Free Markets, Free People


The “right” to health care vs. the right to earn a living

More fallout from the ObamaCare monstrosity.  Reality begins to set in with a vengeance:

Want an appointment with kidney specialist Adam Weinstein of Easton, Md.? If you’re a senior covered by Medicare, the wait is eight weeks.

How about a checkup from geriatric specialist Michael Trahos? Expect to see him every six months: The Alexandria-based doctor has been limiting most of his Medicare patients to twice yearly rather than the quarterly checkups he considers ideal for the elderly. Still, at least he’ll see you. Top-ranked primary care doctor Linda Yau is one of three physicians with the District’s Foxhall Internists group who recently announced they will no longer be accepting Medicare patients.

"It’s not easy. But you realize you either do this or you don’t stay in business," she said.

For those slow on the uptake – when limited resources meet unlimited need, rationing is going to take place regardless of whether one wants it or likes it.  Rationing can take effect in many ways.  Two of the most common are by price and by availability (or a combination of both). 

Declaring everyone is “entitled” to health care doesn’t make it more affordable or available.  Because its availability doesn’t increase automatically on such declarations.  And that was the fly in the ObamaCare promise from the very beginning.   Then add in the absurd claim that you can get more for less and you’re where we are now with doctors and Medicare patients.

Reality is a harsh mistress.  Reality says that a person will do what is necessary in the business world to keep their business going.  We’ve seen that with the drop in employment during this recession as businesses cut back on headcount to survive it.  The same goes with the business mix of paying customers any business has.   If it takes a certain amount a month to maintain your practice, you have to ensure that is covered along with whatever profit (read salary) you want for yourself. The most common way a business does that, besides cutting expenses, is to raise prices.

But in health care you can’t really do that.  So?  So instead you change your business mix.  You begin to refuse to see those who pay the least in favor of those who pay the most, i.e. less Medicare patients and more private insurance patients.

If you’re a doctor, you spent 10 years of your life getting to the position you now hold and even more years building your practice.  You are, in fact, a small business owner who employs a good number of health care workers both directly and indirectly.

If however 40% of those you see are Medicare patients and those patient payments to doctors are being drastically reduced such that you’ll now be pulling in much less a month than you need to meet all your financial requirements, it is time to reassess the mix of patients you can afford to see.   Note the word – afford.  This is the only way a doctor can “raise prices”. 

There are those who claim that such a doctor has a responsibility to see whoever comes in the door.   In fact that doctor has many other responsibilities that preclude that – like his responsibilities to those he employs, the expense of his practice, malpractice insurance, student loan payback, etc.  He can’t see the first patient until all of those things are paid for.  And then he has to maintain his or her practice (thus the overhead) at a certain level to meet the needs/demands of the patients he does see. 

So when he looks at his mix of patients, he has to make a decision, doesn’t he?  And, as you see in the cite, many are beginning to make that decision.  He has to get that revenue stream back up to the level at which he can at least cover minimum needed to sustain his practice at a level he deems necessary.

Among the top points of contention is the complaint by doctors that Medicare’s payment rate has not kept pace with the growing cost of running a medical practice. As measured by the government’s Medicare Economic Index, those expenses rose 18 percent from 2000 to 2008. During the same period, Medicare’s physician fees rose 5 percent.

"Physicians are having to make really gut-wrenching decisions about whether they can afford to see as many Medicare patients," said Cecil Wilson, president of the American Medical Association.

But statistics also suggest many doctors have more than made up for the erosion in the value of their Medicare fees by dramatically increasing the volume of services they provide – performing not just a greater number of tests and procedures, but also more complex versions that allow them to charge Medicare more money.

From 2000 to 2008, the volume of services per Medicare patient rose 42 percent. Some of this was because of the increasing availability of sophisticated treatments that undoubtedly save lives. Some was because of doctors practicing "defensive medicine" – ordering every conceivable test to shield themselves from malpractice lawsuits down the line.

Of course they practice preventive medicine because Congress has adamantly refused to address tort reform, so, in many practices the largest expense incurred per year is malpractice insurance.  And naturally that constant threat drives the medicine to some extent.  Additionally it is human nature to try to get what you believe your services are worth if you’re going to render them. 

Instead we have  an outside entity arbitrarily declaring what they’re worth.  It is has now  gotten to the point that providers have to make some decisions because they can no longer operate at the level they desire too with the payment structure in effect.  And, as can be seen, they are making those decisions.

Which brings us back to the point that was made on this blog many times before when the promise of health care for all at lower cost kept being thrown around.  You can’t have it both ways.  The fact that there is now going to be more demand on a finite product means that rationing is somehow going to exist.  The fact that you have insurance obviously doesn’t guarantee you a doctor. 

Of course the reaction to these decisions is predictable as well:

Still, even if primary-care doctors had to rely exclusively on Medicare’s lower payment rates their incomes would only drop about 9 percent, according to a recent study co-authored by Berenson, who is also a fellow at the non-partisan Urban Institute.

"The argument that doctors literally can’t afford to feed their kids [if they take Medicare's rates] is absurd," said Berenson. "It’s just that doctors have gotten used to a certain income and lifestyle."

Got the implied argument there?  Whatever the income and lifestyle, they’ll just have to get over it and go along with the arbitrary price fixing government decides on. They’re probably among the “undeserving rich” Krugman was talking about below.  Oh, and note that a 9% drop in income also means a commensurate drop in the amount of overhead the office can afford – headcount in other words.  And that may mean poorer treatment.

You don’t get to decide what you’ll charge and let the market either reward or punish you for doing so. Oh, no.  The government will decide on what is acceptable, private insurance will go along because it is worth their while (they may not match the cost but they’ll lower their payout because the government has lowered its payout), malpractice insurance will most likely rise (you can’t do a better job with less staff and less time) and there you are, captaining a sinking ship.

Of course the reaction  being documented here is an immediate reaction to a flawed policy.  It is as natural as self-defense, because in a business sense, that’s precisely what it is.  Health care is a business, not a “right”.  And this is how businesses react to such intrusions in the market that could conceivably kill their chance at survival.

Long term the result will be even worse and more drastic.  And we’ve begun to see it already.  With all the turmoil and cost cutting in the health care industry, fewer and fewer are choosing it as a career path.  People like Berenson can sneer at doctor’s concerns now, but as almost every medical association out there has noted, fewer and fewer people are entering the profession.  And that’s across the board.  It seems, for whatever reason, our social engineers simply don’t understand economic basics and constantly and consistently dismiss them with disastrous results. 

Incentive is a wonderful motivator that has brought us all sorts of innovation and a better life.  Destroy that and you destroy motivation and the desire to excel.  That’s precisely what is happening here – with predictable results.

~McQ

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21 Responses to The “right” to health care vs. the right to earn a living

  • Top-ranked primary care doctor Linda Yau is one of three physicians with the District’s Foxhall Internists group who recently announced they will no longer be accepting Medicare patients.
    “It’s not easy. But you realize you either do this or you don’t stay in business,” she said

    >>>>  It’s a feature, not a bug.  The next step will be swift demonization of doctors like Mrs. Yau, followed by a barrage of lawsuits/new laws basically forcing her to see these patients.

    And if that drives doctors out of business, well, we all know what the next step will be, don’t we?

    • “The next step will be swift demonization of doctors like Mrs. Yau, followed by a barrage of lawsuits/new laws…”

      The Doctors’ Plot!
      First we start by sentencing them to public service. That will solve the problem; no compensation required. Bending the cost curve and all.
      Oh, and a trial of course.

    • Its a feature for sure.  The next step is selling the elderly on the idea we need a total system revamp (aka socialization although they’ll laugh at you if you call it that).

      The whole point to HCR was to force the higher costs down into the lower risk / lower cost groups.   This Medicare move will force doctors to raise prices on their non-Medicare patients forcing the private sector insurance to subsidize it.

      And like you said doctors will be demonized and regulated to achieve that end.  And the doctors should be finding their AMA spokesmen with pitchforks and torches.

      First it was the insurance companies.  Next it will be the doctors.  Basically turn one part of the industry on the rest one at a time.  To that end, the drug companies and their backroom deals will have their turn come up at some point.

  • http://legalinsurrection.blogspot.com/2010/11/is-schadenfreude-forbotten-on.html
    As reported by The Wall Street Journal, the SEIU Local 1199 health plan will have to drop coverage for children due in substantial part to Obamacare requirements:

    One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants, union officials said. The union blamed financial problems it said were caused by the state’s health department and new national health-insurance requirements….

    The fund informed its members late last month that their dependents will no longer be covered as of Jan. 1, 2011. Currently about 6,000 children are covered by the benefit fund, some until age 23.

    GOTS TO LOVE IT…!!!!

  • For those slow on the uptake – when limited resources meet unlimited need, rationing is going to take place regardless of whether one wants it or likes it.

    Not to quibble, McQ, but it ain’t “unlimited need”.  It would be “unlimited demand”, since many people will seek a free good without any need for it whatsoever.  I mean, why the hell not?  Lonely?  Bop into the local hospital for some “free” companionship.

  • Classic economics says you can not create a right to a commodity.   Health care, as a product of human endeavor, is a commodity, like it or not.   Then Obama never studied economics either.

  • I am 7 months away from Medicare.  Among other things, that means my current health insurance goes away because the government “owns” the over 65 health care market.  I have been aware of the implications McQ mentions ever since ObamaCare passed.  I can only hope my physicians continue to take Medicare otherwise I will have the “long tough slog” to find a doctor that does take it.  As fewer doctors take Medicare, then  those that do will be inundated.

    A second implication is that I cannot move.  The idea that I could not find a doctor in a new geographic location is disconcerting.  A third implication is that I might be forced into an HMO.  At least an HMO could charge a membership fee which would get around Medicare fixed rates.  I could also consider a concierge doctor for my primary, but that would probably not work for specialists.

    In the end, I hope all of these problems develop quickly.  ObamaCare is tied exclusively to Obama and the Democrats.  As the seniors run into these problems, any chance they will vote for any Democratic becomes more remote.  Pelosi wanted the “Doc Fix” taken out of the ObamaCare bill so the cost would not be a part of it.  It would be ironic if by doing that, Pelosi ends up destroying not just ObamaCare, but also the whole Democratic party.  If the Democrats lose the seniors, they are toast.

  • Declaring everyone is “entitled” to health care doesn’t make it more affordable or available.

    During many of my ‘discussions’ with friends and family who think that health care is a “right”, I would always point out that no right exists if it requires coercion.  Without exception, these friends and family (and they are legion) would scoff, proclaiming that no medical provider is forced to help anyone.  Most are guilty of allowing wishful thinking from preventing them to follow a policy to its logical conclusion.  (Some are just unthinking partisans.)

    With the inevitability of more stories like this – if Obamacare is allowed to continue unbridled – the rapidly accumulating weight of the chickens coming home to roost will cause the free-health-care-for-all edifice to collapse.   Let us just hope that enough of these emotion-based “thinkers” on the left recognize that a looming catastrophic failure can be adverted… if only they stop their utopian dreamings.

    • Something they teach in law school…
      If you have a right, somebody has an obligation.  Try it.  It works pretty much every time if you apply it correctly.  I’ve never seen an exception.

  • “Still, even if primary-care doctors had to rely exclusively on Medicare’s lower payment rates their incomes would only drop about 9 percent, according to a recent study co-authored by Berenson, who is also a fellow at the non-partisan Urban Institute.”
    LOL. I see Ott Scerb has some competition.

    “The argument that doctors literally can’t afford to feed their kids [if they take Medicare's rates] is absurd,”

    Which is probably why this guy is the only person to use it.

     “It’s just that doctors have gotten used to a certain income and lifestyle.”

    So much for the American Dream, the land of opportunity.I daresay Mr. Berenson has also gotten accustomed to a certain income and lifestyle.

    What incredible arrogance and self-righteousness.

  • At some point, the pressure to reduce physician renumeration will reach a critical point. Then physicians will leave the profession in droves.  Quality of health care will then plummet.   Physicians don’t go hungry, but physicians’ practices can and do go bankrupt.  This is what people engaged in class warfare refuse to acknowledge.
    To some extent physicians enjoy their profession for altruistic reasons and for the prestige it affords, but at some point physicians have to look at their job like everyone else looks at theirs.
    The heavy responsibilities, the constant threat of frivolous lawsuits, the long hours, working at night, on weekends, during holidays… at some point compensation for physician services drops below the level at which these burdens and sacrifices are balanced by the rewards.  As rational human beings, physicians will leave when we go below that point.

     

  • Sign of the times: new book about Physicians leaving clinical medicine.. http://doctors.50interviews.com/

  • Reality is a harsh mistress.  Reality says that a person will do what is necessary in the business world to keep their business going.

    Understand  that the left doesn’t see reality differently, they see an entirely different reality. Their’s exists, not “out there”, but in their mind (subjectivism). It consists of “visions” (read: whims), often passed down from the elite/anointed.  As such, these “visions” are wholly detached from reality and are more properly termed “fantasies” or “delusions/deceptions”.
    In this state, health-care providers are not real people, they are a chimera; things that were born with a medical degree and a practice that materialized out of thin air.
     

  • “The argument that doctors literally can’t afford to feed their kids [if they take Medicare's rates] is absurd,” said Berenson. “It’s just that doctors have gotten used to a certain income and lifestyle.”

    First of all, what a strawman!  NOBODY is arguing that ObamaCare is going to lead to doctors’ children going hungry.  What people DO argue – with growing weight of evidence – is that doctors will stop seeing patients if the money isn’t there.  It is easy to predict what will happen if this keeps going: doctors will leave the field.  They will either stop practicing completely, or else otherwise avoid the costs inflicted on them by ObamaCare (for example, practicing offshore or in some other “underground” manner).

    The quote from Berenson is an excellent example of the kind of class warfare that the left has made into an art over the past several decades: the idea that some people are just making “too much” and should be content with less.  And if they won’t be voluntarily content… well… there are remedies for their greed, right?

    Say, who wants to sign up for years of hard work in high school and college, followed by years of harder work in med school, followed by years of hard work for low pay in internship and residency, only to have a lifetime of long hours filled with (literally) life-and-death decisions, any of which could lead to a crippling lawsuit?  A good friend of mine is an MD: she makes a very good living, but I know the sacrifices that she and her husband made to earn that living.  Years spent living apart when she went to med school overseas.  Years spent moving from city to city while she was doing internships and residency.  Long hours in the hospital.  Longer hours hitting the books to prepare for exams and boards.  Staggering student loan bills (they were fortunate that her husband made a good living in IT, the result of years of night school on his part coupled with hard work and ambition to land a good job).  And, again, the pressure of life-and-death decisions.  I don’t think that everybody earns his financial status; some people are lucky to be rich, and others get bad breaks that lead to poverty.  But I know that doctors EARN what they make, and I find it offensive that some schmarmy academic type has the cast iron gall to claim that they don’t deserve it.

  • I have lived in a country with “national healthcare” i.e. Taiwan. Actually, you do have to be employed to get it, and they did leave private practice, private insurance, and let you pay for non-listed medicine if you want it – so there is that. Its very cheap for an employee to visit a doctor – copay of about US$ 5.00 (Employer pays US$ 25.00 though – most people using it never know about that.)
    Its not a horrible system, but you can definitely see how doctors game the system, and how the government attempts to force costs down. For example, my business partner saw the dentist and got some fillings done. The original dentist did the job, but left cotton swabs inside the teeth, requiring my partner to find another dentist to fix the problem. (Taiwan does not have much medical malpractice or many lawyers, which sounds great until you get screwed and have no recourse.) The next dentist fixed the problems, but required her to return every week for many months to “finish” the work. We happened to visit the USA during this time, and I took her to my US dentist, who free of  charge, examined her and informed her that the work had already been completed. It had been completed the first visit, but since the dentist gets paid per visit, he likes you to come back week after week, just to collect that US$ 5.00+25.00 pay out. Nice waste of everyone’s time and resources, but the dentist must feel he has to do that to make money.
    I have also seen crazy things like watching a doctor prescribe me three kinds of aspirin (this was before they made doctors stop selling meds and instead made you get the meds from a separate pharmacy.) Again, he was making money of each painkiller that could have easily been bought over the counter. In fact, most people see the doctor for a common cold – you can’t even find decent children’s cold meds because of this. Chinese people like seeing lots of pills, and so you get 5 kinds of pills that are the same as you could get in a OTC cold medicine in the USA. Now, my daughter would throw up pills that were bitter, so we had to buy special medicine not on the approved cheap list. The good news is that was possible unlike Canada. But its very typical of state-run one-size fits all medicine to do these sorts of things. “Oh, you don’t respond well to the most common meds? Well, then we have something better but it will cost you.” Of course, to keep costs down, they only can give you 2-3 days of meds at one time. Thus, you have to repeatedly visit the doctor (they like that) wasting untold amounts of time to get simple medications.
    That said, we also got very good care, especially neonatal. Monthly ultrasounds (where in Canada you get one or two total.) Then again, if you bring your child with a fever, etc., to emergency (again its very cheap, why not?) they will force you to have an IV. Insane, but when the doctor tells you to do it, you do it. (I don’t fight my wife on this stuff.)
    Now that we are in the USA, with an HSA plan, she has learned that its no use to see the doctor unless you have something serious and got over the issue of demanding many pills instead of just OTC cold meds. I also like that my plan allows me to email my doctor or call a nurse – saving repeated trips to waiting rooms or emergency as in Taiwan. (You can’t call or email you doc – get a number wait in line.) Though they do have electronic medical records and I also think they staff more appropriately. My US dentist seems to need 6 office staff and about 8 dental assistants for 2 dentists who are seeing 3-4 kids at one time. I wonder how many of his customers have dental insurance from work and don’t care.
    I suspect that if Medicare attempts to hold down costs, you will see doctors game the system like Taiwan or see cash customers only. The second is the most worrying, because you just know some people will then advocate stopping such “wasteful and greedy” practice – even though it only happened through government provided incentives.
    One last thing – Taiwan’s system wasn’t that bad, either. Just wonder if they staff was unionized and paid US wages if it could last at all. Its already running into financial problems.

  • Dense righties just can’t see the big picture. I’ve told you guys a thousand times that healthcare is a moral right. (But not a natural right, which doesn’t exist, and the difference is a subtle thing which you must have an advanced degree to understand.)

    Since we wise leftists have done the hard part and decreed that healthcare is a moral right, it’s up to you grunt engineer types to figure out a way to make sure everybody gets it. What’s so hard about that? And don’t start up about any of your free market claptrap. Markets don’t adjust themselves, there’s no reason to believe they do. So just give wise leftists enough control, and bear down and get to work, and all of a sudden healthcare services will just appear out of thin air, because we wise leftists have decreed that everyone deserves them.

    Don’t start up about doctor shortage or how they can’t make money or any of that stuff either. Why, those doctors make lots more money than I do, but you don’t see me complaining, do you? Nope, I never complain about being a low-paid professor at a moose-infested campus up in Maine, so they should just suck it up and start working twelve hours a day like I do to make sure everyone has health care.

    And don’t start up about how hard it was for them to become a doctor. Do you think it was easy for me to get my advanced degrees? No, indeed, it was not. I had to submit my thesis, like, a dozen times before it was accepted. But that doesn’t mean they gave me a degree just to get rid of me! Stop saying that!

    No, I got the advanced degree because I do such fabulous analysis {analysis, analysis, analysis} which is completely different from opinion. You can come over to my blog right now and read about how my analysis says that Europe is the future, and America is in decline, and all this stuff about Europe going bankrupt is just wishful thinking by dense righties.

    And don’t you dare start up about how my predictions always turn out wrong! You certainly don’t need to bring up Iraq, where I was totally right by the way, or the recent election where I said the Republicans would only pick up a couple of dozen seats, or two years ago when I said Obama would cut spending, or any of that. Because I was right all those times, it’s just that there are subtleties that make it look like I might have been a teensy bit wrong if you are a thick rightie who doesn’t understand the holy writ of post-modernism.

    And I’m certainly not staying away from here because I would have to eat crow if I came back, no sir. {eyes rolling} You ex-military basket cases around here will just seize on anything to make it look like I’m wrong about something, won’t you? No, I’m staying away because you’re sterile, inbred, Nazi-like climate deniers, as I told you last year. Plus the fact that you insult me, which proves I’m right. So since I’ve proven that I’m right, I don’t need to come here any more to keep proving it. Nyah, nyah, nyah. {giggle} If you disagree, you doth protest too much.

  • Oh now boys boys boys!  Screw these evil rich doctors!  Comrade Castro will provide as he does for many an African socialist paradise and for his own island.  We’ll just rent our doctors from Cuba, virtually free medical care!, awwww, it’ll be sweet!  Hell, even China might see the market potential and cash in.  

    THEIR people understand selfless sacrifice and putting their own needs after the greater good of the common man (especially if their families stay behind in Cuba or China while they do their tour here in the US, heh?)

  • Unless, and of course, the point IS to collapse the system… see: The Cloward – Piven Strategy.

  • Five years ago over 70% of physicians were self-employed or part of a small partnership. Now less than 40% are, and predictions are that it will drop below 25% by 2014. Physicians that are ‘owned’ by big hospital systems have to play by the hospital rules, i.e., refer patients within the system even if better docs are outside, use the hospital diagnostics, etc. My daughter had constant tonsil infections. Our pediatrician referred her to an in-system ENT and ordered a MRI. I checked around, found one of the few independent ENTs in the area who had better credentials. He said a MRI wasn’t needed, and, by the way, our pediatrician sent her own kids to him, she just wasn’t allowed to refer her own patients to him.
    Next prediction: to assimilate the resistant 25% of docs, the powers will need to nationalize physician licensure. Otherwise better physicians will just migrate to Texas or other states that don’t force involuntary servitude. Watch for a push for ‘quality’ and/or ‘safety’ to “get bad docs out of practice” as the rationale for taking licensure away from the states…