(Author’s Note: Recently candidates for Congress nominated by the Democratic Socialists of America (DSA) have won primary victories in the Democratic party. These candidates support Medicare for All, the radical change in our healthcare system first advocated by socialist Vermont Senator Bernie Sanders. Medicare for All is a euphemism for socialized medicine, much like socialism is a euphemism for communism. Today I am re-publishing articles I wrote in the past explaining Medicare for All so that everyone can understand the evils of this proposal.)

9/10/18

Today we continue an explanation of the proposed legislation of socialist Senator Bernie Sanders entitled Medicare For All. Healthcare economist John C. Goodman gives us ten fundamentals you need to understand about Medicare and what it means if it were the only healthcare system available to everyone, as Senator Sanders promotes. Last post we looked at the first seven and today we pick up again with number eight.

8. The real cost of Medicare includes hidden costs imposed on doctors and taxpayers.

In number seven, we learned that Medicare For All would be costly. Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years – and probably more thereafter. Blahous also estimates that the administrative cost of private insurance is 13%, more than twice the 6% it costs to administer Medicare.

Single-payer advocates often use this administrative cost comparison to argue that universal Medicare would reduce healthcare costs. But this estimate ignores the hidden costs Medicare shifts to the providers of care, doctors and hospitals, including the enormous amount of paperwork required in order to get paid.

The Obama administration forced doctors and hospitals to implement electronic medical record system – a costly change that appears to have failed to deliver promised increases in quality or reduction in costs or medical errors. In fact, it has made it easier for doctors to “up code” and bill the government for more money. Also to be considered are the costs of collecting more taxes to fund Medicare. Some estimates put these costs as high as 25 cents on every dollar.

A Milliman  & Robertson study estimates that when all these costs are included, Medicare and Medicaid spend two-thirds more on administration than private insurance spends. Using the most conservative estimate of the social cost of collecting taxes, economist Benjamin Zycher calculates that the excess burden of a universal Medicare program would be twice as high as the administrative costs of universal private coverage.

9. Not a single problem in ObamaCare would go away under Medicare For All.

All of the difficult questions posed by ObamaCare would remain. Who would pay what? Would the premiums be actuarially fair? Would there be subsidies? Would the premiums vary by age? By health status? By income level? By health living choices?

How would employers be affected? Economists tell us that employee benefits are substitutes for wages and are therefore “paid for” by the employees. Under Medicare For All, would employers get off scot free?

Would there be an exchange? There is one now for Medicare – that’s how people enroll in Medicare Advantage plans. Like the ObamaCare exchanges, the Medicare Advantage exchange has subsidies for private insurance, mandated benefits, annual open enrollment and no discrimination based on health status.

The ObamaCare exchanges, by contrast, have been a disaster. Premiums and deductibles are skyrocketing, there are higher charges for chronic patients who need specialty drugs, and plans exclude more and more of the best doctors and hospitals. Expect more of the same with Medicare For All.

10. Medicare is already on a path to healthcare rationing.

Medicare is already in trouble. It is already on an unsustainable path with future promises made that far exceed expected revenues. When the Affordable Care Act (ObamaCare) was passed in 2010, the Medicare Trustees estimated the unfunded liability at $89 Trillion! Yet at the next trustees’ report that figure had dropped to $37 Trillion. How could that happen?

Passage of the ACA theoretically put the government’s healthcare spending on a budget. Goodman says that for the past 40 years, per capita healthcare spending has been growing at twice the rate of growth of real per capita income. At that rate it won’t take long to run out of money.

The Obama administration tried to “solve” this problem by creating an enforcement mechanism to control spending It was called the Independent Payment Advisory Board (IPAB). It was to be tasked with reducing fees for doctors and hospitals to cap spending. This unelected and unaccountable board would be able to restrict what treatments your doctor could provide with the stroke of a pen! Fortunately, IPAB was abolished this year in a bipartisan budget deal.

Goodman says expect Medicare fees to providers to continue to fall behind private sector fees in the future. This means one of two things must happen:

• Providers will respond to lower fees by providing less care to seniors
• Providers will shift costs to non-seniors in the form of higher fees, higher insurance premiums and higher state and local taxes.

The first of these options means Medicare will become more like Medicaid. Doctors will restrict access by offering fewer appointment options for Medicare patients just like they currently do for Medicaid patients. Hospitals may respond by reverting to the use of open wards instead of providing private rooms. Expensive treatments will be unavailable as cost-reducing takes precedence over patient care.

Medicare For All is socialized medicine and similar healthcare systems in other parts of the world, including Canada, Great Britain and Sweden always are plagued by restricted access and declining quality of care. Expect the same in this country.

 

(Author’s Note: Recently candidates for Congress nominated by the Democratic Socialists of America (DSA) have won primary victories in the Democratic party. These candidates support Medicare for All, the radical change in our healthcare system first advocated by socialist Vermont Senator Bernie Sanders. Medicare for All is a euphemism for socialized medicine, much like socialism is a euphemism for communism. Today I am re-publishing articles I wrote in the past explaining Medicare for All so that everyone can understand the evils of this proposal.)

9/10/18

It is the duty of every American voter to be educated on the issues. As we rapidly approach another election day in November, many Democratic candidates are touting “Medicare For All” as a solution to our failing healthcare system.

Vermont Senator and avowed socialist Bernie Sanders introduced his version of healthcare reform in 2016 when he campaigned for the presidency touting a new single-payer system he calls Medicare For All. Other Democratic candidates have jumped on Bernie’s bandwagon as a growing number of mostly young Americans favor socialism over capitalism.

Today I begin a series of posts to help readers understand what Medicare For All really means to the healthcare of Americans. To assist me in this analysis I will be relying on the excellent work of healthcare economist John C. Goodman.

Ten Things You Need to Know

Goodman gives us ten fundamentals you need to understand about Medicare and what it mean if it were the only healthcare system available to everyone, as Senator Sanders promotes.

1. Medicare is not really government insurance.

Although Medicare is mostly funded by taxpayers, it is not strictly a government system. It was formed originally by providing a standard benefit package offered by Blue Cross in 1965. It has always been privately administered, mostly by Blue Cross, that continues to provide private insurance to non-seniors. In recent years, one third of all seniors are enrolled in plans offered by private insurers such as Cigna, Humana, and United Healthcare under a cooperative program called Medicare Advantage.

2. The most successful part of Medicare is run by private insurance.

This refers to the above-mentioned Medicare Advantage program. Studies have found this program delivers higher quality care at less cost than traditional Medicare. (Choice of doctors, however, is more limited.)

3. Medicare is often the last insurer to adopt innovations that work.

Medicare started prescription drug coverage only after all the private insurers had been doing that for years. It still doesn’t pay for doctor consultations by phone, email, or Skype. It won’t pay for house calls at night or on weekends, even though the cost and the wait times are far below those of emergency rooms.

4. Medicare has wasted enormous sums on innovations that don’t work.

Medicare has spent billions on pilot programs and demonstration projects trying to find ways of lowering costs and raising the quality of care. Yet instead of finding places in the healthcare system where these techniques work (private Medicare Advantage plans), Medicare set out instead to reinvent the wheel. Medicare frequently has regulations that are counter-intuitive and wasteful, such as requiring patients to be hospitalized before they can receive home physical therapy.

5. Most seniors in conventional Medicare are participating in stealth privatization, even though they are unaware of it.

There are over 32.7 million patients enrolled in a managed care program called Accountable Care Organizations (ACOs). The Obama administration started this practice without telling seniors they were participating in a grand experiment. Not only that, but it is illegal for an ACO to tell a senior they are enrolled! Furthermore, ACOs are not achieving their intended purpose – they are neither saving money nor are they improving the quality of care.

6. There is nothing Medicare can do that employers and private insurers can’t do.

For many years the Physicians for a National Health Program argued that a single-payer health insurer would be a single buyer in the market for physicians’ services. They reasoned this would give the government the power to bargain down the fees paid to physicians. Reality, however, is that Medicare doesn’t bargain with anyone. They simply put out a price for services and doctors can either accept or reject it. Private insurers have been doing the same thing for years. This is currently bringing doctor fees down in the ObamaCare exchange market – which is why the best doctors and hospitals avoid these plans.

7. Medicare For all would be costly.

There is no such thing as a free lunch. This is one of the first lessons of adulthood. Even Bernie Sanders admits this, but only when pressed. A study by Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years. This would necessitate a minimum of a 25% payroll tax – but only if it is assume doctors and hospitals provide the same amount of care they provide today. Since Medicare rates are 40% or more below private rates, a realistic assumption is that doctors and hospitals would increase the amount of care to make up the difference. This would then require at least a 30% payroll tax.

(This post will be continued next time.)

 

Last week I told you about all the negative changes in hospital healthcare as a result of physicians leaving private practice and being employed by hospitals. (Hospital Changes Threaten Patient Care). In the 1960s only about 15% of all physicians worked for hospitals. However, in 2026 recent surveys have revealed up to 78% of physicians now work for hospitals.

This radical change has led to loss of continuity in care as private physicians are left out of treatment decisions once patients are admitted to the hospital. It has raised the cost of healthcare and diminished the quality of patient care.

But now there is evidence this trend may be reversing. Daniel Godla, reporting for thoroughcare.net says the pendulum is swinging as more and more physicians regret their decision to work for hospitals and desire to return to private practice.

Godla says a survey conducted by Bain & Co. found that “nearly 25% of physicians in health system-led organizations are contemplating a change in employers, compared to just 14% in physician-led practices.” Among those contemplating a change, 37% are seeking to transition to physician-owned settings.

Godla tells us tells us there are three reasons physicians leave private practice to be employed by hospitals:

Three Reasons Physicians Leave Private Practice

1. Physician Pay and Reimbursement Declined

A recent Medscape survey of more than 7,000 physicians across 29 specialties found that physician pay growth has been the lowest since 2011. More than half felt underpaid or not fairly paid relative to their jobs. Between 2005 and 2021, Medicare reimbursements decreased nearly 2.3%, accounting for inflation. Just last year, the 2025 Physician Fee Schedule saw average payment rates reduced by 2.93%.

2. Malpractice Insurance and Practice Cost Increases

Independent practices have been particularly impacted by reduced revenue and escalating operational costs. This includes:

• Overhead expenses
• Malpractice insurance premiums
• Staffing shortages
• Rising wage demands
• Supply chain disruptions that persist post-COVID

3. Prior Authorizations/Administrative Burdens

A 2022 survey of more than 500 physicians from independent practices found that 89% believed regulatory burdens had increased over the past year. Nearly  82% considered the prior authorization process to be very or extremely burdensome.

But now that the pendulum is swinging back, Godla gives us three reasons physicians are changing their minds:

Three Reasons Physicians Return to Private Practice

• Physicians Seeking Autonomy

A survey from NORC at the University of Chicago found that 61% of employed physicians have moderate or no autonomy to make referrals outside of their ownership system. Nearly 47% said they adjust patient treatment options to reduce costs in line with employer policies or incentives. This lack of independence is an essential aspect of the “practice of medicine.” Physicians may miss the flexibility to explore new treatment options, participate in research, and implement innovative care models.

• Physicians Seeking Adequate Pay and Profit-sharing

In Medscape’s survey, 43% of physicians reported a drop in income—despite the overall average increase—coinciding with a 2.93% cut to the CMS Physician Fee Schedule for 2025. Additionally, 62% of those surveyed believed that most physicians are underpaid today. Some physicians transition to corporate-led employment because of increases in base pay. However, while hospitals and systems may provide a level of stability, they do not offer the same long-term financial advantages as ownership or leadership in an independent practice.

• Physicians Seeking More Balance and Time Focused on Direct Patient Care

According to the Physicians Foundation, employed physicians report more inappropriate feelings of anger, fearfulness, or anxiety than independent physicians. They also convey higher levels of burnout (62%) compared to physicians working for or owning an independent practice (53%).Other research published in the Journal of the American Board of Family Medicine found that physician burnout within independent practices was only 13.5%, which is lower than for employed physicians.

All of this comes as no surprise to me. Physicians don’t like to be told how to take care of their patients by hospital employers. Hopefully, this will lead to more personal patient care, less unnecessary treatment, and overall reduced healthcare spending.