Free Markets, Free People

Daily Archives: March 23, 2010


Some thoughts on a changing health care scene

Don Surber reminded me yesterday in something he wrote that the thing that is being forgotten in all of this is the premise that health care reform is based upon is

cost containment.  Or, as Surber puts it:

Government-run health care is about saving money, not lives.

Think back and think it through. What government is promising is insurance for all (more cost) and lower cost insurance plans (the repeated Obama promise was $2,500 per family on their premium – don’t forget Joe Biden’s promise that this bill “controls” the insurance companies). Those seem to conflict, but in reality, they can be accomplished even though you’re very likely not to like the result.

How? Severe rationing and imposed cost controls. Rationing would be accomplished by increased wait times, outright denials or limited care. Doctor visits would have to be shorter and shorter (reimbursement rates would encourage if not demand that). And of course limiting testing and the use of high-cost, high-tech diagnostic machinery is a given.

But won’t doctors and other health care providers have the choice of whether or not to take patients under such plans? Well, initially yes. However, it stands to reason that at some point, when large numbers of the newly insured can’t find a health care provider because of the constraints on care and reimbursement rates their insurance provides, that government will feel the necessity to step in – again.

If it can order individuals to buy insurance on pain of fine, what is to stop it from ordering doctors and other health care providers to take anyone with insurance, regardless of the reimbursement rates? It certainly doesn’t blink an eye at ordering insurance companies to take anyone with a pre-existing condition.  So at the moment I can’t think of a thing that would stop that sort of a law (that’s not an argument for its constitutionality, it’s simply a recognition of reality). My guess is Congress certainly believes it has that sort of power right now. We can only hope the courts decide otherwise. The whole point, of course, is that having insurance doesn’t guarantee health care or access to a doctor. And low reimbursement rates will guarantee they won’t have access.  The government is going to want to “fix” that.

If government-run health care is about saving money, not lives then one of the targets of any effort to “save money” is going to be high cost treatments. Many of the highest costs in health care come when? In the last months of life, of course. We’ve been told that 500 billion has to come out of the Medicare budget to help us save money on health care overall. And don’t forget, Medicare issues more denials of care than any other insurance provider. I don’t think it should take a particularly intelligent person to do a little dot connecting here.

That brings us back to the providers themselves. What will be their reaction to the primary push for cost control/containment?

Well, don’t forget, almost every practice out there is a small business. And if they make over $250,000 (and the vast majority do) they’re going to first and foremost be taxed at a higher rate. You know, because they’re “rich”. That will probably mean fewer staff, longer waits, less care. Or, by the simple means of taxing the practice, the government will manage to get between you and your doctor by changing how your care is delivered.

And, you have to wonder, how long will the better doctors put up with this before they decide to retire or find something else to do? I’m guessing this will be the first sector in the economy where Atlas will do some shrugging. I think in the next few years you’re going to see medical school enrollments drop, active government recruiting (subsidized education for x years of service) of students to go into the medical field as well as off-shore recruiting as well. Net result – the brightest and best will no longer be a characteristic of our medical community.

Those are a few of my thoughts on the future based on this law. Things may change, but like the CBO, I can only take a look at the static picture and make my assumptions based on that. I don’t see how this all accomplishes what the government has promised unless there are some pretty severe cuts in care and service and a lot of rationing through denial of service or claims. I don’t see how it all works as the government has promised unless all health care providers are forced to take anyone with insurance regardless of the reimbursement rates. That leads me to believe that government will try that in an attempt to accomplish it’s stated goal of bending the cost curve down. And at that point, my guess is health care providers rebel, many doctors quit and massive litigation begins.

For those of you hopping around celebrating this travesty today, is that what you expected or want?

~McQ


Health care reform – on to step 2

Harry Reid sent a letter to Sen. Bernie Sanders saying he planned to introduce the public option in a month or so.  Democrats in the House aren’t waiting that long.  Again, assuming they know that their liberal agenda window is closing, “progressives” plan to get the most bang for their buck:

A leader of the House liberals’ caucus said Monday she’ll introduce new legislation to revive the public option.

Rep. Lynn Woolsey (D-Calif.), the co-chairwoman of the Congressional Progressive Caucus, said she plans to unveil legislation to add the government-run option to the national healthcare exchange established by legislation President Barack Obama is to sign tomorrow.

“We will introduce a robust public option bill on the very day the president signs the reconciliation bill into law,” Woolsey said Monday during an interview on MSNBC.

The public option, of course, is the precursor to single-payer and the progressive caucus has never been shy of telling anyone who will listen that’s what they want for real health care reform – a government run insurance program.

Meanwhile states are beginning to line up to file suit over the current bill which passed the House Sunday night – 11 or 12 states, including TX, FL and VA, plan on filing lawsuits upon the signing of the bill into law. FL, for instance, is claiming two elements of the bill are unconstitutional:

McCollum said the challenge is on two constitutional grounds: 1) its mandate that everyone must buy health care insurance, and 2) the new law challenges the sovereignty of states by forcing them to do things they cannot afford. He said the 10th Amendment protects states from that.

“It goes far beyond an unfunded mandate and would literally cost the state of Florida alone billions of dollars in additional costs to be able to implement,” McCollum said. “The whole bill is unconstitutional that it manipulates the state into doing things it cannot afford.”

If the individual mandate were to be ruled unconstitutional – and I think there’s a good chance there – it would cripple the law. One of the main funding provisions has to do with the mandates and fines for those who don’t comply. Of course if the court were to find for the states based on the 10th amendment argument (something I have no idea whether it has sound legal footing or not given the number of mandates the states presently have), the law would push all the cost back on the federal government and destroy any argument, however absurd, that it will reduce the deficit.

The point? The HCR debate is far from over. The left is going to continue to push for more and more add-ons to work toward their real goal – single payer, government run health care. The right is going to have to fight on two fronts – in the Congress where the 41st Senate vote will be very important and in the courts.

~McQ

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