Free Markets, Free People

reimbursement rates

Some thoughts on a changing health care scene

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

cost containment.  Or, as Surber puts it:

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

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

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

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

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

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

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

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

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

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

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