Free Markets, Free People
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.
USA Today brings us a story that should surprise no one. Medicare, the supposed model of a government run health care system, is finding that fewer and fewer doctors are willing to take on new patients under that system. They cite the low payments Medicare offers (or perhaps forces) for patient treatment. Baby boomers just now entering the system are going to find their choice of a doctor restricted.
The numbers break down like this:
• The American Academy of Family Physicians says 13% of respondents didn’t participate in Medicare last year, up from 8% in 2008 and 6% in 2004.
• The American Osteopathic Association says 15% of its members don’t participate in Medicare and 19% don’t accept new Medicare patients. If the cut is not reversed, it says, the numbers will double.
• The American Medical Association says 17% of more than 9,000 doctors surveyed restrict the number of Medicare patients in their practice. Among primary care physicians, the rate is 31%.
Note especially that final group. Primary care physicians are the group of physicians that the newly passed health care reform law depends on to implement its “preventive care” regime.
The reason is rather simple and straight forward – Medicare offers 78% of what private insurance pays in compensation for a doctor’s services. Why doctors are leaving or restricting new Medicare patients is rather easy to understand as well:
“Physicians are saying, ‘I can’t afford to keep losing money,’ ” says Lori Heim, president of the family doctors’ group.
Consequently they cut or drastically restrict the source of the loss. While most doctors are not going to turn away existing Medicare patients, they may not accept new ones and finally, through attrition, close their practice to Medicare patients.
It isn’t rocket science – no good businessman is going to continue to do things in which the net result is a loss of money. And a doctor’s private practice is a business – one which employs a number of people. He or she, like any business person running a small business, cannot afford the losses. So they identify the problem and eliminate it.
As this continues it will put them in a direct confrontation with the federal government. It is anyone’s guess, given the current administration’s choices for wielding power, how that will turn out. But what this rejection of the compensation offered by government is doing is bringing to the fore is one of the underlying conflicts of the new health care law – the premise of the law is that government can control costs (and payments) and thereby make medical care less costly. The doctors are saying, go for it, but I’m not playing.
At some point, government is going to have too address those who make that declaration. We’ll then see how free of a country we really are, won’t we?
Yes, yes, I know – it comes as a complete surprise. No question, we all thought having more covered by insurance, no pre-existing conditions, no caps on payouts and lower premium costs – all the while run by our efficient government – would surely lower costs. It’s just logical, right?
President Obama’s health care overhaul law will increase the nation’s health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.
You know, you want to laugh at this because most people who gave up on moon ponies and unicorns when they were 8 knew that what was promised by this bill wasn’t possible. But it is hard to laugh at this level of mendacity. Isn’t it interesting that now suddenly the truth begins to filter out – after the fact, of course.
USA Today, in true sycophantic fashion, tries to lessen the blow to the administration by calling it a mixed verdict. It also notes it is the first look at the legislation by “neutral experts”. That’s because it was so important to rush this bill through without giving anyone time to read or analyze it – you know, so the benefits could kick in … in 2014.
And what do these experts find? Well it is less than a “mixed verdict”. As I read it, it’s an outright condemnation of the law.
[T]he analysis also found that the law falls short of the president’s twin goal of controlling runaway costs. It also warned that Medicare cuts may be unrealistic and unsustainable, driving about 15% of hospitals into the red and “possibly jeopardizing access” to care for seniors.
Translation: this goes to the central political point about the bill. Who among the politicians in DC are going to be willing to take on the necessary cuts to Medicare promised by the bill (to “pay” for it) and alienate one of the most powerful demographic election blocs?
The Medicare actuary says no one.
The report acknowledged that some of the cost-control measures in the bill — Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings — could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.
“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.”
Of course they are, and anyone but the moon pony crowd knew that going in. It’s like the promise of eliminating “waste, fraud and abuse”. If there was any appetite or ability to do that, don’t you think the estimated $60 billion a year in Meidcare waste, fraud and abuse would have been eliminated by now?
And what if they did make the cuts? Anyone, what is the likely reaction of health care providers? Uh, “we don’t take Medicare/Medicaid patients anymore”? That is exactly what will happen. That means those with government insurance coverage won’t be able to find access (unless that too is eventually mandated).
A separate Congressional Budget Office analysis, also released Thursday, estimated that 4 million households would be hit with tax penalties under the law for failing to get insurance.
The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries. At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any reforms.
The report found that the president’s law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1%. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.
The administration doesn’t even argue the point, claiming that’s a bargain for insuring 95% of the country. Of course, what USA Today doesn’t point out is that 75% of the 4 million households that will be hit with those tax penalties average less than $60,000 a year individually and families making less than $120,000 a year.
Also keep in mind that the CBO analysis and estimate are based in the assumption that absolutely everything in the bill goes as planned – to include the Medicare cuts. Or said another way, the $311 billion “cost’ is a joke and it will most likely cost far more than that.
The CBO also looks at Medicare:
In addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program. Enrollment would plummet by about 50%, as the plans reduce extra
benefits that they currently offer. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.
That brings us back to the politics and the polite word used -’unsustainable’ – to mean the cuts just aren’t going to happen.
USA Today ends its article with this:
In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.
What they’re talking about is this:
One other interesting note from this study was a paragraph on the new Community Living Assistance Services and Supports insurance program for home care, known as the CLASS Act.
While it produces a $38 billion net savings through 2019, that’s mainly because you have to pay five years of premiums before you can start taking advantage of the program.
After that, the Medicare Actuary doesn’t like the way it looks in financial terms.
“Over the longer term, expenditures would exceed premium receipts, and there is a very serious risk that the program would become unsustainable as a result,” the study says.
“Unsustainable” – pay 5 years of premiums before you get the first benefit and the “expenditures would eventually exceed premium receipts”. Sounds exactly like every other program I’ve seen designed and engineered by politicians. That’s why we’re in the freakin’ fiscal mess we’re in now.
And the moon pony crowd keeps believing you can get something for nothing and that we can fix crap like this to where it will actually work and cost less too.
Byron York’s count has it at 209 “no”, 204 “yes”, with 18 undecided. David Dayden at FDL puts the count at 191 “yes”, 206 “no” (205-209 with leaners), with 17 undecided.
As you can imagine, the pressure on the remaining 17 or 18 is going to be enormous. Bart Stupak claims it has been a “living hell”.
Still nothing out of the CBO which means a Saturday vote is unlikely.
Obama’s interview with Brett Baier of Fox is likely to do nothing to change minds about health care, just as his speech in Ohio had little effect. He may as well have gone to Australia as this is shaping up. But it is clear he and the Democrats want to avoid any talk about “process” and continue to wave it away as something the American people just aren’t concerned with. Big mistake.
And although he wouldn’t own up to it in the Baier interview, Obama has told others that the fate of his presidency is on the line with this vote.
All it took for Dennis Kucinich to cave was a 45 minute ride on Airforce One. The liberal Ohio Democrat has found a way to rationalize his change of mind.
If you don’t think this is having an effect throughout the land, just remind yourself of the Scott Brown race, where Brown ran for liberal lion and chief health care reform advocate Teddy Kennedy’s seat as the “41st vote against health care”. Then cast your eyes west and note that Barbara Boxer, another Senate liberal is vulnerable as well.
Speaking of California Senators, Dianne Feinstein’s “National Insurance Rate Authority” has been dropped from the reconciliation bill. Since it has nothing to do with budgetary matters, it can’t be included. If this monstrosity passes, look for her to attempt to add it at another time as an amendment to some other Senate bill.
And Code Red suspects two new “yes” votes for the bill, from California Democratic Reps Dennis Cardoza and Jim Costa have to do with announced water allocations for the water starved Central Valley in the state. Yesterday the Interior Department moved up the March allocation, something never done in the past. A “back room deal” for their votes?
One of the things Baier did in his interview is question the health of Medicare. He got the president to admit that the bill doesn’t fix the structural problems of the program. More and more medical providers are recognizing that problem and opting out of taking Medicare patients because they claim they can’t afford them. And if Medicare is in bad shape, Medicaid is in worse shape. As if to emphasize that point, drug store chain Walgreens has announced that after April 16th, it will no longer take new Medicaid patients.
The point, of course, is this “reform” does nothing to address the structural problems of the two government run systems which are at the core of the health care cost problem in the US.
Last, but not least, the Attorney General of Virginia has announced the state’s intention to sue the federal government if the present health care bill is passed under the “deem and pass” rule. Virginia has already passed a law declaring it illegal for the federal government to require individuals to purchase health insurance.
Ezra Klein says he’s been looking for polling data concerning Medicare prior to its passage to determine how popular it was at the time. If it wasn’t particularly popular, his obvious intent is to use that to make the argument that Democrats have a good chance of surviving a vote on this monstrosity by saying “but people love Medicare now”.
He finds that Greg Sargent has beaten him too the punch:
In a last-minute effort to stiffen Dem spines, senior Dem leadership aides are circulating among House Dems some polling numbers from the 1960s that underscore how controversial Medicare was in the months leading up to its historic passage.
Dem leadership staff is highlighting a series of numbers from 1962 on President John F. Kennedy’s proposal. In July of that year, a Gallup poll found 28% in favor, 24% viewing it unfavorably, and a sizable 33% with no opinion on it — showing an evenly divided public.
A month later, after JFK’s proposal went down, an Opinion Research Corporation poll found 44 percent said it should have been passed, while 37% supported its defeat — also showing an evenly divided public.
Also in that poll, a majority, 54%, said it was a serious problem that “government medical insurance for the aged would be a big step toward socialized medicine.”
After Lyndon Johnson was elected, a Harris poll found only a minority, 46%, supported a Federal plan to extend health care to the aged. Today, of course, Medicare is overwhelmingly popular.
That brings me to the most important question: is Medicare “overwhelmingly popular” or is Medicare “popular” because it is what seniors are stuck with? There’s a big difference there. Is Medicare what seniors would have if they had a choice? Of course there’s no way to determine that, but the popularity (and, as many claim, the necessity) of “Medigap” insurance to cover the obvious holes in coverage speak to a clientel which may be less enamored with the mandatory system than we think.
Much has been made of seniors concerned about losing their coverage – government coverage, for heaven sake! Supporters of the travesty now in Congress claim that senior’s fear of losing their coverage is driven by their satisfaction with it. Logically that’s a leap. When you have no choice in the matter and what you have is being threatened, you’re likely to want to at least keep that. That doesn’t necessarily mean you love it or you’re satisfied with it or you’d wish it on anyone else. At most, it just means it beats the unknown.
Everyone’s favorite maniac congressman, Alan Grayson of Florida, introduced a bill yesterday that would quite simply open up Medicare to all citizens and legal residents of America. It is the purest “public option” proposed thus far. And it might just work.
Already the leftosphere is singing Hosannas. From Firedoglake:
As quixotic efforts go, I’ll take Alan Grayson’s HR 4789, a four page bill which “allows any American to buy into Medicare at cost.” You cannot possibly get more simple than that, it would not add one cent to the federal deficit, and it would offer people the option of purchasing Medicare (and its provider network) or purchasing an insurance product from a private company.
This evening Alan Grayson, Orlando’s spectacular and effective fighter for ordinary working families in a Congress that overwhelmingly caters to wealthy and powerful special interests, introduced the most real and straight forward healthcare reform bill that’s come up so far. Unless Obama makes the House leadership kill H.R. 4789– a distinct possibility– this should pass the House more easily than anything that’s been proposed for healthcare reform so far. And I bet it could even win cloture in the Senate! His bill offers the opportunity for everyone in the country to buy into Medicare. “Obviously,” said Grayson, “America wants and needs more competition in health coverage, and a public option offers that. But it’s just as important that we offer people not just another choice, but another kind of choice. A lot of people don’t want to be at the mercy of greedy insurance companies that will make money by denying them the care that they need to stay healthy, or to stay alive. We deserve to have a real alternative… The government spent billions of dollars creating a Medicare network of providers that is only open to one-eighth of the population. That’s like saying, ‘Only people 65 and over can use federal highways.’ It is a waste of a very valuable resource and it is not fair. This idea is simple, it makes sense, and it deserves an up-or-down vote.”
To the Huffington Post:
When Rep. Alan Grayson (D-Fla.) first became a father, his health insurance company refused to pay for the birth of the child, and Grayson had to pay $10,000.
Grayson told the House that story Tuesday during an impassioned and personal speech urging fellow lawmakers to support legislation that would allow Americans to buy into Medicare. Grayson introduced a four-page bill Tuesday that would make that a possibility. He asked would-be opponents to grant Americans the option to buy into the same health care plan that the federal government already offers.
And, of course, Daily Kos:
So instead of pontificating about how there is no SP or PO in the current HCR bill, he is solving the problem by offering a separate simple bill that would essentially do the same thing…allow Medicare for All…
There would be no pre-existing conditions and no medical underwriting, presumably the pools would be large enough to spread the risk.
There is no funding required for this since subsidies are not proposed for this bill. It would essentially be a PO starter. Then it could be added as an option to the exchange and subsidies could in theory be applied just like any other plan in the exchange.
We should support an “Up or Down” vote on this plan!!!
The bill’s genius is its simplicity, and specifically the promise to charge premiums to new enrollees, which would appear to make the bill deficit neutral. Here’s the entire text:
H. R. 4789
To amend title XVIII of the Social Security Act to provide for an option for any citizen or permanent resident of the United States to buy into Medicare.
IN THE HOUSE OF REPRESENTATIVES
March 9, 2010
Mr. GRAYSON (for himself, Mr. FILNER, Mr. POLIS of Colorado, Ms. PINGREE of Maine, Ms. SHEA-PORTER, Ms. SCHAKOWSKY, Mr. FRANK of Massachusetts, Mr. KUCINICH, Ms. EDWARDS of Maryland, Ms. WATSON, and Ms. JACKSON LEE of Texas) introduced the following bill; which was referred to the Committee on Ways and Means
To amend title XVIII of the Social Security Act to provide for an option for any citizen or permanent resident of the United States to buy into Medicare.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Public Option Act’ or the `Medicare You Can Buy Into Act’.
SEC. 2. UNIVERSAL MEDICARE BUY-IN OPTION.
(a) In General- Part A of title XVIII of the Social Security Act is amended–
(1) in section 1818(a), by striking `or 1818A’ and inserting `, 1818A, or 1818B’; and
(2) by inserting after section 1818A the following new section:
`(a) In General- (a) Every individual who–
`(1) is a resident of the United States;
`(2) is either (A) a citizen or national of the United States, or (B) an alien lawfully admitted for permanent residence; and
`(3) is not otherwise entitled to benefits under this part or eligible to enroll under this part;
shall be eligible to enroll in the insurance program established by this part. An individual may enroll under this section only in such manner and form as may be prescribed in regulations, and only during an enrollment period prescribed in or under this section.
`(b) Enrollment; Coverage- The Secretary shall establish enrollment periods and coverage under this section consistent with the principles for establishment of enrollment periods and coverage for individuals under section 1818, except that no entitlement to benefits under this part shall be effective before the first day of the first calendar year beginning after the date of the enactment of this Act.
`(1) IN GENERAL- The provisions of subsections (d)(1), (d)(2), and (d)(3) of section 1818 insofar as they apply to premiums (including collection of premiums) shall apply to premiums and collection of premiums under this section, except that–
`(A) paragraphs (4) and (5) of section 1818 shall not be applicable; and
`(B) the estimate of the monthly actuarial rate under section 1818(d) shall be computed and applied under this paragraph based upon costs incurred for individuals within each age cohort specified in paragraph (2) rather than for all individuals age 65 and older.
`(2) AGE COHORTS- The age cohorts specified in this paragraph are as follows:
`(A) Individuals under 19 years of age.
`(B) Individuals at least 19 years of age but not more than 25 years of age.
`(C) Individuals at least 26 years of age and not more than 35 years of age.
`(D) Individuals at least 36 years of age and not more than 45 years of age.
`(E) Individuals at least 46 years of age and not more than 55 years of age.
`(F) Individuals at least 56 years of age and not more than 64 years of age.
`(d) Treatment- An individual enrolled under this part pursuant to this section shall not be treated as enrolled under this part (or any other part of this title) for purposes of obtaining medical assistance for medicare cost-sharing or otherwise under title XIX.’.
There are no hidden takeovers of medical reporting systems, individual mandates, abortion mandates, or anything else. Nor is anything about pre-existing conditions, “Cadillac plans”, or any of the other issues plaguing ObamaCare at the moment. If you want to buy in, you can. If not, then so be it. So simple it’s almost irresistible. Especially when one considers the popularity of a public option in most opinion polls done over the last year. To be sure, when people are confronted with the costs of a public option, or most anything else promised via ObamaCare, they lose interest. But Grayson’s bill doesn’t have that problem, seemingly, because it’s charging premiums, and there aren’t even any provisions calling for subsidies. Again, it’s almost irresistible.
However, if we game out how this would actually work, then we start to see the problems.
First off, since the vast majority of us get insurance for ourselves and our families through our employers, we won’t likely be buying into Medicare. Nothing about Grayson’s bill changes the employer/health insurance relationship, so as long as we stay employed, we’ll remain a part of that system. Seniors, of course, are already a part of this system, so there’s no change there as well. Those most affected will be part-time employees not otherwise covered, the self-employed, the unemployed and the basically uninsurable. Other than the self-employed, the remainder of these likely Grayson bill participants are not likely to be able to afford the full cost of Medicare premiums, assuming that the government actually charges full price. So the emergence of subsidies is almost guaranteed, which will cost taxpayers even more.
Secondly, the more people who enroll in Medicare, the more providers accepting Medicare payments that will be necessary to accommodate them. Since Medicare pays doctors at a lower rate than private insurers, doctors and hospitals won’t want to take on many of these new patients, who basically cost them money. Just by way of example, get out your trusty phone book, call around for a dentist in your area who takes Medicaid payments, and see if they have any openings in the next year or two. That’s what would happen with a Medicare-for-all plan as well. Oh, and don’t forget that Medicare turns down requests for reimbursement at a much higher rate than private insurers do.
Most significantly, with a public insurer in the market place, one who can dictate prices and standards to providers, and who does not have to turn a profit in order to stay in business, the entire health insurance dynamic will be irrevocably altered. In order to stay in business at all, private insurance companies will need to join the Medicare and Medicare Advantage network, and will subject to whims and vagaries of Congress when it comes to reimbursements, executive pay, and whatever else suits Capitol Hill’s fancy (which, naturally, will be a great source of graft). Restrictions on denying coverage to those with pre-existing conditions, and mandates for covering everything from toe fungus cream to abortion will be introduced to the menagerie of legislation supporting Grayson’s simple four-page bill, until one day the idea of just taxing taking contributions from everyone’s paycheck for Medicare insurance and giving it to them “for free” is but a small step that might be done in a three-page bill. Eventually, Medicare-for-all and universal health care will be indistinguishable, including the waiting lines, “death panels” and substandard care.
Just one small, simple, four-page step. That’s all it will take. And it might just work.
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.