However, Scott Gottleib points out in the June 24, 2008 Wall Street Journal that this only works because of state-enforced cost-shifting onto physicians and other private parties:
Medicare doesn't need to hire doctors to weigh individual medical cases because it uses formulaic rules made in Washington to set broad and inflexible restrictions on medical practice. Nor does the program need to hire clinical staff to monitor compliance. It passes costs for that on to the broader health-care system by backing up its rules with the threat of costly civil and even criminal sanctions. Providers and medical product developers spend hundreds of millions of dollars on systems, personnel and paperwork to ensure compliance with Medicare's sticky morass of regulations – tasks made more expensive by the fuzziness of the program's regulations and the arbitrary way they are enforced.As a practicing physician, I've seen first-hand the headaches our office staff have to go through in order to comply with all the arcane bureaucratic Medicare paperwork requirements. But this rarely gets mentioned in most analyses.
Via David Catron, who notes:
In reality, Medicare’s true admin costs are higher that those of the private health care industry. But Medicare can use the power of the federal government to force someone else (providers and patients) to pay them.
