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Time for an American Health Care solution

Empower Patients — Not Government and Insurance Companies.

David McKalip, M.D.
Campaign For Liberty
Sunday, January 24th, 2010

The dust is settling on the rejection of President Obama’s government and corporate takeover of American Medical care. But lovers of liberty must remain vigilant for attempts to compromise that will actually create the same problems for Americans. Obamacare was always about one thing only: control of medical care and medical spending by parties outside of the patient-physician relationship. Sadly, there are many in the Republican party who support the same thing: control by third parties. They will be now be tempted to pursue these “cost control” measures — to satisfy their own special interests and to appear to offer “solutions” for political reasons. They will be making a mistake and the American people must reject compromises of principle for political expediency.

Obamacare’s core elements fell into two broad categories: 1) covering the “uninsured” and 2) controlling medical costs. “Universal coverage” has been a holy grail of Statists for decades and this version was an adoption of the failing Massachusetts model: a mandate to purchase insurance for every American. That was coupled with increased enrollment in Medicaid and wealth transfer to 60% of Americans to subsidize purchase of insurance. While private corporations would hold the money, the state would set the terms of health care financing and what would be “covered”. Thus there is practically no difference between a single payer system and the corporatist model of health care financing.

The second key element is alive and well: cost control. Massachusetts policy-making elitists lament that they expanded coverage in 2006 without controlling costs. They now face budget shortfalls and upheaval as hospitals sue the state to recover losses in the new system, patients wait longer to see doctors and the state begins to create and implement rationing. It is the rationing model that is likely to remain and be supported by many Republicans. In fact, it was under the Bush administration that talk of this became prominent, with terms like “quality and efficiency”, “pay for performance” and “value-based purchasing” and “transparency”. These strategies must be just as soundly rejected by the American people now as they have always been part of the Obamacare proposals and have no redeeming value. In fact the data is clear that not only do they not improve quality, they usually harm patients and control costs only through committee controlled rationing — also hurting patients.

Under these “value-based purchasing” models, doctors will be put on a budget. They will have to be paid by so called “accountable care organizations” which can be described only as HMO’s on steroids. All service payments (for medical tests, hospital care, nursing home care and physician fees) will be “bundled” together and doctors will have to fight for their “fair share”. The doctor will be “rewarded” for spending less of the budget by receiving financial bonuses (incentives). In other words, they will be paid more, get more patient referrals and have a better public profile if they spend less money on the patient (essentially serving as rationing agents). That means ordering fewer tests, procedures, medication, hospital stays and all the other things people expect to receive from their health insurance premium. This “pay for performance” model can better be described as a “penalties for physicians”. When doctors are punished for spending “too much” corporate and government money on the patient, the patient will not be able to trust the doctor. This will end the concept of the patient-physician relationship: the hallmark of American medicine for decades that has lead to the best medical care ever seen in the history of man.

So how can we control costs and increase access to care? It is true that health insurance premiums are too high. Medical services seem to cost more than is reasonable (e.g. $80 Tylenol in the hospital). Medicaid patients must drive hours to find a specialist — if they are lucky. Medicaid patients (even though they are “covered”) are still twice as likely to go to the ER than those with private insurance since they can’t find doctors who can afford to pay to take care of them. Worse still, many people go without medical care. All of these problems can be solved if we reject the very structure that has gotten us to this point so far: control of every health care dollar by third parties, especially for routine annual medical care. When insurance companies and government hold the money, patients come to feel entitled to receive every dime’s worth of care they can possibly get to make sure they get their “fair share”. They don’t ask about cost or even necessity. They don’t ask if they really need an MRI or a 5th medication or a spinal surgery with titanium implants. However, when consumers hold the money for routine, annual medical care (coupled with a 100% coverage catastrophic medical insurance plan) they begin to ask questions and shop for best price. They demand (and deserve) more time with their doctors. Since 2003, this model of health savings accounts and high deductible health insurance has been shown to drive down costs as patients make sure they are getting the most for their health care dollar. Patients with this means of paying for their health care are more likely to get preventative medical care, engage in healthy behaviors, ask questions about medical necessity and basically hold their doctors and hospitals accountable.

In other words, it is by application of free market principles that we can drive down health costs, increase access and increase quality. Just as market forces keep down costs and allow innovation and growth of new features for computers, cars, dental care, plastic surgery, and laser eye surgery (the later medical services are not covered by insurance). But many will ask: what about the poor? The poor are always better served when the market drives down costs for all as they can then find more affordable services. In addition, it is easier for government assistance and the charity dollar to go further when prices have been held down by the market. Of course, there will always be a role for the government — but it must be targeted only at the poor. But more importantly, when there is a vibrant and prosperous health care sector operating in a free market, it will be easier to provide the best form of assistance to the poor: charity. Charitable organizations once had a prominent place in American health care and many great hospitals started in this way. It is time to rebuild charity as a means to provide medical care for the poor while helping them achieve financial independence in a greater free market economy based in liberty.

Likewise, it is time to begin a 10 year transition of Medicare from a government run system to a system where people own their own health savings that will be used in their later years. It is clear that Medicare can’t last and has failed as much as other Great Society experiments like welfare, public housing, and food stamps. The proof of Medicare’s failure is in its $35 trillion unfunded debt, the coming rationing and the assault on independent doctors that will occur no matter what happens this year. Doctors will leave the system as Medicare will be no better than Medicaid. It is also essential to restore the right of Americans to keep their Medicare benefits if they choose to see a doctor who has left the Medicare system. They should also keep their Medicare benefits if they want to enter into a private agreement with a doctor to pay a rate in addition to the Medicare benefits agreed to by both parties. Congress removed the right to privately contract from Medicare recipients in the late ‘80’s and has created a government Medicare rationing cage that neither doctor nor patient can escape. Creating an ownership right to the Medicare dollars that were essentially stolen from decades of workers’ paychecks would be the best way to serve current Medicare patients while transforming the program for future generations.

It is essential for Americans and lovers of liberty to reject any fake Republican compromises that will impose more government and insurance cost control strategies. Pay for performance, value-based purchasing, accountable care organizations, bundling and “efficiency” are the exact same central economic planning tools that those in power would love to wield. Central economic planning failed the Soviet Union, is failing Europe and only succeeds in China due to their willingness to deny liberty and property rights to their citizens. Central economic planning enriches the arrogant power-holding elite, denies liberty, demands higher taxes and relies on a fiat currency that ruins economies as it loses value. We need an American solution for health system reform, and that means a free market solution of patient economic empowerment, a resurgence of charitable care and a small but strong government safety net.

View the original article at Campaign For Liberty

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