Free Markets, Free People

Daily Archives: January 18, 2010


Hail Mary

How scared are Senate Democrats that Martha Coakley will lose the special Senate seat election in Massachussetts tomorrow?  This scared.

The White House and Democratic Congressional leaders, scrambling for a backup plan to rescue their health care legislation if Republicans win the special election in Massachusetts on Tuesday, have begun laying the groundwork to ask House Democrats to approve the Senate version of the bill and send it directly to President Obama for his signature.

Well, I’m sure if that’s gonna fly.

When the idea was suggested at a Democratic caucus meeting last week, Mr. [Bart] Stupak [D-MI] said, “It went over like a lead balloon.”

But, that was then.  This is now.


All your retirement money are belong to us

How’s that 401(k) working out for you?  Well, if the Obama administration has its way, you won’t have to worry about that any more.

Apparently, you’re too stupid and lazy to be trusted with your own retirement planning. So, what you need is for the government to “urge” you to convert your 402(k) plan to a government annuity.

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

TaxProf has a roundup of some useful links concerning this, but here’s the key takeaway:

There literally isn’t enough money in the world to float the T-notes the Treasury must issue in order to prop up our unsustainable spending path.  There are, however, about $3.6 trillion in funds just sitting in 401(k) accounts.  If the government can urge–or force–you to convert your 401(k) into T-note funded annuities, the Treasury can continue to issue those notes to float the government’s deficit.  Essentially, you’ll be converting your retirement funds into an IOU from the government…just like your social security account has already done.

This will allow the Treasury to keep borrowing money–from your retirement–in order to keep issuing more debt that they may or may not be able to pay back to you

funds intu The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.


Can Doctors Afford To Stay In Medicare?

There’s a very interesting but probably little noted piece at Fox News by Dr. C.L. Gray, who is, interestingly enough, the president of Physicians For Reform. His general premise is that while reform is needed in the medical field, what Congress is chasing is not at all the answer. And he uses Medicare as the vehicle to make his point.

I’m sure you remember the story that came out not long ago about the Mayo Clinic deciding not to take anymore Medicare patients. If you’ve been staying abreast, that’s just a very well known clinic doing what a lot of lesser known clinics and doctors have been doing for quite some time. Gray claims that Mayo lost “840 million” caring for medicare patients.

He lays the physician trend away from Medicare to two overall reasons.

The first is simple—the math:

1) For the past decade Medicare consistently paid physicians 20% less than traditional insurance companies for identical service.

2) On January 1, 2010 Washington made hidden cuts to Medicare by altering its billing codes.

3) Medicare will cut physician reimbursement by another 21% on March 1. The CBO said this cut must take place if the Senate healthcare bill was to “reduced the deficit.”

4) Even more, Congress pledged to cut Medicare by yet another $500 billion. Again, the CBO said this additional cut must take place if the Senate healthcare bill was to “reduced the deficit.”

Many physicians were operating at a loss even before this series of massive cuts. In 2008, Mayo Clinic posted an $840 million loss in caring for Medicare patients. No businesses can survive when patient care expenses exceed revenue.

No business can survive operating at a loss, and that’s essentially what has been happening with Medicare prior to “reform”. With more cuts promised by “reform” it becomes a financial “no brainer”. We’re talking about a business decision. To remain a healthy business, and all practices are businesses, that which is causing a loss and overall negative drag on revenue has to be cut out to bring the revenue flow backto positive in order for the business to survive. That’s called a profit – something it would seem the government finds distasteful.  But profit is what allows you to serve your clientele with adequate and appropriate staff, treatment and equipment.  Mayo made that decision after it surveyed the impact of that particular group of patients on its bottom line and the impact of their removal. Obviously Mayo felt that continuing to serve that group, at the tremendous loss they were suffering, was effecting their overall ability to deliver the finest health care possible to the rest of their patients.

Expect to see more of that if “reform” is passed.

The second reason Gray gives is much less obvious than the first. But it provides just as powerful an incentive to ditch Medicare as does the first:

The second is more ominous—Washington’s increasingly abusive posture toward physicians.

President Obama reflected this attitude last summer. On national television, he stated as fact a surgeon is paid between $30,000 and $50,000 for amputating a patient’s foot.

In reality, a surgeon is paid between $740 and $1,140 to perform this unfortunate, but often life-saving procedure. This reimbursement must cover a pre-operative evaluation the day of surgery, the surgery, and follow-up for 90 days after surgery—not to mention malpractice insurance, salaries for clinic nurses, and clinic overhead. It is frightening to think our president is so wildly misinformed even as he stands on the cusp of overhauling American health care. But it gets worse.

Given massive federal deficits, Washington now faces increasing pressure to cut Medicare spending. One way to do this is to intimidate physicians into under-billing. To do this Washington intends to spend tax payer dollars to ramp up physician audits using Recovery Audit Contractors (RAC audits) to randomly investigate private physician’s Medicare billing.

Gray characterizes the RAC as unqualified bounty hunters and gives examples of his contention. The most egregious example is this:

For example, one patient the auditor alleged the group had “fraudulently” billed for was a man undergoing a chemical stress test. The allegation was the patient should have undergone a cheaper traditional treadmill stress test. The difficulty with this accusation was this man was a double amputee—he had no legs. This made a traditional treadmill test impossible. The auditors clearly were not trained health care professionals—they were bounty hunters. (It is worth noting the investigators are given legal immunity from a countersuit for conducting a “fraudulent investigation.”)

It is a good example because even the layman can appreciate why this particular case is so absurd. However, the doctors in question had to spend money to defend against this allegation of wrong doing. It brings up a critical point. One of the promises of “reform” is it will help remove the insurance company from between you and your physician. But as is obvious here, in a government plan such as Medicare, there is still someone between you and your physician who is no more qualified than some insurance drone.

The point, of course is that the drastically reduced Medicare payments to physicians coupled with increased meddling and second-guessing through RAC has driven doctors to a fish or cut bait point as it pertains to Medicare. They are forced into a business decision which requires them to give their practice a financial physical and cut out the portion which will cause the practice to die if not excised.

It is obviously a tough decision that I’d bet most doctors would prefer not to have to make, but as seen with the Mayo Clinic, they’re being driven to do so. This is the future of medical care if government runs it. Anyone who can’t see the rationing inherent in the “reforms” to Medicare is simply remaining willfully blind to the facts. Government must ration. And physicians must act in their own best self-interest. That means fewer physicians seeing more Medicare patients. The result is inevitable and as usual, the patients are those that will suffer.

~McQ


Coakley Losing? It’s Bush’s Fault

Let’s start our week of with the irony impaired. In this case it is Patrick Kennedy (D-RI), explaining why Democrat Martha Coakley – or as he referred to her, “Marcia Coakley” – is in trouble in the Massachusetts Senate Race:

“If you think there’s magic out there and things can be turned around overnight, then you would vote for someone who could promise you that, like Scott Brown,” Kennedy said. “If you don’t, if you know that it takes eight years for George Bush and his cronies to put our country into this hole … then you know we have a lot of digging to do, but some work needs to be done and this president’s in the process of doing it and we need to get Marcia Coakley to help him to do that.”

On to the irony:

“One thing the Democrats have done wrong? We haven’t kept the focus on this disaster on the Republicans who brought it upon us. We’ve tried too hard to do that right thing, and that’s to fix it, as opposed to spend more of our time and energy pointing the finger at who got us [here] in the first place.”

You can’t make this stuff up, folks. Of course one of the reasons this election is a referendum on Democrats in general is because the public at large mostly thinks they haven’t focused on that which is important – employment and the economy – but instead squandered their time on the less important, such as health care reform and cap-and-trade. As for the irony of claiming they haven’t spent any time and energy pointing the finger at others, blaming George Bush is a cottage industry among the Democrats, who spend days finding new and more entertaining ways to blame him for all their woes.

Whether or not Scott Brown ends up winning in Massachusetts on Tuesday, this is as obvious a wake-up call for Democrats as one can issue. Even the NY Times recognizes what’s going on:

This weekend, Democrats are struggling to hang on to a seat held by Mr. Kennedy for 46 years in one of the most enthusiastically Democratic states in the country. Conservatives are enjoying a grass-roots resurgence, and Republicans are talking about taking back the House in November.

As Mr. Obama prepares to come here on Sunday to campaign for the party’s beleaguered Senate candidate, Martha Coakley, Democrats across the country are starting to wonder aloud if they misjudged the electorate over the last year, with profound ramifications for the midterm elections this year and, potentially, for Mr. Obama’s presidency.

The most certainly did misjudge the electorate, because the nation’s situation changed late in the campaign. When it became clear that the economy was in trouble and unemployment was rising, that and not the liberal Democratic agenda, should have become priority one. But it wasn’t. They consciously chose to place the party’s agenda before the nation’s needs and have blindly pursued that agenda in the face of a continuing economic downturn.  That has placed them in the position they now occupy – out of touch, running out of time and facing a political bloodbath in November. It was a calculated risk, counting on swift passage of the agenda items, which hasn’t materialized. And, no matter how persistently and consistently they attempt to blame everything on Bush, that opportunity expired many months ago.

This is now about the Democrats and Obama and whether they like it or not the Senate race in Massachusetts is a referendum on their performance to date.

~McQ