Wednesday, May 27, 2009

UnitedHealth Knows How to Save $500 billion In the Medicare Program--So Why Do They Need the Extra Private Medicare Payments?

This from Erica Werner's AP story today:
A major health insurer [United Health Group] says the government can save more than $500 billion in Medicare spending by sending patients to less expensive, more efficient doctors, reducing hospital visits by the elderly and cutting down on unnecessary care.
So UnitedHealth knows how to save $500 billion in Medicare spending.

Aside from the fact that all of this is voluntary and has no consequences in it for failing to deliver it---and therefore not "scoreable" under Congressional budget rules--I have a question.

If United Health knows how to save $500 billion in Medicare costs why has it been lobbying for years to maintain the hundreds of billions of dollars in extra payments private Medicare plans--of which United is the biggest player--get from the government?

It would seem to me that if they know how to save all of this money in Medicare they wouldn't need the extra 14% the government pays United and all the other private Medicare plans above what it pays itself under the traditional Medicare plan.

The Obama administration says these extra payments to private Medicare HMOs are worth $175 billion over ten years and the private plans have about 40% of the Medicare market. Forty percent of the $500 billion these savings United says are there would therefore be in the private market--or $200 billion. So all of these great ideas United put on the table today should more than make-up for the industry giving up the extra $175 billion payments.

Am I missing something here?

Gee, next thing you know AHP will be going to the White House volunteering the $175 billion for President Obama's health care plan.

They're just coming up with extra cash all over the place!
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