Wednesday, March 17, 2010

Welcome to the Future

Two telling stories in today's Boston Globe. The first is this much-ballyhooed statement by Democrat-turned-independent State Treasurer (and gubernatorial candidate) Timothy P. Cahill:
"If President Obama and the Democrats repeat the mistake of the health insurance reform here in Massachusetts on a national level, they will threaten to wipe out the American economy within four years."
He's urging the president and Congressional leaders to "come up with a new plan that does not threaten to bankrupt this country." These are strong words from Cahill, not exactly a right-wing hack.

Perhaps Cahill's fears are reinforced by another article in the Globe, one that hasn't gotten as much play. This story shows what "health-care reform" in Massachusetts has wrought: skyrocketing costs in an already expensive medical system with the prospect of rationing to come. Here are a few snapshots of what could be upcoming for the nation as a whole (emphasis added):

Moore has filed a bill proposing to cap payments to hospitals and doctors at 110 percent of what the federal Medicare program pays for medical care. But, he said yesterday, insurers and the state could save money even with a higher cap.

Governor Deval Patrick filed a measure last month that would give state officials power to review and reject rates set by hospitals, physician groups, medical imaging centers, and insurers....

Last year, a state commission proposed radical changes to the way providers are paid, with the goal of slowing the rise in the use of medical services. It urged scrapping the current fee-for-service system and paying providers a per-patient annual fee, called a global payment, to cover all of a patient’s medical care.

The state secretary of Health and Human Services, Dr. JudyAnn Bigby, and other Patrick administration officials have completed a detailed plan for adopting global payments and are expected to brief legislators on it by next week, Moore said.

But given that global payments could take five years or more to implement, he said “a quick fix’’ is need ed “to stop the bleeding,’’ particularly for owners of small businesses, who are struggling to pay soaring health insurance premiums. He said provider rate limits could slow the growth in health care costs more quickly and are a likely component of any Senate measure.

Government bureaucrats setting prices? Check. Capping payments to doctors? Check. Centralized complex mechanisms? Check. Rationing? Check. What's not to love!?

Placing limits on what doctors can spend per patient would necessarily limit the care options for each patient. This is a kind of backdoor rationing with a one-size-fits-all flavor. Part of the "progressive" dream of making care more "efficient" perhaps hinges upon this limitation in medical care. Despite the smoke and mirrors of partisan rhetoric, there are significant costs of so-called "universal health-care."

It is very likely that many of the excessive costs of our current health-care system are due to the structural inefficiencies of a few centralized providers. The Massachusetts health-care experiment and Democratic leadership in Congress seem to be doubling down on the hopes of centralization. So far, how is that bet working out?

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