Government Intervention in the Health Care Industry

Medicare is a government health insurance program administered by the federal government which primarily serves elderly recipients of Social Security. The government has chosen to outsource the processing of claims generated through Medicare to outside agencies; this was presumably done to increase service levels and decrease costs to the government. However, it has been found that many of the claims processed through these contractors have been processed incorrectly. This results in additional cost to the government not only in auditing the problems, but in incorrect claims which are either overpaid or not paid appropriately in the first place. In some cases, the actions by the contractors were considered fraudulent (Pretzer, 1999, p.ß39).

The effect of the inefficiencies and possibly fraudulent actions taken by government contractors is to increase the cost of delivering Medicare services. If the government expands its r

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164] observation that "successful planning in areas of expensive and sophisticated technology requires that the state underwrite costs, including the costs of research and development, and that it insure a market for the resulting products." Federal policies ensured that consumer demand for health care services would continue to rise, for unions were encouraged to bargain for health insurance and other nonwage "fringe benefits" in lieu of additional compensation during the wartime economy of the 1940s to slow inflationary pressures on wages. Private health insurance coverage expanded rapidly during the 1950s, prompting many critics of national health insurance to suggest that comprehensive federal reform was no longer needed [Hackey 1997]; by the mid-1950s, more than 100 million Americans were covered by private health insurance [Stevens 1971]. Health care financing during this period illustrates Galbraith's [1971, 299] observation that "the line between public and private authority in the industrial system is indistinct, and in large measure imaginary." Over the course of a decade, hospitals succeeded in securing federal subsidies for new construction projects, lowered the cost of charity care, an
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Some common words found in the essay are:
Blue Cross, Medicare Medicaid, President Clinton, Financing Administration, Hill-Burton Congress, Technology Assessment, World War, Welfare HEW, Robert Higgs, Social Security, health care, hospital industry, health providers, blue cross, health insurance, federal government's, countervailing power, blue cross plans, cross plans, health care industry, health planning, care industry, health care financing, health care policymaking, health care costs,
Approximate Word count = 9411
Approximate Pages = 38 (250 words per page)

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