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Sunday, June 21, 2009

Lower Medical Costs Is Code for Rationing

Have you noticed that Democrats are cutting deals everywhere to cut medical costs? Just the other day, Senator Max Baucus (D Montana) said he had reached an agreement with drug companies to cut costs for prescriptions by $80 billion over the next ten years.

Giving a boost to health legislation after a bruising week, the pharmaceutical industry struck a deal Saturday with Senate Finance Chairman Max Baucus (D-Mont.) and the White House to commit $80 billion over 10 years to help pay for comprehensive reform.

The promised savings from the industry will be written into the reform bill, making them binding. Capping months of private talks, Baucus announced the deal in a Saturday afternoon press release that drug companies agreed to narrow the so-called doughnut hole in the Medicare Part D prescription drug plan.

“The Medicare prescription drug benefit we created helped address the problem of skyrocketing prescription drug prices for millions of seniors. Today, we helped fill the gap in coverage and finished the job,” Baucus said in a statement. “This new coverage means affordable prices on prescription drugs when Medicare benefits don’t cover the cost of prescriptions.”

Earlier in the month, the administration was able to get similar concessions out of health care providers.

Health-care providers plan to help cut up to $1.7 trillion of costs over the next decade by improving care for chronic diseases, streamlining administrative tasks and reducing unnecessary care, major industry groups said Monday.

Their proposals offer the first detailed glimpse into how hospitals, doctors, pharmaceutical companies, health insurers, medical-device makers and a big labor union aim to make good on the cost-cutting promise they made to President Barack Obama last month. The savings are key to helping fund the Obama administration's plan to overhaul the nation's health system.

Under the groups' proposals, certain types of care could see cutbacks, potentially sparking concerns among consumers. For example, the American Medical Association, which represents doctors, is proposing to curb what it deems "overuse" in areas including Caesarean sections, back-pain management, antibiotic prescriptions for sinusitis and diagnostic imaging tests.

A couple weeks ago, the president pronounced that there would be cuts in both Medicare and Medicaid to help pay for health care reform.

President Barack Obama said Wednesday he wants at least $200 billion cut from Medicare and Medicaid spending over the next decade to help pay for overhauling the nation's health care system and providing coverage to 50 million uninsured Americans.

The reductions in the programs would come on top of the $300 billion in cuts already proposed in his budget.

In a letter to senators Wednesday, Obama also said that if Congress ends up requiring individuals to purchase health insurance, people who can't afford it and small businesses should be exempt. He also strongly reiterated his support for a new public health insurance plan to compete against private insurers.

The president and his allies are using some misdirection and nice sounding words to deflect from reality. Does anyone really believe that the drug companies will give up profits? How will we pay for all these cuts in medical care?

There is only one way to cut medical costs without increasing the number of doctors, nurses, and drugs. That's through rationing. Here's how Dick Morris explained all of this.

These decisions will not be medical but financial. They will not be based on a doctor’s opinion of what his or her patient needs, but a bureaucrat’s and an accountant s opinion of what the new health care system can afford.

And you will not be able to bypass their rulings and pay for this care yourself. The rules laid down must be followed and private payments will not be permitted to override them. What we now call a private fee for service will metastasize into a bribe.

But this is just the very beginning of rationing. The total of health care spending now runs about $2.3 trillion a year in the United States. Over ten years, that’s likely to reach $30 trillion. So a cut of $1.7 trillion is a mere drop in the bucket.

More rationing is coming, and coming soon.

It's all very simple. More people will receive health care services. Yet, we'll have the same number of doctors, nurses, and drug providers. So, we have one of two options. The first option is for medical costs to grow to be even greater. The other option is to make sure that each person receives less care. Because increasing costs is not an option in this environment, the president must choose the second option. Because rationing is not a word that will win any popularity contests, he calls it "cutting costs". Don't be fooled. The president is ready to ration care and if his health care reform platform passes that's exactly what will happen.


kalani said...

In Korea, they are already making preparations for medical tourism.

Up to now, only Korean-Americans have returned to Korea to get their surgery -- especially cosmetic surgery -- done. I've seen Korean-American folks in the hospitals for hip/knee replacement surgery and some other complicated surgical procedures. REASON??? IT IS MUCH CHEAPER HERE.

As an American, I'm also under the Korean Health plan because my wife is Korean. I've had heart surgery (rotor-router of the arteries) for a $1000 out of pocket including medications and hospital room (semi-private).

In the future, the Koreans are planning on expanding their coverage for "medical tourism" which promises to explode IF AND WHEN Obams's plans to socialize America's medicine occurs.

Anonymous said...

All that proves is that fee-for-service is cheaper in countries where everything is cheaper. Have you seen how far into the toilet the Korean Won went last summer?

kalani said...

Just by coincidence, the Korea Herald had an article on the increase of foreigners in Korean hospitals -- UP from 2008.

The cheaper rates is the factor but you need to look at your medical malpractice insurance that you demand in the US. Look at the gun you put to the doctor's head first before you blame it on the won depreciation. Look at why your costs are skyrocketing instead.