Can Medicare Learn from Private Insurers?

Anyone that has spent long enough working in the health industry knows that Medicare can be a slow and difficult animal. The system we are used to today is built on infrastructure from 1965, and many experts are now questioning whether it has become too cumbersome and expensive to continue in its current state.

Avik Roy is one of those experts. As an adviser to presidential candidate Mitt Romney, he has been working closely with Medicare’s more controversial aspects. “When we speak about Medicare’s problems, we usually talk about how much the program costs,” says Roy. “Medicare is, along with the other government-run health care programs, the biggest driver of the federal deficit. But Medicare also is a big driver of the inefficiencies in our health care system: wasteful spending, inappropriate procedures, and outright fraud.”

Roy’s radical solution involves treating Medicare more like modern private insurers.

One such approach would be to learn from the way insurers help administer health-care claims for large companies who “self-insure” their workers…

…Typically, these large companies will outsource the administrative function of these self-insured plans to what are called administrative services organizations or ASOs. ASOs, which are often run by actual health insurers, also tend to be much cheaper than conventional insurance.

What’s the pay off? Private insurers would now handle Medicare’s health claims, allowing them to negotiate with providers, which would bring lower prices, or improved care. For now, Roy admits, it’s just a waiting game. “It’s all speculation for now, because we don’t know what the policy possibilities will look like after November. But…We owe it to ourselves to think through the possibilities.”

Click here to read the full detail of Avik Roy’s plan on Forbes.com

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.