> This is usually due to the manufacturer cranking up the price really fast, but in the end they have to give the drug to the gov't for FREE
To add to what you're saying, this same effect also results in inflated prices for patients on private insurance and patients who are uninsured. When Medicare reimburses less than the direct cost of goods and services (which they do, in the aggregate), then providers have to make up the difference elsewhere.
That's why you see incredibly inflated bills for basic services. It's because private insurers and uninsured patients are in effect subsidizing Medicare through higher reimbursement rates, which get passed on to patients as higher out-of-pocket bills or higher premiums.
You're also missing the frequent abuse of the ER by medicaid members, the number of patients that go to the ER for a cold and waste everyone's time and money is way too high.
To add to what you're saying, this same effect also results in inflated prices for patients on private insurance and patients who are uninsured. When Medicare reimburses less than the direct cost of goods and services (which they do, in the aggregate), then providers have to make up the difference elsewhere.
That's why you see incredibly inflated bills for basic services. It's because private insurers and uninsured patients are in effect subsidizing Medicare through higher reimbursement rates, which get passed on to patients as higher out-of-pocket bills or higher premiums.