An exchange on the proposed Health Care Legislation
SmallGovTimes.com referenced articles on the FIVE FREEDOMS YOU WILL LOSE (under Obama Care); one reader concluded his comments with this:
The Times in a July 7 editorial argued “As much as 30 percent of all health-care spending in the U.S. -some $700 billion a year- may be wasted on tests and treatments that do not improve the health of the recipients,” Thus the remaining $239 billions over a decade do not matter.
No one can disagree with this best outcome / evidence-based system, and private insurance, too, will be greatly influenced by this change with the focus on value over volume. !
Dr. Armadio at Mayo clinic says, “If we got rid of that stuff, we save a third of all that we spend and that is 2.5 trillion dollars on health care. A third of that and that is 700 billion dollars a year. That covers a lot of uninsured people.”
Todd Zirkle Replies:
The comment above seems to be parallel to most suppositions put forward by those advocating socialism as the solution - they first miss-state the existing circumstances and then prescribe bigger, more centralized control as the “solution”.
For example: Medicare has a budget of about $450 billion but it actually costs closer to $600-to-$650 billion - how could that be ? (glad you asked).
To make the math easier we’ll assume that the US annual health-care budget equals $100 and of that Medicare equals $20 annually. Because the government tells doctors, hospitals, drug companies etc (I’ll call then the ” vendors”) that the Government will pay $20 for Medicare’s required services and no more, and because in fact those services cost the “vendors” about $27, the “vendors” pad the bills of the other private clients spreading the additional $7 over the remaining 80% of health-care bills. This cost-shifting is well known and not disputed.
The house and senate bills both create a “public option” (which is anything but optional). The Lewin Group, GAO, Heritage, Brookings and a simple reading of the many provisions show that the proposed bills (House and Senate) will force people into the “Govt. Option” to the magnitude of about 150-to-200 million people in five years. [By-the-way, none of these people forced into the “Option” will include current or former members of congress.] Included in the Democrat’s talking points is the concept that once created, the Government Plan will dictate the prices and thereby achieve the savings. Presumably these are the savings referenced in the comments above.
Two problems:
#1) Despite wishful thinking to the contrary, congress cannot outlaw gravity or dictate a reduction in COSTS. It can, and does, dictate a reduction in PRICES for Medicare services which results in cost-shifting. Thinking of my example above; $7 of the $27 Medicare portion of America’s annual health bill is shifted to the other 80% (mostly) private customers. But what happens when the 20% of the pie (Medicare’s approximate share) becomes an 80% share and the same percentage of cost shifting is needed to keep the lights-on in the hospitals, the doctors on staff and the prescriptions filled? Can we now shift the additional $28 over the last 20% (a 140% cost increase for that last, still private, group)? I don’t think so. To whom would we shift the costs? I don’t think the Chinese would be willing and there’s nobody else left to fleece.[1] What happens in all other socialized systems is that when the Government cannot shift costs, it limits care. We know that the vast majority of health-care spending is done for the benefit of 5% of the population, most of which is at or near the end of life. If you read the writings of Tom Daschle or Ezekiel Emanuel (Rom Emanuel’s brother) and other big-wig insiders, this is where they intend to “pay-for” their plan or “find the savings”. In other words a government committee will hand-out death sentences to middle-class Americans so that their tax dollars can “insure the uninsured” including approximately 12-to-15 million citizens of foreign countries, who just happen to be likely Democrat voters - are we getting the picture now?
#2) The Obama White House and various members of congress have floated the notion that the all powerful government authority will dictate a reduction in costs by eliminating unnecessary tests and other redundancies. This a 100% commitment to the efficiency of central planning. Now seriously, friends, fellow countryman, please - do you honestly believe that a centrally planned system can be more efficient that a bottom-up semi-free market system for proving anything, much less a basic and astronomically complex need such as health care for 200 million people? Apparently the Democrat members of Congress don’t think so, because they defeated an amendment which would require them and their families to be in the “Public Option”. Well if it ain’t good enough for them, is it good enough for your family? your kids? your parents? This explains why the White House strategy for heath care legislation has been – “Pass it quick – before they know what’s in it.
A third, but by no means minor, point: If Medicare contains a latent $100 million in savings, why hasn’t somebody just gone ahead and saved the money by canceling those unnecessary tests, unneeded procedures, overpriced drugs or whatever? If the NY Times, Dr. Armadio, you (dear writer) are aware of this $100 million lying around, don’t other people know about it, and if they do, why haven’t they issued the order to just save the money? It’s very easy to estimate a macro value for savings and I have 100% confidence that you are correct in suggesting that significant inefficiencies exit, but if they were so easy to identify then someone would have found them already. By the way; a corollary - if inefficiencies (or systemic fraud & abuse) exist in Medicare, would it not follow that by magnifying Medicare one would also magnify these problems? Would not a “Public Option” be proportionately worse in terms of unnecessary tests, unneeded procedures, overpriced drugs or whatever?
One key driver of unnecessary tests is “defensive medicine”, the practice of doctors thinking of legal liability as a basis for ordering tests and not medical indications. Those advocating a “Public Option” tend to suggest that an all powerful government health care giant will not be forced to make such defensive choices. It should be remembered that one very closest allies of the White House, and the House & Senate Democrat leadership, is the trial lawyers. Do you think that the lawyers will write themselves out business by this legislation? A central premise of the legislation is that all citizens are entitled to health care – hence any denial, big or small, will be the basis for litigation against the government. Remember the “Super-Fund” created to clean-up toxic waste sites? Do you recall what the lawyers did with that one? Something like 70% of the fund went to litigation (to the lawyers) without any actual clean-up being done. The same thing happens with federal law for education, disabilities, electoral reform, urban renewal - you name it – in other words the lawyers will be in thick-as-thieves with the new health care mandate and the imagined “savings” for a reduction in litigation costs (and defensive medicine) will never materialize and may well be the opposite of “savings”.
Get real – Obama care is a train wreck!
[1] If you doubt this scenario you should investigate the sad history of Southeast Hospital in Washington DC. A hospital located in the Anacostia area which closed because so many of its patients were Medicare or Medicaid that it had to close its doors because the reimbursements for these government paid medical services could not keep up with the costs to keep the hospital open. As with foreign experiences with socialized medicine, it really happened, its really a disaster and we are on a path to repeat these mistakes – on an unprecedented scale.
