I hope when he tells America how he aims to tame future budget deficits the President doesn’t accept conventional Wasington wisdom that the biggest problem in the federal budget is Medicare (and its poor cousin Medicaid).

Medicare isn’t the problem. It’s the solution.

The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years – less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI’s, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There’s not much money in physical therapy.

Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you’re back there within a month. You wouldn’t be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don’t nurses do home visits to Americans with acute conditions? Hospitals aren’t paid for it.

America spends $30 billion a year fixing medical errors – the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.

Meanwhile, administrative costs eat up 15 to 30 percent of all healthcare spending in the United States. That’s twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.

A major occupational category at most hospitals is “billing clerk.” A third of nursing hours are devoted to documenting what’s happened so insurers have proof.

Trying to slow the rise in Medicare costs doesn’t deal with any of this. It will just limit the amounts seniors can spend, which means less care. As a practical matter it means more political battles, as seniors – whose clout will grow as boomers are added to the ranks – demand the limits be increased. (If you thought the demagoguery over “death panels” was bad, you ain’t seen nothin’ yet.)

Paul Ryan’s plan – to give seniors vouchers they can cash in with private for-profit insurers — would be even worse. It would funnel money into the hands of for-profit insurers, whose administrative costs are far higher than Medicare.

So what’s the answer? For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

In addition, allow Medicare – and its poor cousin Medicaid – to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.

Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.

Let me say it again: Medicare isn’t the problem. It’s the solution.

Robert Reich served as the 22nd United States Secretary of Labor under President William Jefferson Clinton from 1992 to 1997.  He blogs regularly at Robert Reich, where this post first appeared.

200 Responses for “Why Medicare Isn’t the Problem, It’s the Solution”

  1. Cheryl Simmons says:

    car games, cargames.lc
    A smokeless powder consisting of nitrocellulose that has been extruded in cords

  2. Carolyn Perry says:

    POlar heating Inc, cheap ac repair show low az, showlowheatingandairconditioning.com
    Heating & Air conditioning Services, Air Conditioner Repair & Install Furnace Repair & Install Polar Heating Inc. in Show Low, Pinetop, Lakeside, Snowflake, Taylor, Heber
    ac repair show low az, ac repair services

  3. Ronald Allen says:

    find divorce lawyer, professional lawyer riverside ca, California Mediation Solution
    Divorce Attorney and Certified Divorce Mediator, Laura Rosauer, in Riverside, CA providing mediation for a more affordable divorce solution that keeps you out of court. Even with complex custody issues, mediation from an attorney can save you time and money.
    californiamediationsolutions.com, divorce lawyer riverside ca

  4. Richard Lee says:

    find hotel palm springs, indianwellsresort.com, luxury hotel palm springs
    Indian Wells Resort is one of the best hotels in Palm Springs California. A true boutique hotel with luxury accommodations, golf vacations, and restaurant… 1-888-714-0060
    Indian Wells Resort Hotel, best luxury hotel

  5. Debra Sanchez says:

    High Traffic Academy, Web, Money, Massive, Dave Wood, BIM, Blog, Traffic
    I’ll show you exactly what I did to earn $710K in less than 30 days. Right now this pulls $12,485 per DAY on average. And it wasn’t a “launch” of any kind… No JV partners. No affiliates. Heck, we didn’t even have a website or our own product… And we spent exactly $0 on marketing! Average, ordinary folks are making thousands DAILY after watching this training and the best part is it’s 100% FREE and there is nothing for sale. Model this for YOUR business and prosper. It WORKS.
    Dave Sharpe, Vick Strizheus, Empower Network, Big Idea Mastermind, Online, Cash, Fast, Earn

  6. Mary Smith says:

    cheap party magician, Birthday Party Magician, jmmagic.com
    John Measner Magic |birthday, john measner | Birthday Party Magician
    John Measner Magic, professional Birthday Party Magician

  7. Martha Phillips says:

    find Health Insurance Agency, Triangle Health Plans, get health insurance
    Instant Health and Life Insurance quotes for Raleigh NC and all of North Carolina. Long Term Care, Vision and Dental Insurance too.
    trianglehealthplans.com, Health Insurance Agency

  8. Daniel Jones says:

    cheap boat rental, ozarks boat rental, Iguana Water Sports
    Boat rental lake of the Ozarks- Call Us 1-888-773-2199 Iguana Water Sports rental offer Lake of the Ozarks boat rentals at the Lake of the Ozarks. Make your trip to Lake of the Ozarks condo rentals even more enjoyable. There are many choices for boat rental at Lake of the Ozarks. It includes Lake of the Ozarks Boat Rentals, Lake of the Ozarks vacation rentals, Lake of the Ozarks vacation rental, ozarks vacation etc.
    best ozarks boat rental, iguanawatersports.com

  9. Margaret Moore says:

    vitaleisurepoolandspa.ca, pool supplies, buy pool supplies
    Vita Leisure Pool and Spa | Hot Tubs | 519-969-5238 | Fireplaces Windsor
    online pool supplies, Vita Leisure Pool and Spa

  10. Craig Harris says:

    veterinary hospitals scottsdale, near veterinary hospitals scottsdale, hopianimalhospital.com
    Scottsdale Veterinarians, Scottsdale Animal Hospital, Hopi Animal Hospital
    hopi animal hospital, affordable veterinary hospitals

  11. Michael Smith says:

    head shot photographer Dana Point, quality Photographer Dana POint, Jack Randall Photography
    Jack Randall provides professional wedding, engagement, portrait and event photography to all of Orange County, including Laguna Beach, Newport Beach and Dana Point as well as San Diego. We commonly shoot St. Regis Monarch Beach, Montage and the Ritz-Carlton.
    jackrandallphotography.com, head shot photographer Dana Point online

  12. Mary Foster says:

    myob hints, creating a new payroll category
    In this video we will look at how to create a new payroll category in MYOB and assign individuals to that new category.
    myob payroll category, myob tips

  13. Larry Evans says:

    online wholesale clothing women, wholesale clothing women, cheap wholesale clothing women
    Wholesale Dropshipper Directory. Are you are searching for the right product and supplier for your online store or brick and mortar storefront, but just have not been able to find it? Are you looking to make a large profit from selling products online, but can
    wholesalelookup.com, wholesale lookup

  14. Frank Phillips says:

    teen, teen webcams, webcam teens, lolita cams, young
    Webcam Chat with hot teens, they all have HD cams to have webcam sex
    slut, teens, teen cams, lolita, lolita cam

  15. Peter Davis says:

    make money online fast, passive income opportunities, passive income opportunity
    How to get unlimited $20 bills stuffed in your mailbox or Paypal account, without having to pay a dime, and without selling a thing!
    make money online free, ways to make money online

  16. Ronald Garcia says:

    Money Mailer Direct Mail, online direct advertising, direct advertising
    Direct mail made easy. Complete direct mail services nationwide. Letters, postcards, coupons, mailing house, printing, mailing lists, bulk mail.
    moneymailercarmichaelfairoaks.com, direct advertising help

  17. Jeffrey Brooks says:

    Rice Camera Technologies, best industrial camera, affordable industrial camera
    Rice Camera Technologies Home Page, supplier of CCD, CMOS, and infrared cameras for military imaging, scientific, and Industrial inspection, Unique IR, Military Cameras, hyperspectral, machine vision, megapixel, CameraLink, GigE Vision, and NIR-SWIR imagers
    industrial camera, ricecamera.com

  18. Christopher Anderson says:

    online real estate laguna beach, Old Newport Realty, real estate laguna beach
    Old Newport Realty | Newport Beach Real Estate | (949) 298-4888
    oldnewportrealty.com, real estate for sale

  19. Julie Nelson says:

    cheap auto insurance, best insurance Jacksonville Fl, FL Home Quotes
    FLHomeQuotes.com – Free online FL homeowners insurance quotes. Call Matt Moss for a FAST Florida home quote and start saving on your Florida home insurance now!
    flhomequotes.com, auto insurance Jacksonville Fl

  20. Ann Price says:

    market investor, stock trends, wealth timing
    Learn about stock market and gain investment tips.
    stock market, timing signal

  21. Richard Sanders says:

    stock trends, timing signal, market investor
    Learn about stock market and gain investment tips.
    wealth timing, stock market

  22. Kevin Smith says:

    timing signal, stock market, market investor
    Learn about stock market and gain investment tips.
    wealth timing, stock trends

  23. Shawn Parker says:

    stock trends, wealth timing, timing signal
    Learn about stock market and gain investment tips.
    stock market, market investor

  24. James Parker says:

    review of professional massage tables, massage table review
    When it comes time to purchase a massage table, if you are like me you spend countless hours doing your research on what you need in a table, and where is the best place to purchase this table from. After all, We want the table to last us for years to come.
    massage tables review

  25. Mary Jones says:

    The Art & Science of Making High Ticket Commissions Online, home business, matt lloyd, virgilio clemente jr
    Direct From The Stage: The Art & Science of Making High Ticket Commissions Online.. Without Even Picking Up The Phone!
    my online business empire, my top tier business, 2013, video

  26. Matthew Sanchez says:

    styvesphotos.com, Stevesphotos, photographers ottawa
    Professional Portrait photographer Ottawa executive photography. headshots. commercial business portrait corporate event photographer real estate Call Steve (613)8638519 for
    photographers ottawa website, professional photographers ottawa

  27. John Perez says:

    ac service Pasadena, air conditioning contractor Friendswood, air conditioning service League City
    Need immediate air conditioning or heating service-repair? Call Vanderford Air today at 281-724-7578. Free estimates for a/c replacement.
    air conditioning repair Pearland, HVAC service Galveston

  28. Joseph Alexander says:

    click here, medisoft v19, document for medical billing software
    Medisoft Software can serve to help you handle the transformations. With Medisoft v19, you can take benefit of several features that are created to minimize manual entry and minimize the complexness of ICD-9 to ICD-10 mapping. With this release, medicinal office and clinics will be able to:.
    website, more info

  29. Patricia Anderson says:

    Money Mailer Direct Mail, direct advertising, online direct advertising
    Direct mail made easy. Complete direct mail services nationwide. Letters, postcards, coupons, mailing house, printing, mailing lists, bulk mail.
    direct advertising help, moneymailercarmichaelfairoaks.com

  30. David Scott says:

    fencing panels, garden fencing, lattice wooden fence panels
    Farmac Timber & Building Resources present you with a variety of fencing products – fence panels, lattice, gates, timber posts and materials, fence supports and fixings, and much more. Based in Pudsey, Farmac deliver to Leeds, Bradford, Halifax, Wakefield and Huddersfield.
    wooden fencing, wood fence panels

  31. James Lopez says:

    first aid kit, survival kit, doomsday prepper, prepping supplies
    Tactical survival gear-Survival and Prepping are in huge demand and this is your chance to prepare yourself and your family from doomsday! Outdoors and survival guide will help you find the right tool, kit, gear, equipment, first aid and food for you to be prepared!
    outdoor survival guide, survival and prepping, wilderness

  32. Patrick Roberts says:

    dentist Nepean, Merivale dentist, Adel Sidaros
    At our practice, we believe that excellent dental care is achieved by offering patients choices. We endeavour at all times to inform and educate you, so you can select a course of treatment that suits your needs and lifestyle.
    dentist ottawa, cosmetic dentist ottawa

  33. Dorothy Bryant says:

    Secure Paper Shredding, Document Shredding
    PROSHRED provides paper shredding services in Ga for business, medial, financial, legal, office at home and residential shredding requirements. Call for a free estimate.
    Paper Shredding

  34. Patricia Hernandez says:

    yourprofitweb, your profit web, on line reputation marketing
    On Line Reputation Management Company Services – YourProfitWeb
    on line reputation services, on line reputation management, on line reputation company

  35. John Young says:

    Free Software To Build Your List, subscriber
    Start Building A Quality Email List With This Amazing Free Software
    List Building Software, Build Your Email List

  36. Jamie says:

    Thanks for the article. It will be interesting to see how this all shakes out in the coming months. Time will tell.

  37. Kevin Young says:

    seattle dentist, seattle best dentist, downtown seattle dentist
    The Best Dentist Seattle – A Directory of Dental Professionals and Services In Seattle, Bellevue, and King County
    find dentist seattle, best seattle dentist

  38. Donald Wilson says:

    work from home, facebook, home based business, mobe
    Get $1,000, $3,000 & $5,000 Commissions Deposited In Your Bank Account!
    mttb, matt lloyd, business seekers

  39. Raymond Williams says:

    urgence vétérinaire genève, sos vétérinaire de garde genève
    Vétérinaire de Garde à 15 min du Centre de Genève 022/ 755 57 57 – 24h/ 24
    veterinaire de garde geneve

  40. Mary White says:

    veterinaire de garde geneve, sos vétérinaire de garde genève
    Vétérinaire de Garde à 15 min du Centre de Genève 022/ 755 57 57 – 24h/ 24
    urgence vétérinaire genève

  41. Kathryn Smith says:

    sos vétérinaire de garde genève, veterinaire de garde geneve
    15 minutes du centre de Gen̬ve РParking r̩serv̩, urgences 24h/24,Service de qualit̩ pour vos chiens et chats
    urgence vétérinaire genève

  42. Mildred Ward says:

    urgence vétérinaire Nyon, veterinaire de garde Nyon
    Vétérinaire 24h/24 Nyon et environs
    022/ 755 57 57
    sos vétérinaire de garde Nyon

  43. Joseph Cooper says:

    Student Discounts, ASE certified, AAA approved
    We understand motor vehicles are not immortal. They would soon break down and be requiring a decent auto repair service. That’s the reason why it’s necessary to send the auto to an established support center to obtain the best results.
    Auto Repair, Car Repair

  44. I guess this is my first visit here and I always love it. I am going to be a frequent visitor here. Love your writing style. Thanks for this wonderful tips. Even though I am not very good with writing I can see where you are going with the suggestions.

Leave a Reply


Founder & Publisher

Executive Editor

Editor, Business of Healthcare

Contributing Editor

Contributing Editor

Business Development

Editor-At-Large, Wellness

Editor-At-Large, Europe



The Health Care Blog (THCB) is based in San Francisco. We were founded in 2003 by Matthew Holt. John Irvine joined a year later and now runs the site.


Interview Requests + Bookings. We like to talk. E-mail us.

Yes. We're looking for bloggers. Send us your posts.

Breaking health care story? Drop us an e-mail.


We frequently accept crossposts from smaller blogs and major U.S. and International publications. You'll need syndication rights. Email a link to your submission.


Op-eds. Crossposts. Columns. Great ideas for improving the health care system. Pitches for healthcare-focused startups and business.Write ups of original research. Reviews of new healthcare products and startups. Data-driven analysis of health care trends. Policy proposals. E-mail us a copy of your piece in the body of your email or as a Google Doc. No phone calls please!


Healthcare focused e-books and videos for distribution via THCB and other channels like Amazon and Smashwords. Want to get involved? Send us a note telling us what you have in mind. Proposals should be no more than one page in length.

If you've healthcare professional or consumer and have had a recent experience with the U.S. health care system, either for good or bad, that you want the world to know about, tell us about it. Have a good health care story you think we should know about? Send story ideas and tips to editor@thehealthcareblog.com.

REPRINTS Questions on reprints, permissions and syndication to ad_sales@thehealthcareblog.com.



Affordable Care Act
Business of Health Care
National health policy
Life on the front lines
Practice management
Hospital managment
Health plans
Specialty practice
Emergency Medicine
Quality, Costs
Medical education
Med School
Public Health

Electronic medical records
Accountable care organizations
Meaningful use
Online Communities
Open Source
Social media
Tips and Tricks


Health 2.0
Log in - Powered by WordPress.