Friday, July 17, 2009

Big Blow and Big Thing

"We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount," Douglas Elmendorf, director of the Congressional Budget Office, told the Senate Budget Committee. "On the contrary, the legislation significantly expands the federal responsibility for health-care costs," he added.

Gregg Hitt, “Budget Blow for Health Plan: Congress’s Chief Fiscal Watchdog Warns of Overhaul’s Cost; Ammunition for Critics,: Wall Street Journal, July 17, 2009

Well, I’m happy to see the director of Congressional Business Office has come to an obvious conclusion that I share. In Obama, Doctors, and Health Reform (I Universe, 2009, available at,, and, had this to say,

“I only know one thing- and it’s a big thing. In the words of Archilochus, a seventh B.C. sage, “The fox knows many things, but the hedgehog knows one great thing.” Doctors are hedgehogs. Physicians are close to the ground in the clinical trenches. They know it’ll be impossible to superimpose a single-payer system on the current system – without radically changing the payment system, rationing, and expending trillions of dollars more.”

As a hedgehog, I know these little things contribute to the one big thing.

• The House and Senate bills do little or nothing to control costs, indeed, adding 46 million to the federal rolls guarantees higher cost.

• Without cost control, government entitlement programs always cost more and a lot more.

• The suggested means of controlling costs – prevention, electronic medical records, and coordinated care – are unproven means of cost control.

• Medicare and Medicaid expenses are increasing 34% faster than the private sector, shredding the argument that government has lower administrative costs.

• Government has only two fundamental means of controlling costs – paying providers less and rationing.

• Other cost controls being suggested - consolidation of physicians into groups and networks, paying hospitals and doctors for total care or episodes, and for managing population or panels of patients - are capitation revisited and have failed in the past.

• Increased costs in American health care compared to other nations are mainly due to superior technologies, demand for prompt access to these technologies, restoration of older Americans to full function through cataracts, joint replacements, and heart-related devices, cultural factors such as one of every five Americans being a recent immigrants, the American malpractice climate – not to physician greed or overtreatment or end of life care.

• The moral obligation arguments that the uninsured represent a moral blight on American has marginal merit but often falls apart when one examines who makes up the uninsured.

• The best means of controlling costs are;

- to give Americans and their families a given and generous amount of tax-free money to spend on health care;

- subsidize the poor and those unable to pay at reasonable levels;

- treat health consumers as responsible, intelligent people capable of making decisions about spending their own money;

- minimize interference by third parties, including Medicare and Medicaid, into doctor-patient interactions;

- foster market innovations such as retail clinics, worksite clinics, cash-only and concierge practices which minimize overhead and have predictable pricing;

- introduce universal catastrophic insurance to assure that no Americans goes bankrupt from health costs;

- have universal tort reform with caps on awards for medical injuries;

- put to rest the notion that a top-down bureaucracy can control costs, rationalize care, and micromanage all patient-doctor interactions without input by patients and doctors.

1 comment:

John said...

The Kaiser Family Foundation provides a ten-page PDF document comparing and summarizing the Senate and House versions of the health care reform proposals.

Do not believe anything you read or hear about this plan until you have done your own homework. The link is at the top of the screen, above the now obsolete plans that also appear below.

(I have not studied these two most recent permutations of the half-dozen or two that were introduced at the start of the session. My printer is not available at the moment, but when I finish leaving this link a few places I will go to the library where I can make myself a copy to study.)

Dr. Reece is probably correct that there is nothing to control costs. There never has been from the 1930's when Blue Cross and Blue Shield became the first group insurance plans in the country. The only way that they were permitted to come into existence was the understanding that there would not be any government controls on physician charges. The country was at the time recovering from the price controls of the Great Depression and the AMA, which opposed both the Blues, only relented in return for an agreement that there be no price controls.

Nothing has changed since then, which is one of the main reasons for the excessive costs of health care today.