Remember the brilliant words of P.J. O’Rourke: “If you think health care is expensive now, wait until you see what it costs when it’s free.” :

Medicare spends billions of dollars each year on products and services that are available at far lower prices from retail pharmacies and online stores, according to an analysis of federal data by The New York Times. The government agency has paid above-market costs for dozens of items, a comparison of Medicare figures with retail catalogs finds.

For example, last year Medicare spent more than $21 million on pumps to help older and disabled men attain erections, paying about $450 for the same device that is available online for as little as $108. Even for a simple walking cane, which can be purchased online for about $11, the government pays $20, according to government data.

These widespread price discrepancies, including those for oxygen services, have been noted in dozens of regulatory reports.

The oxygen services he mentions in the last sentence refer to the fact that I personally can go into a pharmacy and purchase a basic oxygen setup for my home, including three years worth of deliveries for around $3,500. The government pays $8,280 for the same deal. No lie.

But adjusting the budget down is dangerous when you are talking about something 43 million Americans are using. The lobbyists associated with companies that make money off Medicare only have to tell seniors that their benefits are being lowered and there is Hell to pay:

“These industries rely on a basic threat: If you mess with us, we can turn the seniors against you,” said former Senator Alan K. Simpson, Republican of Wyoming, who tried cutting Medicare payments while he was in Congress. “Angering seniors is the quickest route to political suicide.”

And:

While any industry can hire lobbyists, few can marshal tens of thousands of older citizens to accuse politicians of trying to take away their lifelines. That ability, say lawmakers and their staff members, is the real clout of home medical equipment companies and other industries that sell to the elderly.

When Congress proposed cutting oxygen payments last year, for instance, trade groups and companies began warning patients that if the law changed, there might be no one to repair their equipment or provide emergency services.

“I’m scared to death that they are going to cut us off,” said Beverly Karagin of Morning Sun, Iowa, whose husband has used oxygen equipment for about 11 years. Mrs. Karagin wrote her senators and congressman after her oxygen delivery company told her about proposed payment cuts, she said.

“If something goes wrong with the machine and Medicare won’t pay to repair it, my husband could die,” Mrs. Karagin said in an interview. “I told them that this is a matter of life and death.”

Lawmakers say such fears are unfounded. After patients take ownership of the equipment, Medicare pays for repairing machines and backup systems.

Even so, last year “our office received over a thousand phone calls from oxygen patients in two days, and all of them said they were going to die if we passed this law,” said a high-ranking Congressional staff member who requested anonymity because he was not authorized to speak to the media.

The lobbyists have a lot to lose if they change the way Medicare is funded and distributed. And those running the oxygen companies understand that better than the old folks who are used to keep the money flowing:

Other companies that sell medical equipment have also flourished. More than 114,000 home medical equipment suppliers billed Medicare last year, according to HME News, an industry newsletter. Over 1,500 of them collected more than $1 million. One of the largest oxygen equipment suppliers, the publicly traded Lincare, collected over $789 million from Medicare last year, according to corporate filings.

Large private investment firms have also jumped in. Welsh, Carson, Anderson & Stowe, a $16 billion private equity group, has invested in numerous companies that profit from Medicare. One of its executives is Thomas A. Scully, who ran Medicare for almost three years, until 2003.

Thank you President Johnson for this Great Society, where my tax dollars can be taken from me and given to an oxygen peddler with an army of scared and angry elderly voters.