The “R” Word
“Lies and distortions,” says David Axelrod. “The 26 lies about H.R. 3200,” headlines an Annenberg report. “The Five Biggest Lies About Health Reform,” is the lead in a Newsweek article.
You would think we were living in some foreign country.
There are many contentious issues, of course. But towering above all others, THE ISSUE is denying people care. Or, if you like, health care rationing.
At the National Center for Policy Analysis we have brought this issue up frequently — but, I believe, in a responsible way. For that matter, Barack Obama has brought the issue up frequently — also in a responsible way.
Yet what is driving the defenders of Obama Care crazy is that this issue is being discussed at all. For one thing, the President is saying things most Democrats never say when they talk about health care. For another, the opponents have passed up not a single opportunity to distort and exaggerate to the hilt. To get one absurd statement out of the way, let’s admit that none of the bills before Congress contain the words “death panel.”
Still, is there something here we should be worried about? Answer: Yes. You should be very worried.
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President Obama’s view of how to control health care costs. His own grandmother probably didn’t need the hip replacement she received, the President opined on one occasion. “Maybe you’re better off not having the surgery, but taking the painkiller,” he told another audience. We’re only talking about eliminating care that is unnecessary, he told a national television audience at the ABC infomercial in June.
President Obama was more explicit in his speech to the American Medical Association. Patients are getting too many tests, too many exams and too many services of all types, he said. Office of Management and Budget Director Peter Orszag says we could lower health care spending by one-third nationwide if doctors everywhere practiced medicine as efficiently as the lowest spending regions.
Here’s the bottom line. Barack Obama really does want to come between you and your doctor. More precisely, he wants to change the way your doctor practices medicine. In the Administration’s ideal world, you would get all the health care you need. Only unnecessary or futile care would be eliminated. But that’s what the Canadian government, the British government and just about every other government in the world says. To state the obvious, the public clearly does not trust the Administration to get it right.
How rationing will be done under Obama Care. As I explained in a recent National Review editorial, rationing Obama-style will be done indirectly. It will be the result of administrative decisions — all ostensibly made for the best of reasons: to eliminate futile and unnecessary care. Here’s how it will work:
Under Medicare, the Administration is seeking the authority to make decisions on reimbursing providers through an independent commission. The federal government will use the power of the purse to force doctors to change the way they practice medicine. There will be fewer CAT scans, fewer MRI scans, fewer blood tests and fewer operations for the simple reason that Medicare will quit paying for procedures it considers questionable.
But how do we know that the scan or the test not ordered isn’t in reality life-saving? We don’t. In the very act of trying to change how doctors practice medicine from the payer side of the market, we run the real risk that quality of care will be sacrificed. And remember: the rule makers in Washington — far away from practicing doctors and real patients — will be under constant pressure to keep spending down.
Medicaid (for the poor) could be pressured in the same way as Medicare (for the elderly and disabled). But what about private health plans?
Under Obama Care, everyone who does not get health care from an employer will be required to obtain it in a health insurance exchange. The plans will be free to set their own premiums, but they will have to charge all enrollees the same price — regardless of health status. Because some plans will attract a greater percentage of sick enrollees than others, a government administrator will have the power to “tax” plans with healthier enrollees in order to subsidize plans with sicker enrollees in a process called “risk adjustment.” And it is precisely through such adjustments that the government will have enormous power to influence what is done for the sick.
For example, suppose a plan attracts an above-average number of people whose doctors say they need hip replacements and ask the government risk adjustor for an extra payment to cover the cost. The risk adjustor may decide these hip replacements constitute “unnecessary care” or “futile care” and deny the request. In this way, the risk adjustor will have the power to indirectly force health plans to deny people care.
The government risk adjustor will be aided in this effort by a national health board which will be doing “comparative effectiveness” analyses. If the health board decides that a certain type of hip replacement in certain circumstances is “unnecessary” or “futile,” this will be prima facie cover for the risk adjustor to deny payments and for the health plan to deny care.
What is the difference between rationing and eliminating unnecessary care? As a practical matter, there isn’t much. Rarely does a doctor intentionally give a patient unnecessary care. That’s malpractice. But there is a lot of care that is of marginal value. A great many MRI scans, blood tests, other diagnostic procedures and even a lot of surgeries cost a lot more than any value they create for patients. However, getting rid of them through rules established by payers would almost certainly constitute a form of rationing.
For example, “comparative effectiveness” in Britain means comparing the number of extra years of life that are produced by a procedure/test/drug/etc. to the cost. The rule of thumb currently used is: approve the procedure so long as it costs less than about $45,000 per (quality-adjusted) year of life saved.
Is it fair to bring up the writings of Zeke Emanuel and Tom Daschle? I think it is. As noted at this blog, Daschle’s book makes comparative effectiveness, as practiced by the National Institute for Health and Clinical Excellence (NICE) in Britain, the model for controlling health care costs. Obama initially chose Daschle to be his health care czar and Daschle’s co-author is the Director of the Health and Human Services Office of Health Reform. Also as noted here, Emanuel’s writings on the need to ration and how to do it reflect a state of mind. None of this is Administration policy, of course. But an enormous amount of health reform policy will be enacted administratively. So the attitudes of people in the Administration who design and carry out the reform are important and fair game.
Is there a better way? As I have argued in Congressional testimony, in an NCPA study and at this blog, waste cannot be effectively eliminated by demand-side measures. Efficiencies have to come from the supply side of the market. If providers are freed to repackage and reprice their services, they will produce higher-quality, lower-cost care without any direction from on high. Of all the examples we can point to of excellence in medical care, not a one was created by Medicare, Blue Cross, an employer, or any other third-party payer.
Burden of proof. No one knows exactly how Obama-type health reform will work. But there is one point on which everyone should agree. The burden of proof is on the Obama Administration to demonstrate how they plan to reduce health care spending without denying people high quality health care.
Very good discussion of the most important issue in the entire health reform debate.
Agree with your conclusion: We should be very, very worried.
I am in complete agreement with John on this. We should be VERRRY WORRIED about the freedom of our health care. The American Public does want health care for everyone, but they don’t realize how that will be delivered, or should I say RATIIONED.
Excellent article and discussion. Even if all of what they say and intend is to not ration and find only those truly unnecessary care items (assuming they could actually do that) there is the problem with unintended consequences and what happens well after any legislation is signed. First there are the regulations, then there are the processes, then there are the humans that have to figure out how to implement what is written. Does anyone think with the immense pressure on budgets there won’t be unintended consequences of rationing and care elimination?
What is very important as well, yet not mentioned in this article, is tort reform. Many tests are performed only to avoid litigation. Proper reform will help to eliminate much of these tests that do not add to the quality of care. Physicial costs can be reduced as malpractice insurance costs go down.
And, let us not forget the fact that patients must be their own advocates and be an active participants in their own care. Let us know the costs involved for tests and treatments and value they provide. Doctors must stop avoiding this type of dialogue with their patients and patients must stop avoiding taking responsiblity for their medical care.
excellent analysis. food for thought. i will share this with others who need more information about the health care reform debate.
Well done.
this will become government controlled through administrative fiat. we should be frightened of both what is initially introduced and what it could and likely will become. the irony is the administration is railing against a system that was largely government created and is mostly government controlled. rationing will also include physician shortages as they flee the profession.
John: you are doing such fine work. I now read it with far more concern than ever and have started passing it on to others.
I would like to hear some comments about the Oregon Prioritization List which rations care by funding more important treatments and not funding less important treatments. Thanks
I wish someone would show the current healthcare system in a pie chart or something so I could understand it. It’s hard for me to understand the problems with it, why it needs to be reformed. From my perspective it works great. I am a senior on Medicare, pay $90 a month for it and seldom see a doctor. One problem I do see is emergengy rooms being crowded with illegals but to me, this is preferrable to Obamacare. I don’t trust my government,led by socialists, to get it right.
John: You’re doing wonderful work on this issue. Keep it up!!
I was in the brain suite at Presbyterian in Dallas yesterday for brain surgery with a 78 yo patient (a friend and golf buddy I have lunch with monthly). We found a golf ball sized tumor last week in his right temporal lobe. He has a malignant glioblastoma. We may extend his life by 12-15 months after dissecting out 98% of the tumor and starting radiation and chemo…
Funny how the perspective changes when the situation is real…
John is correct to say we should be very worried….
More government control will not only result in poorer care, the next logical step is to deal with Physician pay rates, which are the highest in the world, and are the “elephant in the room”. The reasons for higher physician pay are manifold, but an important part of this is the fact that American physicians are not quasi or actual government employees.
If we get Obamacare, there will ultimately be intense pressure to control physician’s pay and inevitably regulations that will compel all doctors to accept all patients on the government plan.
Doctor’s who support single payer, universal healthcare, the public option or whatever it is called, apparently don’t realize that this is where this is all headed.
For comments on the Oregon Priority list, which features politically rationed care and has been steadily downgrading important treatments in favor of trendy ones, see the National Center for Policy Analysis’s Brief Analysis #654 on the web at http://www.ncpathinktank.org/pdfs/ba645.pdf.
Seeing how the priorities have changed is all one needs to know about how government will ration care.
Jeff Forsman is correct. I neglected to mention that the neurosurgeons’ fees are decreasing…It will be worse under ObamaCare. Physicians are starting to bypass third parties. They will never be able to make physicians work for the government unless the individual physician chooses to. If they require physicians to accept government plans, then there choice may be to walk away from their calling.
If I wanted to work for the government, I would have joined the postal service a long time ago….
We ration now. My insurance company refused to pay for the shingles vaccine just recently, even though I am supposed to get it by the guidelines.
This is why the talk of “bipartisan” work on the dems bill(s)should be discouraged by any and everyone (especially the GOP). It is not merely the “Public Option” or (co-ops), however they choose to label it, that is dangerous to the healthcare system. It is the very basis of the liberal healthcare agenda (which is to control the delivery system)that has to be defeated. How in the world could a bipartisan bill be passed that does not include a vehicle to control the process? Isn’t that like negotiating to reduce the caliber of the bullet used to shoot one between the eyes? The Dems need to own this.
And Gregory, your insurance company may deny your claim for shingles vaccine, but no one is going to fine or arrest your doctor (or you) if you pay him out of your pocket to give it to you. That may not be the case with Obama’s plan.
John you are doing great work keeping us up to date on health-care.I believe this government is leading our country towards socialists health care. Big government is bankrupting social security,medicare. Government could not run Fannie Mae, Freddie Mack nor postal department, much less Obama’s Health Care. We all need to be v-e-r-y worried about this. I for one do not trust the present this government.
I saw the disinformation campaign on C-Span tonight while taking a break from work on our new medical device.
Too many people are grossly misinformed/disinformed and I would prefer that Mr. Goodman and his radio hosts would spend more time addressing this fear rather than foment it.
Currently, health insurers skim off about 25% off the top of every private dollar we pay. That’s about $350 billion a year going to no medical provider, but merely to profits, bureaucracy, overhead, and denial at the insurers. If you’re not on Medicare or VA, you’re paying $2,000 for literally nothing but the privilege of some untrained clerk telling your doctor she can’t give you a procedure because its not covered.
Viewed differently, that’s going to total $4 trillion over 10 years that’s providing zero contribution to health.
Without changing your doctor, your medication, your hospital, your medical device, and even my new invention we could save that $4 trillion by going to Single Payer. Single Payer simply means one party reimburses all health care providers with an extremely efficient system – one that literally is more efficient than those private insurers.
Nothing in Single Payer prevents you from having “better” coverage, or special procedures, or Lexus care, you CAN have private insurance. Doctors can be paid higher reimbursements.
Too many people (such as Hugh Hewitt on TV today) want you to believe that tort reform is the solution. Less than 1%, about $25 billion, of annual healthcare spending can be traced to medical malpractice. States like California have had tort reform, litigation is reduced, but med mal insurance is still high. That indicates the problem isn’t attorneys, but insurers.
To be sure, some specialties like obstetrician have absurdly high med mal insurance rates. I’m not an attorney. As a medical device inventor my firm pays extremely high rates for our Class II medical device.
But when you compare 25 vs 350, which is bigger?
I want you to ask the insightful question: Why do they keep trying to get me angry about the 25 and never speaking about the 350?
I see our common enemy is health insurers because they literally add NO VALUE.
I have to politely disagree with Jeff Forsman that single payer is by definition bad for doctors.
I’m an inventor and entrepreneur of medical devices, and have focused on medical field for about a decade with decades of prior experience in enterprise software and electronic devices and so.
I’m going to become very wealthy with Obamacare or without. In fact, our company is going to make MORE money in Europe than in the US because they will adopt our technology sooner due to a tendency to innovate. How is that possible with European style “socialized medicine”?
In the US, 1,300 insurers determine reimbursement – how much they’re going to pay – for a procedure. Google CPT-4 and ICD-9M. Medicare also provides reimbursement and, to be sure, sets a level. Many doctors and facilities learn how to game the system.
The disinformation campaign has convinced Americans that we can’t have private businesses, a.k.a. individual doctors, if we have single reimbursement.
The contrary is more accurate. In the US, over the last two decades individual doctors have had to join together into groups to have any ability to meet the restrictions and demands of the big HMOs. They’ve had to add layers of billing and payment clerks who provide zero medical care.
Worse, if you’re uninsured those groups of doctors won’t treat you. Many doctor groups are contractually restricted by the HMOs from treating cash-paying patients-yes, naturally born Americans- like my son who was uninsured for a time.
My wife was once one of those reimbursement clerks for a doctor, and for a while I developed billing/reimbursement software, so i saw the problems from both ends.
Our health care insurance system is the problem, it’s getting worse, and it has absolutely nothing to do with doctors and patients. It’s about time people realize the insurers are not on your side.
Boscobobb: you forgot to mention that the CPT codes and indeed the entire payment system was put in place and agreed to by the AMA — which actually profits form their use. Also you forgot to mention that almost all private payers pay the way Medicare pays.
Bottom line: The problem is not the insurers or the AMA or even Medicare. It’s a third party payment system that is favored under the tax law. That’s why the NCPA is right to say that real reform involves liberating doctors, patients and eveyone else from the party payment bureaucracy.
One more response to Boscobobb: Canada essentially pays doctors the same way we pay doctors and Canada’s prblems are worse than ours even thought they have a single payer system. It doesn’t matter how many payers there are. What matters is: how easy is it for doctors and patients to agree to different packages and prices? In a single payer sysgtem is it impossible.
Boscobobb says,
“I saw the disinformation campaign on C-Span tonight while taking a break from work on our new medical device.”
That’s interesting Boscobobb. What new medical device are you working on? Is it something you are going to patent?
What an excellent explanation!
John,
You’ve been writing great stuff on the current health-care debate. I watch for it every day.
I was appalled that Keith Olbermann, who apparently hasn’t the courage to invite you on his pitiful program, used a New York Times quote of yours to the effect that we could get a bipartisan bill if we ignored the special interests. He’s never quoted you on a substantive point that I am aware of. How does the guy live with himself? (Rachel Maddow and Chris Matthews, too.)
Anyway, keep up the great work.
Bruce,
Your response about CPT/ICD9 codes are very correct. That is how the AMA gets much of their revenues…
There is a disincentive to change the business model.
Maybe that’s why less than 20% of physicians are AMA members.
As a family physician with a direct practice, I haven’t used CPT or ICD9 codes for 7 years…and I’m not worried about learning ICD 10…
I like medical devices and new technology….Boscobobb..what new device have you developed? Does it involve using CPT/ICD 9 codes?
The issue of health care rationing is a term that many have debated but few in the correct context. rationing may seem dangerous, but in reality, the only dangerous medical practices are the ones that an individual can sue for, as mal practice. Consider, during the course of an examination, a very ill patient dies. the crash cart is brought in, and medical staff try everything in their power to resusitate their patient. now technically it can be argued from logic, though impratical that the chances of reviving a patient even after a lengthy amount of time has based never has no value. thus it can be argued that it holds marginal value, after all, patients who have been dead have been revived, and chances, though incredibly slim, are at least existent. so, it can be held then that if such attempts thought futile because they are so marginally valued, because they almost never work, or help to better the patient as a whole, but still might work are therefore medically nessesary and should be held as essential prcatices for medical staff to perform. this would be, to say the least, idiotic, yet it is where the fear of rationing comes from. in addition the examples provided are highly speculative, as those proposing health care reform that is found in this bill are underlying cases in which individuals are extremely unlikely to get better or benefit from the treatment, not deny every purchaser of the plan who needs a hip replacement the care they seek. also what is higher quality care exactly as the author opined it is impossible to determine if a treatment is life saving. it is also impossible to determine high quality care. this because health care unlike, say, ones microwave, or digital television does not supply a subjective use/service. a microwave cooks food that is developed to do so, a tv displays programs. either one can be determined to be malfunctioning, or inferior to another. however health care does not work in this way. rather low cost high quality health care is a nice sentiment but not a realistic one. many factors effect the treatment of a patient including a home environment. this is why tvs and microwaves manufacturers have a department to handle product quality, while health care is presided over massive councils, boards and by extension litigators and court attourneys, because health care is complex and requires much thought. this is why health care reform is not decided in the same supply demand infastructure as products are. there is no reliable scale, just suggestions and theories that examine the circumstances and provide advice. so health care is not better managed under private companies it’s merely cost effective, as all companies develop their practices towards that standard. when it comes to health care, providers have loop holes and circumstances to protect them is it is a nessesity to have such policies. but it also means they can get away with a lot, if they are creative, even pardon the reference here-murder.
45,000 americans will die because they have no healthcare. You say this is not true. Well how many do you say have died? If you say none, your wrong. If you say one, its one to many. Its all about money and greed. Those who have it want to keep it, those who dont have it want it. I dont have insurance and will probably loose my sight in my right eye because I dont have insurance throught no fault of my own. If I was your son, daughter, or close relative, would that be ok with you. If your a republican, it probably would be.
who are these 45,000 Americans? Are they all poor? Is it a mix of income/socioeconomic levels? People do not die because they have no health insurance. They die because they may not seek treatment for something. If you get into a car accident, do you die because you have no car insurance? Name an instance where someone is turned away from a hospital for treatment. What are these 45,000 Americans dying from? Everyday I see drug companies on TV advertising that if you cannot afford medication “xyz”, contact so-and-so and they can help you. How is not having insurance not your fault? If you are denied because of a pre-existing condition why not pay for what you need yourself? Or, if this is not possible for you, many people look to charities, their communities, their churches, etc… to help pay for expensive medical procedures. What happened to personal responsibility. Why do people look to the government to solve their problems? Back in the day, people would see a physician and pay for it themselves. No insurance, no nothing. Just you and your doctor. You talk about money and greed. Did you spend $200k to go to med school, four extra years of schooling and then maybe residency? And then when you get out, you must spend more to either join an existing practice or set up your own. Then, you have to buy A LOT of insurance in case someone decides to sue you. You know, Steve Johnson, these greedy people give other people jobs. They buy products from companies who give people jobs, and in turn, many times, other people use profits to reinvest in their businesses, develop new products, new drugs, new technologies, so that someday, maybe we could save your eye. What does being a republican have to do with money and greed that hasn’t been seen on the democratic side as well. Let’s look at all of the tax evaders in Washington who are our democratic representatives. Why they are still there, I don’t know. I think that is a ridiculous accusation to infer that republicans are not charitable or compassionate. I am sorry for your eye, but I think there must be something you can do without looking for it in government. Government has its place, but not in our healthcare. There are other solutions to bringing down costs. I wonder if the healthcare bill does not pass, will they still try to go after the $900 billion in medicare waste? If this is a true statement, they should be doing something about this now, healthcare reform or no healthcare reform.
John, I have Medicare Advantage(MA) and my spouse has traditional Medicare with a supplemental Insurance program.
I have not seen any information regarding Insurance cost increases for seniors who have supplemental programs and those seniors who lose their MA and now will be forced to obtain an suppemental insurance program. What will be cost increases for those seniors as noted above?
Thank you. Phil Pfeiffer