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Coming off a week-long bout with Covid and a five day stay in the hospital, I’m waiting for the bill.
In most of the industrialized world, there would be no bill.
When I retired from teaching in Illinois ten years ago I had the choice of Original Medicare or a Medicare Advantage program, negotiated by the state with a subsidy from the state.
Interestingly, Illinois Governor JB Pritzker has reduced the state’s contribution to the subsidy in this year’s budget.
It seemed a no-brainer to me. I chose Medicare Advantage.
But there is a larger issue beyond my own particular choice.
Most retirees don’t get a subsidy for their healthcare insurance.
Traditional Medicare (also often called Original Medicare) is a fee-for-service program.
Go to a doctor and the doctor submits the bill to Medicare.
Medicare Advantage is a private managed-care which offers an all-in-one package.
Medicare Advantage plans usually require we use healthcare providers in their networks, and they make decisions that affect how and where you'll receive care.
Nearly half of all of those enrolled in Medicare now are in privatized for-profit Medicare Advantage.
If the Biden Administration gets their way everyone will be in a privatized Medicare Advantage-like system by the end of the decade.
Your consent is not asked for or required.
Is this the best way to deliver healthcare?
Not if you’re the patient.
Defenders note that ACOs are healthcare organizations--typically, a large physician practice group--not insurance companies. But the question here is about the ownership of these ACOs. There's been a surge of investment in ACO groups by private equity firms and insurance companies, leading some experts to suggest that there is a "Medicare Gold Rush." Investors are banking on the projected growth in Medicare enrollment resulting from the nation's aging population and rising healthcare spending. Much of the investment activity is coming from special-purpose acquisition companies, or SPACs, private equity firms and health insurance companies already dominant in the Advantage business.
These businesses are investing to make a profit, of course. That is done through a "capitation" model: The ACO (or Advantage plan) receives a set dollar amount per patient annually, no matter how much healthcare that patient utilizes. Profit is generated through managed-care techniques, which can include limiting access to services deemed unnecessary and using financial incentives to encourage use of in-network providers. That, in turn, limits patient choice.
Traditional Medicare is the gold standard of coverage: It allows beneficiaries to visit nearly any healthcare provider in the United States, a feature that has become extremely hard to find in any health insurance plan and one that may be a matter of life and death if you receive a diagnosis of a serious illness and want to seek out care from a top-rated specialist or facility that may not be in your managed-care network.
They call it a capitation model.
It sounds more like a decapitation to me.