Administrative costs largely scale by number of claims. In some plans you have to have individuals go through underwriting which would certainly be an overhead cost. In many group plans, individuals don't go through underwriting. After the individual gets into a particular plan, administrative costs largely consist of claims adjudication. Each claim that goes to the insurance company has to be examined and then either approved, denied and have a followup request for more information. Then there is the follow through based on each claim determination.
So, yes, the bulk of administrative overhead directly scales with the number of claims. Medicare/Medicaid patients tend to have more claims and more complicated claims. Since each claim has overhead that is why the per patient cost for Medicare is higher than in a lower utilization patient group. I'm not disputing the numbers put out by the Heritage Foundation. They may, for once, be correct. But their numbers don't matter if the premise is faulty. Sure, BCBS might have lower overhead per patient than Medicare. So what? Heritage would like you to believe that that is a better measure of efficiency. No one (besides you it would seem) appears to agree for the very fine reasons I laid out. Judah On Mon, Aug 24, 2009 at 5:51 PM, Gruss Gott<[email protected]> wrote: > >> Judah wrote: >> Historically, administrative overhead has been compared on the basis >> of administrative costs per dollar of claims. > > Which is a really stupid way to do it because it doesn't count taxes, > non-claims related services, but worst of all skews "efficiency" > purely by the volume of claims. > >> Pretty straight forward really. >> > > Agreed. You have no facts and they do, you have speculations and they > have data. > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Want to reach the ColdFusion community with something they want? Let them know on the House of Fusion mailing lists Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:302601 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
