Wednesday, September 23, 2009

The "R" Word

Not "death panels" per se, but definitely: The "R" Word | John Goodman | NCPA

There are many contentious issues, of course. But towering above all others, THE ISSUE is denying people care. Or, if you like, health care rationing.

At the National Center for Policy Analysis we have brought this issue up frequently – but, I believe, in a responsible way. For that matter, Barack Obama has brought the issue up frequently – also in a responsible way.

Yet what is driving the defenders of Obama Care crazy is that this issue is being discussed at all. For one thing, the President is saying things most Democrats never say when they talk about health care. For another, the opponents have passed up not a single opportunity to distort and exaggerate to the hilt. To get one absurd statement out of the way, let's admit that none of the bills before Congress contain the words "death panel."

Still, is there something here we should be worried about? Answer: Yes. You should be very worried.
How rationing will be done under Obama Care. As I explained in a recent National Review editorial, rationing Obama-style will be done indirectly. It will be the result of administrative decisions – all ostensibly made for the best of reasons: to eliminate futile and unnecessary care. Here's how it will work:

Under Medicare, the Administration is seeking the authority to make decisions on reimbursing providers through an independent commission. The federal government will use the power of the purse to force doctors to change the way they practice medicine. There will be fewer CAT scans, fewer MRI scans, fewer blood tests and fewer operations for the simple reason that Medicare will quit paying for procedures it considers questionable.

But how do we know that the scan or the test not ordered isn't in reality life-saving? We don't. In the very act of trying to change how doctors practice medicine from the payer side of the market, we run the real risk that quality of care will be sacrificed. And remember: the rule makers in Washington – far away from practicing doctors and real patients – will be under constant pressure to keep spending down.

Medicaid (for the poor) could be pressured in the same way as Medicare (for the elderly and disabled). But what about private health plans?

Under Obama Care, everyone who does not get health care from an employer will be required to obtain it in a health insurance exchange. The plans will be free to set their own premiums, but they will have to charge all enrollees the same price – regardless of health status. Because some plans will attract a greater percentage of sick enrollees than others, a government administrator will have the power to "tax" plans with healthier enrollees in order to subsidize plans with sicker enrollees in a process called "risk adjustment." And it is precisely through such adjustments that the government will have enormous power to influence what is done for the sick.

For example, suppose a plan attracts an above-average number of people whose doctors say they need hip replacements and ask the government risk adjustor for an extra payment to cover the cost. The risk adjustor may decide these hip replacements constitute "unnecessary care" or "futile care" and deny the request. In this way, the risk adjustor will have the power to indirectly force health plans to deny people care.

The government risk adjustor will be aided in this effort by a national health board which will be doing "comparative effectiveness" analyses. If the health board decides that a certain type of hip replacement in certain circumstances is "unnecessary" or "futile," this will be prima facie cover for the risk adjustor to deny payments and for the health plan to deny care.

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