This story typifies, at least to me, the problem we can expect in the health care field if government becomes even more involved than it is now:
Obama administration officials, alarmed at doctor shortages, are looking for ways to increase the supply of physicians to meet the needs of an aging population and millions of uninsured people who would gain coverage under legislation championed by the president.
The officials said they were particularly concerned about shortages of primary care providers who are the main source of health care for most Americans.
One proposal — to increase Medicare payments to general practitioners, at the expense of high-paid specialists — has touched off a lobbying fight.
Family doctors and internists are pressing Congress for an increase in their Medicare payments. But medical specialists are lobbying against any change that would cut their reimbursements. Congress, the specialists say, should find additional money to pay for primary care and should not redistribute dollars among doctors — a difficult argument at a time of huge budget deficits.
The trend for years has been away from general practice and toward specialties. Part of that stems from the fact that specialists are paid more than generalists.
Most of us understand that most of our medical care will take place in our latter years with the obvious exception of certain genetic and chronic diseases which afflict a portion of the younger population. So Medicare, which kicks in at 65 whether you want it or not, is a major payer (and player) to family practice doctors who care for older Americans that make up the bulk of their practice.
With that being the case, we’re seeing fewer and fewer medical students option to become family practitioners, preferring the more lucrative pay specialists earn. The consequent result of low pay, huge patient loads and little recourse for changing that has seen family practice numbers in medical universities drop alarmingly. Why spend all that time and money learning a particular craft when the rewards aren’t as great as you want?
So here we have the market for family practitioners reacting to a distortion in the market created by the government refusing to pay at what the doctors feel is an adequate rate for the treatment of the majority of their patients. The market’s feedback mechanism sends the signal to the potential doctor to look at areas which would be more lucrative than family practice to receive adequate compensation. That area is specialization.
The reason I bring this particular example up is the competing proposals. One say, “hey, if you want more family practitioners, pay them more – that provide the incentive to become a generalist”. On the other hand, there’s a proposal to do that, but to accomplish that increase at the expense of specialists who take medicare.
How do you suppose specialists will react? Well if they do as two of mine have, they’ll simply say, “sorry, we don’t treat Medicare patients”.
And how do you suppose such a decision would effect the number of family practitioners. Well, that would depend on how much they’re willing to increase payments to them.
In the era of massive budget cuts and the promise by government to “decrease” the costs of health care, any increase in my estimation, would by minimal and not enough to change the tide concerning family practice. But taking that increase out of what is paid specialists certainly might be the tipping point for many of them to declare they’ll no longer treat Medicare patients.
Certainly our old friend the Law of Unintended Consequences again at work.
Ramesh Ponnuru writes one of the better op/eds discussing the push for “universal health care” I’ve seen.
The practical case is that uninsured people raise premiums for everyone else. But such cost shifting raises premiums by 1.7 percent at most, according to a 2008 study published in the journal Health Affairs. Reforms that increase the number of people with health insurance, while stopping short of universal coverage, would presumably make that small percentage even smaller.
The obvious way to take care of that is to directly insure that relatively small group instead of messing with the entire system.
What about portability and pre-existing conditions? As we’ve been saying here, for literally years, remove it from being employer based and you’ve taken care of both as long as a person keeps their payments current. And, to make it more affordable, remove state mandates. Ponnuru says precisely the same thing:
An alternative approach would be to make it easier for people to buy insurance that isn’t tied to their employment. The existing tax break for employer-provided insurance could be replaced with a tax credit that applies to insurance purchased either inside or outside the workplace. At the same time, state mandates that require insurers to cover certain conditions, which make it expensive to offer individual policies, could be removed.
More importantly, it is a free-market approach. As Ponnuru says:
These two reforms would address most people’s anxieties about the health care system. Insurance would be more affordable, especially for people who cannot get it through an employer, so the number of people with insurance would rise. Indeed, this would enable more than 20 million more Americans to get insurance, according to a model created by Steve Parente, a health economist at the University of Minnesota.
More important, people would own their insurance policies and thus be able to take them from job to job. They would no longer need to worry about losing their job and their insurance at the same time, or feel they need to stay with a job they dislike because they need the benefits.
There it is, the same solution we’ve been pushing at QandO pretty much since QandO has existed. It is a common sense solution which actually reduces government’s role, gives people choices and makes coverage more affordable for a larger number of people, portable and negates the concern for “pre-existing” conditions.
Which is precisely why government will reject such a remedy.
President Obama, has decided that in addition to the health care, energy and education debates, he’ll also crank up the immigration debate:
He said then that comprehensive immigration legislation, including a plan to make legal status possible for an estimated 12 million illegal immigrants, would be a priority in his first year in office. Latino voters turned out strongly for Mr. Obama in the election.
“He intends to start the debate this year,” Ms. Muñoz said.
12 million is the low-side estimate. Others estimate the total to be as high as 20 million.
Here is the argument he can plan on seeing prominently pushed from the other side as it concerns legal status for illegal immigrants:
“It just doesn’t seem rational that any political leader would say, let’s give millions of foreign workers permanent access to U.S. jobs when we have millions of Americans looking for jobs,” said Roy Beck, executive director of NumbersUSA, a group that favors reduced immigration. Mr. Beck predicted that Mr. Obama would face “an explosion” if he proceeded this year.
“It’s going to be, ‘You’re letting them keep that job, when I could have that job,’ ” he said.
The argument that the jobs immigrants hold are jobs Americans won’t do rings even more hollow in a recession.
Additionally, starting this emotional issue up now, while he’s trying to push the other issues I mentioned is going to diffuse focus and may cost him critical support on health care, energy or education.
This is not a smart political move. But it is one I welcome.
Some relatively good news and some bad news. The good news has to do with “cap-and-tax” as the WSJ article cited refers to “cap-and-trade”:
Tennessee Republican Lamar Alexander called it “the biggest vote of the year” so far, and he’s right. This means Majority Leader Harry Reid can’t jam cap and tax through as part of this year’s budget resolution with a bare majority of 50 Senators. More broadly, it’s a signal that California and East Coast Democrats won’t be able to sock it to coal and manufacturing-heavy Midwestern states without a fight. Senators voting in favor of the 60-vote rule included liberals from Wisconsin, Michigan and West Virginia. Now look for Team Obama to attempt to impose cap and tax the non-democratic way, via regulation that hits business and local governments with such heavy costs that they beg Congress for a less-harmful version.
I say relatively good news because the author is right – if the Obama administration can’t get it through Congress, there’s little doubt they’ll look for an administrative way to impose cap-and-trade through the executive branch. One route may be through the EPA.
Of course, there is always the distinct possibility that one of the Democratic Senators who is presently against limiting the filibuster will be pressured into changing his mind. And then there are always the RINOs.
But the possibliity remains that the cap-and-trade economy killer may be defeated in Congress, or at least delayed for a while. If passed, you could rest assured we’d not be seeing an economic recovery anytime soon.
However, cap-and-trade isn’t the only problem on the horizon. The health care push will be coming up soon as well, now that Congress has passed the Obama budget blueprint with no Republican support.
The most important remaining fight this year is over health care. Democrats seem intent on trying to plow that monumental change through with only 50 votes, even as they negotiate to bring along some Republicans. We hope these Republicans understand that a new health-care “public option” — a form of Medicare for all Americans — guarantees that the 17% of GDP represented by the health-care industry will be entirely government-run within a few years. This is precisely Mr. Obama’s long-term goal, though he doesn’t want to say it publicly.
It is a back-door means of claiming the reforms are “market” oriented while setting up the system to be quietly shifted to government control. And this at a time when more and more doctors are leaving the Medicare system because of low payment.
In the case of health care, the use of “reconciliation” appears to be a possiblity. That means, as an exception to the rule which now requires 60 votes for cloture on all measures of law, the Senate could require a mere majority (51 votes) to pass this monstrosity and see the government devour another 17% of GDP.
The game plan is fairly evident. Grace-Marie Turner, president of the Galen Institute, said in an interview:
“We really have a pretty good idea of the outline of the plan they are going to be proposing,” she said. They’ll want to “require everyone to have health insurance and require all employers to pay.”
Since some companies and individuals may not be able to afford that, the taxpayers will be told they are making up the difference, she warned.
The real danger, she suggested, is that with a government-run program, private insurance soon will start disappearing.
“If you expand access to government programs, more and more will drop private coverage,” she said. “A lot of this is going to be, I fear, replacing the private coverage with taxpayer supported coverage.”
That will just raise the costs even higher, and be the first step to what she expects eventually will be “a monopoly player.”
Routed through the government bureaucracy, the same inefficiencies that every government run health care service will emerge. And as with any system in which unlimited demand meets finite supply, some sort of rationing will take place. Since government will be the monopoly player, as Turner calls it, that rationing won’t be by price, as it now works, but instead by denial of service:
Already, she said, $1.1 billion is being allocated for “comparative effectiveness studies.”
That will be “what treatments are good and bad, what’s going to be available to us or not. That’s the first step toward rationing,” she said.
That $600 billion dollar “downpayment”, as Obama calls it, will eventually morph into a deficit of trillions. Why? Because the promise is low-cost universal health care. And there is no such animal that is worth a tinker’s dam.
Another anecdote that makes you want government run health care so badly you can just taste it:
The full extent of the horrific conditions at an NHS hospital where hundreds may have died because of ‘appalling’ care was laid bare yesterday.
Dehydrated patients were forced to drink out of flower vases, while others were left in soiled linen on filthy wards.
Relatives of patients who died at Staffordshire General Hospital told how they were so worried by the standard of care they slept in chairs on the wards.
The ‘shocking’ catalogue of failures was released yesterday after an independent investigation by the Healthcare Commission.
It found Government waiting time targets and a bid to win foundation status were pursued at the expense of patient safety over a three-year period at Mid-Staffordshire NHS Trust.
The commission’s report – revealed in yesterday’s Daily Mail – said at least 400 deaths could not be explained, although it is feared up to 1,200 patients may have died needlessly.
Nice. And I’m sure, somewhere, some politician or bureaucrat will claim that the problem, naturally, is “lack of regulation”.
And by the way, if you’re wondering how much the American version will cost, here’s the first estimate. Remember, when looking at it, how often these sorts of estimates are so low they’re not worth the paper they are written on – figure anywhere from 2 to 4 times the figure once the government gets done being “efficient”:
Guaranteeing health insurance for all Americans may cost about $1.5 trillion over the next decade, health experts say. That’s more than double the $634 billion ’down payment’ President Barack Obama set aside for health reform in his budget, raising the prospect of sticker shock at a time of record federal spending.
Thus the nice “downpayment” with money we don’t have.
A week or so ago, I highlighted a story about the possibility that Democrats were going to tax your employee health care benefits (after all, those among the 95% who are getting a tax cut have to have something to spend it on) and I was assured this particular plan comes up all the time and never gets out of committee. Well it appears those assurances of nothing to worry about were premature. The idea may not only get out of committee this time, but be signed into law as well:
The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.
So you’ll pay taxes on your private health benefits to pay for health benefits for others, while government tells you how expensive your private coverage is and how they can run it much more cheaply and efficiently if only you’ll pitch in and pay for it.
Question: If taxes on your health care benefits are going to pay for a governmental health care system overhaul, and one assumes the purpose of the overhaul is to bring more and more of the health care system under governmental control, how will government “pay” for all of this in the future when you no longer have private health care benefits to tax?
Read the whole article. It doesn’t even take a double digit IQ to spot the law of unintended consequences laying in the weeds just salivating over this one.
Apparently Timothy Geithner isn’t the financial “rock star” he was touted to be if his handling of the Asian crisis 10 years ago is any indication.
While Obama may have “inherited” the financial problems, the bear market is all his.
Speaking of lay-offs, this isn’t going to make our jet jocks feel very secure.
The new slogan of the Democrats – never let a good crisis go to waste. So this is a “good” crisis?
Take a look at this page and tell me where are the promised tax money from rich folks is going to come from.
If you don’t believe government is contemplating some pretty heavy care rationing when and if they get control, read this little beauty carefully.
Even George McGovern finds the pending card check legislation desired by unions to be “fundamentally wrong” and undemocratic.
Grey wolves “delisted” from endangered species list.
No time for Gordon Brown, but plenty of time for Brad Pitt. Wonder if Pitt got a 25 volume DVD set too?
Is Obama preparing the way for a massive defense spending cut?
Even Paul Krugman is getting a little antsy about the apparent lack of focus of the Obama administration on the financial crisis.
It appears Hugo Chavez recognizes a kindred spirit when he sees one.
The Senate is one vote short of passing the omnibus spending bill with 9,000 earmarks. All I wonder is which Republican will cave first?
David Brooks, 3 days after a semi-courageous, “what-the-heck-is-going-on” column, received calls from the senior staff at the White House and quietly got back in line:
In the first place, they do not see themselves as a group of liberal crusaders. They see themselves as pragmatists who inherited a government and an economy that have been thrown out of whack. They’re not engaged in an ideological project to overturn the Reagan Revolution, a fight that was over long ago. They’re trying to restore balance: nurture an economy so that productivity gains are shared by the middle class and correct the irresponsible habits that developed during the Bush era.
The budget, they continue, isn’t some grand transformation of America. It raises taxes on energy and offsets them with tax cuts for the middle class. It raises taxes on the rich to a level slightly above where they were in the Clinton years and then uses the money as a down payment on health care reform. That’s what the budget does. It’s not the Russian Revolution.
How moderately wonderful, right? They’ve now dazzled Brooks again. They’re not “liberal crusaders”, they’re moderate pragmatists who want to lend stability to the economy.
Brooks then goes through a litany of things “Republicans should like”. He finishes up by claiming he still thinks they’re trying to do too much too fast, and that may lead to problems “down the road”, but all in all, he’s impressed by their sincerity, commitment to what is best for America and the fact that all of this is not going to cost anywhere near what all the critics claim.
On their face, the arguments are nonsense. This is the biggest planned expansion of government in a century. Estimates are the federal government will be hiring between 100,000 and 250,000 new employees to oversee its new programs and spend the trillions of dollars being borrowed through debt instruments right now.
Unlike the rather facile and easy to impress Brooks, Charles Krauthammer takes a look at the spin and deconstructs it rather handily.
At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan’s Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.
And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.
As Krauthammer points out, none of the costly things that Obama pledged to focus on have anything to do with the down economy. They all do, however, include the the probability of causing even more damage if enacted.
And since they’ve been in office, Obama or his surrogates (mostly in the guise of Timothy “tax cheat” Geithner”) have talked down the stock market, the auto industry, the oil and gas industry, the health care industry, energy, banks, financial and the defense industry. They still don’t seem to realize what impact their words have on markets, or if they do, then one has to assume they’re doing this on purpose. I tend toward the side of ignorance, but at some point, after it has been pointed out to them over and over again, you have to abandon that belief and head toward the other conclusion. Their words, quite literally, are wrecking the economy.
Markets can’t stand instability and insecurity. When leaders talk about what’s wrong with this industry or that industry and what they intend on doing to punish or change how that industry does business, investors get very nervous. As you might imagine, they’re extremely nervous right now, as reflected by the Dow. They know that there is a government assault coming, in some form or fashion, on the industries I’ve mentioned. So they’re going to get out of the position they now hold in them and they’re going to refrain from investing in them until they’re clear what that assault will entail. And I don’t use the word “assault” lightly.
Health care, defense, oil and gas, pharma, auto, energy, housing, banking, finance etc. are all under a form of assault by the new administration. Health care will change and expand dramatically under government auspices, oil and gas will lose tax breaks, cap-and-trade will bury the auto industry and shoot energy prices through the roof – affecting transportion and manufacturing. Cram-downs affect the housing, banking and financial sectors. Who wants to invest in any of that when a judge can reward irresponsible home owners with a write down of their principle? Meanwhile responsible home seekers will see the interest rate go up by about 2 points to cover the losses. That’ll spur homebuying, won’t it?
Like Dale pointed out about the Red Kangaroo, you can see this coming from a mile off. And “useful idiots” like David Brooks climb back on the bandwagon and resume cheering the parade to economic ruin.
Thousands of patients with terminal cancer were dealt a blow last night after a decision was made to deny them life prolonging drugs.
The Government’s rationing body said two drugs for advanced breast cancer and a rare form of stomach cancer were too expensive for the NHS.
The National Institute for Health and Clinical Excellence is expected to confirm guidance in the next few weeks that will effectively ban their use.
Note the bold term. Government rationing body. Doesn’t matter what you want or need or are even willing to pay for, does it? Denied with no recourse except to get on an airplane, fly to the US and pay for it yourself … if you can afford all of that. And what if there were no US to fall back on?
When the government owns the problem, rationing will be the result. Take a look around you and tell me what you see going on economically. What do you suppose, then, will be the case if the same sort of system exists here? How can it be any different?
And a side note about unintended consequences. If you were the CEO of the drug company that developed these drugs, would such development be a priority in the future? Right now you have the relatively free market of the US to sell such products in. And as they’re used and studied, even better drugs will result. But if that market dries up because government is unwilling to pay the price for newly and expensively developed drugs, what’s the incentive for you and your company to do so?
[HT: Below The Beltway]
So, 95% are going to get a tax cut are they? Well, that’s great. But what the government gives on the one hand, it will find a way of taking with the other. It needs money folks, and it will get what it needs one way or the other:
A senior Senate Democrat said Tuesday he would consider taxing U.S. workers on their employer-sponsored health insurance to help pay for extending coverage to millions of uninsured Americans.
“I think that tax provision should be on the table,” said Senate Finance Committee Chairman Max Baucus, who will play a major role in writing the legislation to revamp the U.S. healthcare system as promised by President Barack Obama.
“It’s too aggressive. It skews the system,” he said of the tax benefit.
Most U.S. workers with health insurance get it through their employers — 160 million of them — although recent surveys have shown that number is declining as businesses try to cope with the rapidly rising cost of insurance.
The employer-provided benefit is not taxed as income and critics say the tax break encourages workers to seek a more generous benefit package than they might want if it was taxed.
You shouldn’t be getting as “generous” a benefit as you now have, you see – government decrees it and will remedy the “problem” with a tax. You skew their cobbled together system as if it is “the” system, not your welfare, which is most important.
Result – more money out of your pocket at the Doctor’s office (as you scale back the benefit to reduce the tax) and more money out of your pocket to the government.
And you wondered what you’d spend that $13 a week windfall on didn’t you?
This may never come to pass, but understand that when it comes to taxes, the “tax cut” promised is mostly smoke and mirrors – whatever income it preserves will be gotten some other way, mark my words. The government wants revenue and there’s only one large pool available too it. It may not be income, per se, that’s taxed, but government will manage to find a way to get what it needs from you in the coming years. It has bridges to build and signs to make.
UPDATE: If you need more proof of this, here it is:
Despite President Obama’s promise that “If your family earns less than $250,000 a year, you will not see your taxes increase a single dime. I repeat: not one single dime,” his new budget raises 45 percent of its revenue from energy taxes that will be paid by everyone who fills a gas tank, pays an electric bill, or buys anything that was grown, shipped, or manufactured.
Who in the world do you think will actually end up paying the “cap-and-trade” bills? It’s the “excise tax” of the ’30s and will have the very same effect. Read the whole article.