Why ObamaCare Will Drive Up Costs

Here is an excellent article on why Medicare (and ObamaCare, which is designed just like it) only drives up the costs of medical services

The government price controls in America’s healthcare system always push prices up. Here’s why.

The Wall Street Journal reports that Medicare pays too much for specialist services and too little for primary care—even though doctors themselves decide how the money should be divvied up. That drives up the cost of the program and intensifies the shortage of primary-care doctors needed to care for the 32 million people who will get health coverage over the next few years.

This is neither surprising nor new, at least to me. I oversaw the study that created Medicare’s physician payment mechanism during the 1980s; I oversaw the implementation of that mechanism during the early 1990s; I am currently an appointed member of a state commission that sets prices for hospitals—and for those 25 years, I have been arguing that price controls are the wrong way to go.

Faulty Premise, Faulty Prices
Medicare’s physician payment system was developed by Harvard professor William Hsiao and put into place in 1992. The Resource-Based Relative Value System (RBRVS) is founded on the simple, but incorrect, view that higher payments are justified for services that require greater inputs—ignoring the consumer side of the market.

The problem for a government price controller is that he can never know when the price structure is ‘right.’ The bias is always to raise prices, not lower them. The RBRVS makes sense, superficially. It pays more for services that require more physician work or that involve higher costs to maintain a practice. Compared with routine primary care, heart surgery is more physically demanding, with long hours in the operating room, more stressful since the patient’s life may depend on how well the surgeon does his job, and requires more advanced training. Heart surgeons also have higher practice costs, including more expensive medical liability coverage. Five minutes of a heart surgeon’s time requires greater resource use than five minutes with a pediatrician, and in a properly functioning market the surgeon would receive greater compensation.

Read the whole thing.

Berwick's Recess Appointment: What Does It Mean?

Earlier this week,  Mr. Obama used his executive power to appoint Donald Berwick, MD, to the office of administrator of the Centers for Medicare and Medicaid Services.  This is an important office as it oversees several hundred billion dollars in federal funding for Medicare and Medicaid for seniors and others who don't have recourse for health care.

What makes this appointment so controversial isn't that Dr. Berwick wouldn't have passed through the Senate confirmation process, he would have.  It's that it avoids any possible questioning of this man on his opinions and views on how the Medicair/Medicaid funds should be disbursed.

Dr. Berwick is an outspoken admirer of the British and Canadian health care systems.  He would like to see the same system put in place here in the US.  Additionally, he has publicly stated that rationing would be necessary to make ObamaCare work...

Berwick made to an interviewer last year: "The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open. And right now, we are doing it blindly."

...something that White House certainly doesn't want anywhere near the airwaves as the November elections draw ever nearer.  What is being used as justification is an absent threat of filibuster,

"Many Republicans have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points," White House Communications Director Dan Pfeiffer said in a blog posting.

This is the justification used for the appointment, which is being used for the first time in on a non-controversial appointee.  No one on either side of the Political spectrum has stated that Dr. Berwick isn't qualified, he is.  Nor has anyone Senator from the GOP said that they would filibuster his appointment.    But, there is serious constitutional concerns on the part of Senate Democrats. 

Sen. Max Baucus, (D-Montana), the chairman of the Finance Committee which would have considered the Berwick nomination, said he was troubled by the recess action. "Senate confirmation of presidential appointees is an essential process prescribed by the Constitution that serves as a check on executive power ... by ensuring that crucial questions are asked of the nominee, and answered," the Democrat said.

But what Mr. Obama has done is to tacitly admit that the nation is now firmly opposed to his centre piece legislation, ObamaCare, and that it is now much more likely that it will be repealed prior to it's full enactment in 2014.  This is the conclusion drawn by John Podhoretz in a column in the NY Post. 

Second, this is as glaring an admission as there is that Obama and his people know they've lost the public on health care. Rather than using these hearings to bolster popular support for the landmark legislation they rammed through in the spring, they can't bear to submit to public questioning about it.


By running away from this fight, Obama is signaling that the possibility of repealing the health-care monstrosity before it really begins to sink its teeth into the American system by 2014 is very real indeed.

 This is a very real possibility that grows more and more possible with each passing day.

federal government to take over all of health care

On MSNBC, Rep Anthony Weiner (D-NY), a supporter of Mr. Obama's health care plans, finally state's the ultimate goal of "health care reform." Ed Morrissy of Hotair.com has the link to the interview by Joe Scarborough on Morning Cup of Joe.

During the interview, Weiner actually states several times the goal is to eliminate private health care. When you tie this into the fact that the creation of Center for Health Outcomes Research and Evaluation, the board that will decide whether or not you deserve health care once you reach a certain age, or if you have a terminal illness (this board was created under the "stimulus" bill signed into law last spring).

(copy & paste this http://jewishworldreview.com/cols/hentoff081909.php3)

This admission, along with what Rep Barney Frank (D MA) said last spring, is a naked attempt of the government to directly control 15% of the economy. I'm not wholey certain that this is constitutional. Under the 10th Amendment, I have come to the conclusion that this is something that should be reserved to the states, as in TennCare (Tennessee), and MassCare (Massachussetts), both of which are in severe financial straights. Neither of which actually reduce costs. In fact, In Mass, costs have risen almost exponentially.

This is what we have to look forward to, higher costs, immense deficits without end, and eventually bankruptcy as a nation. The alternatives are tax rates above 50% of gross income, something which will wipe out our way of life. Now is the time to put a stop to the madness and get some fiscal responsibility out of Washington.