If You Like Your Plan You Can Keep It, Less than Half the Time

A must-read interview from Ezra Klein – just note this portion, following Coburn’s remark that “The disease is that Medicare has set a price at which they’ll pay a physician for something. So why are we 125,000 primary care physicians short right now?”

EK: I imagine you’d argue we’ve underpriced primary care.

TC: Why do we have an excess of orthopedists, of general surgeons, of urologists – why do we have an excess in all these other fields?

EK: The question is how do you define excess? In the market version of this, it’s not clear that people know the care that’s best for them. When you say how how many primary care physicians we need, it may just be that Americans like a lot of specialty care.

TC: But there are studies showing that when you go to a primary care doctor with the same symptoms that you might take to a specialist the care costs half as much. We’ve distorted the market through government pricing where you don’t have a competitive market in primary care. So what are we doing? We’re using physician extenders. That saves us some money. But on the 10 percent who needed to see a real physician? It costs you 20 or 100 percent more because of the misdiagnosis. I make the point in the book that the Amish are the best health care purchasers I know because they’re informed and they question everything you do.

Let me give you an example. I just had a bout with prostate cancer. I got radiation implants. Eighty little radioactive seeds. They make you radioactive for six weeks.

EK: I enjoyed your work in “The Avengers,” by the way.

TC: [Laughs] So they called me up and asked me to come in and get a CT scan. I said, why? They said, to see if we’ve placed them right. I said, what will you do if you didn’t? They said, uh, it’s part of the protocol. I said, you didn’t answer my question. What will you do if you didn’t place them right? Will you place more? They said, no, you can’t take any more radiation. So I said why are we doing this scan?

About a month ago the American College of Urology was in here with their president. And I asked these doctors, do you all get a CT scan after you place these? I said, why? No informed consumer had ever challenged them. They were just following the protocol. Best practices. Market forces would have said, that’s stupid. You’re charging me and my insurer thousands more for this scan and there’s nothing you’ll do to act on the knowledge.

Kate Nix and John Fleming at The Heritage Foundation:

The Medicare trustees (who issue reports on the program’s fiscal stability) project that under current law, Medicare will rack up $26.9 trillion in unfunded obligations over the next 75 years. In a more likely scenario, that number soars to $36.9 trillion. American taxpayers will pay the costs, and seniors will suffer the effects of a program that’s going broke.

What’s that burden look like today? Working Americans pay for about 88 percent of seniors’ Medicare benefits through payroll taxes. Right now, that tax rate is set at 2.9 percent, costing a median household about $1,430 in 2010. But if Congress turns to tax hikes alone to cover the deficit in Medicare Part A (which covers inpatient care in hospitals), that rate would have to go up to 5.33 percent, costing that same household $2,630 per year.

President Obama’s health care plan makes things even worse for the very seniors Medicare serves. Nix and Fleming show that Obamacare cuts $421 billion from Medicare in order to pay for other programs that aren’t even for seniors. On top of that, a large chunk of the Obamacare cuts come from slashing reimbursement rates for doctors, meaning that seniors’ access to health care providers is at risk, with 40 percent of providers in danger of closing their doors by 2050.

An interesting piece in The Daily on the question: What does “comparative effectiveness” actually mean?

In theory, it means finding the best treatment for any given medical problem. But how are decisions made about what’s best? What if drug A cures 50 percent of people and costs $1 a pill and drug B cures 52 percent of people with the same problem but costs $10 a pill? The cost savings of, say, treating a million people each year on Medicare by using drug A are huge – but what if you happen to be in the 2 percent for whom only drug B works, and there’s no surefire way to figure that out before treatment?

The problem with comparative effectiveness (according to Peter Pitts, president of the Center for Medicine in the Public Interest and a former FDA associate commissioner) is that it’s very different from clinical effectiveness. The former aggregates health care outcomes for a given treatment, while the latter addresses variation within those outcomes – what works best and why, for the individual.

In a recent commentary in Drug Information Journal, Pitts warns that comparative effectiveness, as presently conceived, not only risks derailing the development of personalized medicine, it could end up pushing health care toward the slippery slope of rationing. There is always a trade-off between care and cost, but that trade-off keeps changing as medicine advances. What’s crazy expensive today could be far cheaper in five years’ time, and it could trigger further incremental breakthroughs in treatment.

A glance at the AHRQ’s link-heavy website shows that a lot of its reports are already old, while the billion dollars it got from Congress has yet to deliver any major new findings. This isn’t particularly surprising: Comparative effectiveness research takes time. But what if the eventual results end up being out of date – or get challenged as critically flawed? What will a government “comparative effectiveness” health rep say in such cases?

Again, we don’t know, because the government doesn’t think it needs to regulate itself as a provider of health care research and purchaser of health care. Even if you are an opponent of so-called socialized medicine, you, me and everyone else needs socialized regulation for promoting medicine and treatment. Government should play by the same rules it sets for others. In this case, our future depends on its doing so.

Even Elizabeth Warren doesn’t like it.

Yet this very dynamism is what led Democrats to target the industry. As part of writing ObamaCare, they decided that all “stakeholders” should contribute something, but changes to the ordinary corporate tax code wouldn’t raise enough money and would have hit many other innocent bystanders in manufacturing. So they chose an excise tax. About the only exemptions are for things that retail consumers buy directly, such as contact lenses or hearing aids.

So for the first time ever, the Internal Revenue Service is now writing rules that will treat some of medicine’s most inventive and complex products the same way it does gas, cigarettes, liquor and wine, guns, airline tickets and tires. Those are the commodities on which the political class normally attaches excise taxes, and the appeal is that the levies are hidden in higher prices, rather than listed separately like a sales tax. This is somewhat awkward for a law that claims to aspire to make health care more “affordable.”

The device tax is also worse than advertised because it won’t apply to actual sale prices. The industry’s supply chains and distribution networks are idiosyncratic, but different buyers usually pay different prices due to rebates and discounts. The draft IRS rules don’t credit these common business practices and instead apply to the “highest price for which such articles are sold to distributors in the ordinary course of trade” or the “normal method of sales,” as if there is a normal method. So the tax will be assessed on income that device makers never earn.

To the extent they can, device makers will pass this tax on to the hospitals and provider purchasing groups that buy their products, which will ultimately show up in insurance premiums. Or they’ll offset the costs with layoffs or by slashing research and development. Less innovation, fewer jobs, higher health costs – the usual ObamaCare trifecta.

These cuts illustrate the program is no longer focused on the poorest of the poor and sickest of the sick:

Four-year-old Celestia “Letty” Young, unable to talk, walk or even sit up on her own because of a rare muscle disorder, knew nothing of Thursday’s votes in the Legislature that could decide whether she stays in the only home she has known or is permanently forced into a hospital against her parents’ wishes.

Those votes came when the Illinois House and Senate sent Gov. Pat Quinn a package of $1.6 billion in budget-driven Medicaid cuts that its sponsors say are necessary to avert the collapse of Illinois’ burgeoning health-care plan for the poor.

“We believe this will save the Medicaid program,” said Julie Hamos, director of the state Healthcare and Family Services department.

Hundreds of thousands of low-income Illinoisans would see their access to health-care services curtailed or ended, and hospitals and nursing homes would be reimbursed less by the state under a plan designed to help close a $2.7 billion gap Quinn has identified in the state’s Medicaid program.

Included in those cuts is a provision affecting 536 children with “medically fragile” conditions who live at home on ventilators or who require around-the-clock nursing care, like Letty Young. For the first time, their families would be asked to share more in the state’s costs for their children’s highly specialized services, saving the state $15 million.

Hamos told reporters that families in the agency’s Medically Fragile/Technology Dependent program will have to begin paying $400 a month co-payments, on average.

“We thought it was fair, in the world we live in, that there be some co-payments,” Hamos told a House panel Thursday.

But Myra Young, Letty’s mother, said that isn’t something her family can afford and may necessitate moving her daughter, who was born with congenital fiber-type disproportion, permanently from their two-bedroom condo at North and Clark into a hospital under a different Medicaid program that would ultimately wind up being more costly to the state.

Forget California’s economic woes – let’s make Medicare for all!

Universal coverage, Medicare for all, single payer – call it what you will. It’s clear that conservative forces are determined to prevent such a system from ever being introduced at the national level. So it’s up to the states.

The catch is that to make universal coverage work at the state level, you’d need some way to channel Medicare, Medicaid and other federal healthcare funds into the system. At the moment, that’s difficult if not impossible.

But legislation quietly being drafted by Rep. Jim McDermott (D-Wash.) would change that. It would create a mechanism for states to request federal funds after establishing their own health insurance programs.

If passed into law – admittedly a long shot with Republicans controlling the House of Representatives – McDermott’s State-Based Universal Healthcare Act would represent a game changer for medical coverage in the United States.

It would, for the first time, create a system under which a Medicare-for-all program could be rolled out on a state-by-state basis. In California’s case, it would make coverage available to the roughly 7 million people now lacking health insurance.

Another two votes on partial repeal coming before Supreme Court ruling:

Majority Leader Eric Cantor (R-Va.) said in a planning memo that the House will vote on two partial repeal bills as early as June 4. One would repeal the health law’s tax on medical devices, and the other would relax the law’s restrictions on the use of tax-preferred health savings accounts (HSAs).

The medical-device industry has long opposed the new excise tax imposed under the Affordable Care Act, and Republicans have recently trained their focus on the HSAs policy. The law bans the use of HSAs to pay for nonprescription drugs unless a doctor writes a prescription anyway.