Seema Verma, administrator of the Centers for Medicare & Medicaid Services (CMS)) in a speech:
The Medicare program has extremely low administrative costs, but this isn’t exactly something to brag about. The reality is we aren’t focusing enough on critical program oversight functions like medical reviews of claims.
We review less than two tenths of a percent of the over 1 billion claims that Medicare receives a year. Given the scope and size of the Medicare program, that is ridiculously low. We also lack adequate legal authority to do the types of prior authorization reviews that have become routine in the private sector, leading to a high frequency of improper payments, and more fraud and abuse.
Doctors receive less from their Medicare reimbursement than they do from private insurance for the same services. In essence, 170 million Americans in private insurance subsidize the care provided to 60 million Americans in Medicare.
Under “Medicare for All” you either take private insurance away from those 170 million Americans, or greatly restrict access to it, meaning there is no relief valve for physicians facing up to 40 percent payment cuts.
This would decimate physician networks, creating a permanent physician shortage. It would leave medical students with no hope of paying off their loans.
Even recognizing the biased political nature of the speech, the facts in this portion of the speech are accurate. The M4A idea assumes much lower fees paid to physicians, that is, Medicare fees. There are consequences; possibly physician shortages as is the case in other countries.
The notion you can greatly expand coverage, cover all Americans and eliminate out-of-pocket costs while continuing Medicare’s hands off approach to claim processing is extremely naive. A universal health care system may attempt to controls costs by controlling fees, but there are limits and consequences. Sooner or later there must be measures to control utilization … and no proponents of Medicare for All want to talk about that.