No, the government has done pretty well at keeping costs down compared to private insurance for the same treatment, it seems. In fact, opposition to the public options includes providers for that reason.
I'm not especially well informed about the costs, so someone who is can say if any correction is needed to that, but that's what I've seen.
I meant to follow up on this discussion but some things came up, and now I missed all the fun.
But, to this particular statement, the government has not kept costs down, it has kept prices down, and it is a very big difference between the two. Costs being the actual expense of providing care, price being the amount of money given to the provider to reimburse them for the care.
It has kept prices down because it sets the fee schedule (at least from my experience, this may not be true in all cases). The government tells us what it will pay for procedures and other incidents of care, so when the government itself is setting the price I am not surprised they keep the price down.
They also have had some success with keeping costs down as well, but I don't think you want to shout the success from the mountaintops because it just has "conservative talking point" written all over it. The government is also fighting against doctors about the level of care patients should receive. (Again, personal experience, so this may not be true for all government healthcare.) If you do not know, the government is currently doing what are called "RAC audits"
http://www.cms.hhs.gov/RAC/ to recover "overpayments" of medicare. These audits are to recover money from hospitals who either defrauded the government, or provided the patient with a level of care beyond what the government regulations allow. The government has contracted out audits of our patient records. They check the record and compare the diagnosis codes against the codes for the treatments provided, each treatment is only covered if it has a valid diagnosis code to justify the treatment. The list of diagnosis codes is impressive, I browsed through our compliance list once, and it includes something like "injuries from a nuclear incident involving a train." However, the list is not complete, for example someone I know could not find a diagnosis for falling on a boat, it must be in the boat section because of the location, but she couldn't find falling. (It is a diagnosis because falling would justify things like X-rays)
In some cases, hospitals really did screw up, and they owe the government over ten million dollars. Other times, the hospitals actually acted in the best interests of the patient, and the system does not have a way to document it. However, the example we were given in our overview is probably the most common. The example is: a patient comes into the ER, elderly, flu symptoms, high risk category, but low risk symptoms. The doctor believes that the patient requires observation overnight and that her symptoms will get worse, the government tables for her symptoms only allow for observation for a few hours. Before, the hospitals would document everything, listen to the doctor, admit the patient, and bill medicare. Now, we have an extra position in the ER, this person compares the patients diagnosis to the tables, and then I have no idea what happens. I am not sure who wins if the doctor and the tables disagree, and I don't honestly know which should win. I don't believe in the great infallibility of doctors, I know they provide a great service, but in medicine they are really just making very educated guesses.
The problem is that the government is in many cases reimbursing us below the cost of the care provided. I know a few health care metrics rate a low % of medicare patients as a good financial indicator. In other areas the government may be overpaying, I know ortho cases have a good level of reimbursement, so we fight to get all of those we can. But, because the government underpays us in so many areas, the insurance companies are actually subsidizing the government payments. If the government covered it all, we could not provide the level of care we do now at the prices they pay.