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Look What the Democrats Dragged In

December 24, 2009

There is a piece in the Wall Street Journal that has bad news about ObamaCare in almost every paragraph. It is written by Scott Gottlieb who is an internist and a fellow at the AEI and who also has financial interests in the health sector. He begins with the fact that Medicare and Medicaid agencies will receive much greater power over everything that actually concerns patients and their doctors. For instance, government employees will be able to decide that a given drug has to be replaced by a comparable cheaper version if it is to be covered by the public insurance programme. They can deny coverage for costly procedures or the use of expensive medical equipment. Said it before, will say it again: Death Panels.

In the past, patients could sue against such decisions (and Gottlieb cites an example in which the patient won the case). But with ObamaCare in place, the only type of health insurance provider that will be subject to lawsuits will be private ones, because “private health insurers must comply with new patient appeals rights under the Senate bill. The government has exempted itself from the same sort of protections” since patients will no longer be allowed to sue over Medicaid or Medicare decisions under the new law. Call me crazy, but to the French Cowboy that doesn’t sound like Democrats expect their future public health care-covered flock to be overly satisfied with what they will have. Also, I can’t help but have the impression that, with all the burdensome regulations, Democrats want to see the private insurance industry to die a (not too) slow death.

Next item mentioned by Gottlieb:

Primary-care doctors who refer patients to specialists will face financial penalties under the plan. Doctors will see 5% of their Medicare pay cut when their “aggregated” use of resources is “at or above the 90th percentile of national utilization,” according to the chairman’s mark of Section 3003 of the bill. Doctors will feel financial pressure to limit referrals to costly specialists like surgeons, since these penalties will put the referring physician on the hook for the cost of the referral and perhaps any resulting procedures.

In other words, your Medicare problem grows exponentially with the seriousness of your illness. The plan creates an incentive for doctors not to send you to a specialist. And the more likely you are to need extensive treatment by that specialist the stronger that incentive gets! This will do at least two things: It will delay the finding of correct diagnoses and it will delay the onset of effective therapies. And the more complicated your disease, ie the harder it is to combat it in and of itself, the more obstacles ObamaCare will place in your way to find treatment because you may have to see more than one specialist and you may need exactly the type of therapy that doctors will be disincentivised to give.

Furthermore, the bills include a pilot programme designed to make doctors give up small practices in favour of medical groups. The reason, Gottlieb writes, is that larger entities are much easier to regulate than individual practices. The drawback for patients in this scheme is that consolidated practices mean less freedom in doctor choice and longer distances to the next practice. (But we all love to take long bus rides when we’re sick, don’t we.) Gottlieb warns that the plan provides that this pilot programme can be extended nationwide without another vote in Congress.

We also know that ObamaCare is likely to stifle innovation: since therapies will be strongly regulated, experimentation that leads to improvements will no longer take place. Gottlieb adds:

Most improvements in medical devices come incrementally, with each generation of a device having small but clinically relevant advance over prior versions. This owes to the underlying hardware, which turns on embedded software and microprocessors that themselves undergo constant upgrades.

But if Medicare starts pricing similar devices off one another—a form of the same “reference” pricing schemes used in Europe—manufacturers will start holding back the small changes. Instead, they will introduce new models every four or five years that are sufficiently unique to fall outside of Medicare’s pricing scheme. Meanwhile, patients will have lost the benefit of regular improvements and annual upgrades that characterize medical devices today.

And here is why no one should take this lightly no matter in which insurance programme you see yourself once the law has been passed:

The impact of these provisions won’t be confined to Medicare. Private insurance sold in the federally regulated “exchanges” will take cues from Medicare, since they’re both managed from the same bureaucracy. Medicare will set the standard for medical care across the entire marketplace.

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