Predicting Obamacare
Meet health care rationing. Its name is Medicare, and it's brought to you by the government, and it's shades of what's to come under Obamacare. AEI's Dr. Scott Gottlieb writes in the WSJ about how Medicare denied implantable cardiac defibrillators to patients and certain drugs as well:
Take the travails of the pharmaceutical company Sepracor and its drug Xopenex, an innovative respiratory medicine that competes with the chemically distinct and much cheaper generic albuterol. Both are inhaled aerosols used to treat asthma and chronic obstructive pulmonary disease. Xopenex has the same benefits as albuterol, but some believe fewer of its cardiac side effects. Medicare didn't agree.The agency tried to make a "national coverage decision" on Xopenex but couldn't come up with a clinical justification to limit the drug's usage. So Medicare manipulated its payment process, saying it would pay Xopenex a price equivalent to the "least costly alternative" form of generic albuterol, 10 cents a treatment compared to about $2.50 for Xopenex. Then Medicare was sued by a patient, and a Federal court recently ruled the agency exceeded its authority.
...It's not a stretch to say that Medicare spent hundreds of cumulative man-hours focusing on Xopenex while other priorities languished. The question is why? There weren't safety concerns. Xopenex may have been used in lieu of a cheaper alternative, but at peak Medicare sales of about $300 million it represented far less than one one-thousandth of the agency's budget. Simply put, a few staffers inside Medicare were consumed with the drug and its higher price--revealing a process that is capricious and often disconnected from science.
...When private plans ration care, patients can appeal directly to an insurer's medical staff. Only a small fraction of Medicare's denied claims--about 5%--are ever formally appealed because its process is so impenetrable. People can also switch insurers, and in many cases patients chose a policy because it matched their preferences in the first place. These options don't exist in a government health program.
Yes. With your private plan, you can appeal directly to a real person. Who will deny you in person. But when they deny it, you can just switch to a new plan, which will deny it because it's for a pre-existing condition.
Clinky at September 30, 2009 11:03 PM
That's as may be, but you can still PAY for the procedure out of your own pocket.
Government gets its way, you won't be able to do that because you'll be imposing an unfair allocation of resources. Social Justice requires that your betters in government decide who is more deserving of limited government capital.
You guys still don't get it, do you? You still believe that the "public option" is just going to be one of many, and this isn't a prelude to a complete government takeover of the healthcare industry.
Your kind will be the first with your backs against the wall when the revolution comes.
brian at October 1, 2009 6:57 AM
I'm hoping someone can clarify something for me about the term, "rationing".
In the current healthcare debate, you often hear people from the pro-reform camp making the argument that we already have de-facto health care rationing, because for most of us, decisions regarding what treatments we get – whether we get an expensive MRI or a cheap X-Ray, whether we get the latest drug or an old standby, whether our condition merits the attention of that expensive specialist, whether we get surgery or not – are limited by what our companies have opted to cover or not. Given that for most people, insurance is employer-provided, there's little choice in the matter of who covers us or what gets covered. All we have is an appeal to a faceless bureaucracy if we disagree with what options we're presented. Rationing.
When presented with this, reform opponents argue that health care is not meaningfully rationed in the U.S., because we can buy private policies, or pay out of pocket for expensive treatments. Because our treatment options are truly only limited by the size of our wallets, we don't have rationing.
But wait, here comes Amy trotting out Medicare as an example of rationing. Why is it rationing when Medicare does it but not rationing when Blue Cross does the exact same thing? Old people can still buy more expensive drugs or pay for costly treatments, out of pocket, if they want. The situation with Medicare is no different than a private company making these decisions – they opt to cover some things, and not others, and if you want more options, cough up the dough. The only difference is the Medicare is a government program. Therefore, when they opt to cover the cheaper standby but not the expensive alternative, it's "rationing". But when Blue Cross does it, it's something else.
This doesn't make sense to me. Can someone explain why it's "rationing" when Medicare does it, but not rationing when a private company does it, when the clients of both companies can go somewhere else for treatment if they can afford it? Does the term "rationing" only apply to government-sponsored health care coverage?
Whatever at October 1, 2009 8:48 AM
If memory serves, once you use Medicare, you are forbidden from paying for care by other means.
In other words, Medicare is rationing precisely because it forces you to use it exclusively. So-called Medigap policies are explicitly defined and regulated by Medicare.
So for seniors forced off of private insurance by the existence of Medicare, they have to make a decision up front - Medicare or cash. Because they don't have that option after the fact.
Basically, you can tell Blue Cross to suck a tailpipe. Medicare is like herpes, once you've got it, you've got it till you die.
brian at October 1, 2009 8:55 AM
Just goes to show, there is no such thing as a free lunch -- no matter who's serving it up.
We live in a world of limited resources and economic inequality, and are just going to have to deal with it -- one way or another.
Jay R at October 1, 2009 11:00 AM
Of course we need health care rationing--it is obvious. Does anyone propose we make heroic (and exceedingly expensive) efforts in every case to maintain "life"?
The Republican hero, Terri Schiavo, comes to mind, I guess she would still be on the tubes if the R-Party had it way. Did they convene a special session of Congress to save her life? (Oh yes they did. That is precious, no?) And who would be paying for the tube lady? You, through your insurance premiums. What fun.
Kaiser Permanent rations care, and Alkon loves the place. They have "death panels," they just use a different name. They do not buy the latest and greatest in equipment immediately, but wait for the fiscal year to end, look at budgets, and buy prudently. That is rationing care also.
In fact, we need death panels. We need to pull the plug on the elderly who are terminally ill.
A decision best left to the private sector? Maybe--but there is money to be made extending life and billing insurance companies now. One reason why a family of four pays more than $13k a year for coverage.
In Great Britain, care costs about half.
I prefer a public bureaucrat, following a rule book, decides when to pull the plug, and I hope it is early. After age 80, a person has lived their life. What is the point of another six weeks of life, and a $400,000 bill?
Remember Terri Schiavo--Sarah Palin's running mate in 2012?
It is sad to Alkon and libertarians confuse this issue, and become punks for the right-wing.
i-holier-than-thou at October 1, 2009 11:06 AM
In a non-rationing market, buyers bid up prices until supply equals demand, and each buyer is welcome to pay for as much as she wants. With rationing, a buyer is prevented from purchasing as much as she wants, in order to give more buyers a chance to purchase some of a good. Example: let's say that someone needs 10 chemotherapy treatments in order to eradicate her breast cancer. In a free market, she would pay for the ten treatments and live, or not pay and die. In a rationing scenario, the government only allows her to buy 2 treatments, and issues a press release claiming to have reduced the cost of chemotherapy by 80%; she then dies.
Of course the actual situation is more complicated. In the real world, competition increases supply and lowers prices, helping more people overall. In the United States the government currently rations indirectly by fixing prices so low that providers stop serving Medicare and Medicaid patients. The proposals in Congress now accelerate this, instead of reforming it.
Pseudonym at October 1, 2009 11:11 AM
If memory serves, once you use Medicare, you are forbidden from paying for care by other means.
If correct, this would be a huge difference. I couldn't find anything that says you can't pay out of pocket for additional services.
Whatever at October 1, 2009 11:53 AM
I hope Americans don't get national health care.
Now I have the best of both worlds. I get all my necessary medical care free and if I want frills like plastic surgery or a tuck I just head south.
So i'm rooting for those 2000 lobbiests of the medical insurance companies and big pharma to keep on telling the Reps to keep voting nay. I don't know what it's costing them but it will be worth it by golly.
Dax
Dax at October 1, 2009 1:14 PM
As I understand it you can pay out of pocket while on medicare. But you can't get social security without medicare & vice versa. In other words -- you can't just buy a full health insurance plan still get SS.
Jim P. at October 1, 2009 3:27 PM
I think Democratic politicians (and many Republicans) know that they can't raise taxes enough to fund their Medicare/Medicaid promises, and want a way to hide their responsibility for the coming denial of services in Medicare, Medicaid, drug benefits, and social security.
The "solution" for Democratic politicians is to put everyone into one medical care pot. We then all get equal amounts of services at whatever high tax rate the government can levy. The young must be coerced into this system, to extract as much money as possible to serve the old.
Medical services will be meager under "health reform", with rationing and slow delivery for everyone. The government has promised $88.6 trillion in unfunded services ($88,600 billion, not a typo), including Medicare, Medicaid, Drug benefits, and Social Security. Politicians now find that just $1 trillion in increased cost during the next 10 years is politically unacceptable. That is the center of the healthcare debate. So, $88.6 trillion in services are not going to be delivered in the next 75 years, more than $1 trillion per year. This would also kill any progress in medical care, as we all stew in the rationed system that covers over the fraud of the mostly Democratic politicians.
The government has made promises that it can't keep, for the last 30 years, to the now-old. The now-old did not save enough for their own care or retirement, relying on the wishful-thinking or lies of the government. Without "reform", they will get care corresponding to the minimal amounts that they have saved or that can be raised with current taxation.
Healthcare "reform" by Democrats is really a scheme to raise more money from the younger and healthier population, then ration care for everyone so that people feel equally treated. To paraphrase an old Soviet saying: The government will pretend to pay, and doctors will pretend to treat.
Obamacare Bails Out Medicare
Andrew_M_Garland at October 1, 2009 4:46 PM
I don't know why there is any debate whatsoever about "rationing".
In the free market, when demand exceeds supply, the supply cost goes up until the demand and the supply match.
For any "free" service, the administrator must set other limits. This is "rationing" by its classic definition.
Note the word, "must". There is no way around this. Even governments, capable of funding Moon landings and atomic warfare, cannot produce medical care such that you can run to the doctor for everything and anything for "free".
Take this lesson: "free" also means "disposable". After all, it doesn't cost anything - it's "free". This will never change - a dollar earned is worth more to the holder than a dollar gifted.
This will instantly work. Yes, I'm repeating myself, because one of the handicaps of this idea is that it doesn't further the power of government agents.
Imagine that. Who do these people work for, after all?
Radwaste at October 1, 2009 5:19 PM
Radwaste, where in any of the current debate, are people talking about "free"? None of the proposals amount to a full-service nationalized "free" (i.e., funded solely through taxes) program. Even Medicare involves patients either paying some things out of pocket via their own money or supplemenatry insurance. You're arguing against something which is neither extant nor proposed in the U.S.
Whatever at October 1, 2009 6:01 PM
"In the United States the government currently rations indirectly by fixing prices so low that providers stop serving Medicare and Medicaid patients."
I've heard several single mothers (of course) lately say that they can't find a Dr that's taking new medicaid patients, and they really hope the government healthcare thing gets passed soon so they can get a Dr. Cause yeah, all those Drs passing on government patients now will be lining up to take the, then, right?
momof4 at October 1, 2009 8:00 PM
You can't possibly believe this. Obama, Frank, Woolsey, Pelosi, Daschle, etc. have ALL said that this is a necessary first step toward getting Americans to accept universal single payer.
Therefore it is PRECISELY what is being proposed. Clinton went for the whole shebang in one shot, and lost. Obama's going with the tried and true leftist technique of incrementalism.
To use another analogy, Clinton dropped the frog in already boiling water. Obama's turning the heat up slowly. The frog won't know what hit him. That's why we're trying to scoop the frog out of the pan NOW.
brian at October 1, 2009 8:57 PM
Brian, I've not seen all those figures you list make that claim, though I certainly wouldn't put something like that past Pelosi. Regardless, I think full-NHS-style nationalized healthcare is and will be a nonstarter in America. I can't see people here ever accepting a system without a robust private component. We're just not that egalitarian a people. In order for something to be acceptable, those with the means will need to be able to buy better stuff than those who lack them. Even if full single-payer is their goal, it's a pipe dream.
Whatever at October 2, 2009 8:29 AM
Hence the use of force.
To build a pipe dream, sometimes you have to use a pipe wrench.
brian at October 2, 2009 12:44 PM
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