggestions. In the insurance industry, if an insurance company suspects that a fraudulent claim has been submitted, it is turned over to the authorities. The insurance company will inform the provider that fraud is suspected and, if the provider cannot justify the charges, normally the insurance company will tell the provider that it will not accept any further claims submitted by him. This is regardless of any legal remedies that may or may not occur. MediCare allows the courts to decide if fraud was committed. If the provider makes restitution, normally they are allowed to continue to submitted claims to MediCare. That my friends is a poor business decision. The business relationship between provider and insured and insurer is voluntary. If any party wants to stop doing business with any one of the other parties then they are free to do so. Medicare should function the same. There is a reason that fraud doesnít affect insurance companies as much as it does MediCare. The insurance companies will not tolerate fraud but MediCare will.