Last week I tried to use grant money to order a textbook off Amazon. I got an email from purchasing telling me we are no longer allowed to use Amazon to purchase items. So I had to spend $60 instead of $40 to get this goddam book from an 'approved' vendor (who hasn't shipped it yet even though its been 10 days, and they'll probably charge $20 for shipping, too). Now $20 is small potatoes, but when it comes to, say, buying a new freezer, they will rip you a new asshole. The same freezer you can buy at Best Buy for $500 will cost you $1200 from Fisher Scientific. Why? Because the government is paying, ultimately. They write the rules so we have to overspend. Health care lobbyists are the devil incarnate, and the lawmakers are their henchmen. I love the example in this piece about the $200 surgical gown that you could buy on your own and bring to the OR for about $6. So typical. People complain about government waste, but they don't complain about the laws that ensure the government is wasteful, brought to you by big business.
If anything, Medicare gets the best deals because of its huge base that it can use as leverage. TFA mentions that, among the current choices of no insurance, private insurance, and public insurance, the last option gets the best prices. The average-sales-price-plus-6%-premium rule is downright stupid, but it's only a piece of the larger puzzle. Short of a law regulating the salaries and costs of hospitals, bartering is the next best strategy for pushing down prices. Also, FTFA: That's a pretty good sign to see for an organization so closely tied to life and death.Medicare’s total management, administrative and processing expenses are about $3.8 billion for processing more than a billion claims a year worth $550 billion. That’s an overall administrative and management cost of about two-thirds of 1% of the amount of the claims, or less than $3.80 per claim.