I fail to see how Medicare can be considered effective and efficient when it costs about as much per capita as what other countries pay to cover everyone, it covers less than 1/6 of the population, and only covers about half the total health care costs of the covered population.

It may be better than the private US healthcare system, but that's not saying much.

Medicare has to do business with US providers, so of course it's still going to be more expensive than in a civilized country. According to your numbers, the tax burden relative to the level of service is at most about 12 times worse than other countries, though the fact that Medicare covers the people who most need expensive care means it's actually much closer to international costs. It's certainly effective in that it does provide a lot of care for a lot of people, and it's about as efficient as it can be without completely revamping the supply chain it depends on.

There is a healthcare system in the United States that does far better -- the Veterns Administration. So clearly it is not impossible.

Even leaving aside government provisioned care, there are several simple ways Medicare could use its massive purchasing power to control costs. Part A could take into account alternate available treatments and their effectiveness-adjusted-cost when determining what procedures to cover. Part B could coordinate care through a single gatekeeper physician. Part C could be eliminated, as it was a cost saving experiment that failed. Finally, Part D could negotiate with drug providers on behalf of the entire pool instead of delegating negotiation to dozens of insurance companies, each with smaller pools.

The VA does a better job because they actually run their own hospitals and clinics. That makes a huge difference - they can directly control many of the costs, and can wield their negotiating power far more effectively than Medicare is currently allowed to.

I certainly agree that much of the blame for Medicare not being better than it is lies with Congress, which seems to be the upshot of your comment.

I sympathise completely with your overall point, but it's worth pointing out that the per-capita comparison isn't completely fair - Medicare covers the elderly, a group that have tremendously high per-capita costs relative to most of the rest of the population.

This isn't to say that the system isn't massively inefficient, just that it's maybe not quite as bad as that stat suggests :-)

When he says "per capita" he's talking about the total population of the country.

That is, lots of European countries cover their entire populations with a budget of around $2000 per citizen per year. Medicare/Medicaid have a budget over $2000 for every citizen per year -- 300 million people * $2000 = $600 Billion.

(In 2010, Medicare had a budget of $453 Billion, and Medicaid has $290 Billion.)

When people call Medicare efficient, it may mean "they spend little money on overhead," but that's very different than spending it well.

Yeah, I realise that - perhaps my response was unclear.

What I mean is, when people say "Medicare costs the US more per member of the population (covered or not) than the UK, even though it only covers 1/6th of the population" the stat is unfairly biased - because the segment of the population that medicare covers is the segment that requires by far the most healthcare.

The stat would be dramatically improved if we accounted not by percentage of the population covered, but instead by percentage of healthcare resources used.

The efficiency of Medicare is often overstated. Medicare spends a lot per patient, which makes administrative costs a smaller percentage of total spending. And some administrative tasks are handled by other government agencies, but many calculations of Medicare efficiency don't include those.

Additionally, there's a not insubstantial chunk of Medicare spending that's essentially fraudulent, and that no "real" insurance company would pay, but Medicare lacks the "overhead" to do much about all but the most egregious cases.

Why else did you think there were so many daytime TV ads for "free" scooters before Medicare cracked down? And that's just one example.

They are heavily regulating it.

If you ask some people they would say "everything is screwed up because govt is regulating it" others say "everything is screwed up because they are not involved enough with it". I lean towards the latter, but I can buy the argument from the other side as well perhaps.

When there's a battle of opinions between "they're regulating too much" and "they're regulating to little", my presumption is the actual answer is "they're regulating it in the wrong way".