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Moving the Health Care Goalposts

I was catching up on health care blogs last night and noticed a theme on the Left: they have changed their arguments and justifications for ObamaCare and RomneyCare in the past few months.

Jonathan Gruber now claims the point of RomneyCare was not to reduce cost, even though cost reduction was a big selling point for it and its ObamaCare progeny.

Ezra Klein praises the Cadillac Tax on high-value insurance plans for “falling particularly heavily on union plans and striking a serious (and, over time, larger and larger) blow against the employer-based health-care system.” As with Gruber’s statement, this is true but President Obama sold his plan as protecting employer-sponsored insurance against those of us who think individuals should control their health insurance like they do their car insurance, life insurance, and homeowners insurance.

This digression is now its own post

And it seems everyone on the Left has dropped the “Patient Protection” part of the bill title and call it simply the Affordable Care Act (ACA), again making it clear that their goal is to provide subsidies, ration care through government, take away patient choices, and not worry about patients: read you and me.

The good news is there is a new diagram to help you understand how ObamaCare will make your life simpler.

U.S. News Blows the Story Three Times

The latest issue of U.S. News and World Report focuses on health care, but the authors and editors miss some of important points.

A list of changes that will affect consumers missed two changes that could affect more than 10 million Americans. Beginning January 1, 2011, individuals will not be able use their health savings account (HSA) to purchase many over-the-counter medications unless they first get a certificate of medical necessity. If somebody makes a mistake and purchases something not on the allowed list or does not get the right paperwork, the penalty will double to 20 percent of the cost. These are significant costs that will hamper the one insurance product that has proven capable of improving care at lower cost, but U.S. News ignores them while highlighting expansions of coverage and government subsidies.

An article on hospitals seeking payment from patients highlights a reason for this: “Some $260 billion went to uncompensated medical care between 1999 and 2008.” That might sound like a lot of money, but is less than 4% hospital costs and less than 1% of total health care expenditures over the 10-year period.

A bigger problem facing hospitals, insurers, and patients alike is the attitude expressed in a sidebar. A woman faced a $418 facility fee in her $1,133 doctor bill. She fought it, but said, “Everybody’s attitude was: What do you have to worry about? You have insurance.”

What do we have to worry about with ObamaCare? It’s free and doesn’t raise taxes, right? Oh, wait, the administration said what about the mandate?

It’s Safer to be Uninsured than to be on Medicaid

New research shows that Medicaid recipients have a 13% increased risk for dying while in the hospital than the uninsured. Medicaid patients also have longer, more expensive hospitals stays.

Researchers studied outcomes for nearly 900,000 patients across the United States who underwent one of eight major surgical procedures. They found that patients covered by Medicaid incurred a 97% increased risk for dying while in the hospital, and uninsured patients had a 74% increase in risk compared with privately insured patients.

So why does federal health care law will put 500,000 more North Carolinians on Medicaid?

There’s still a public option, and it covers abortion

At the National Review health care blog, I try to follow a reference in the health care law to a provision of the law that isn’t there. The short of it is: if you don’t want to have a policy that covers abortion, it may be harder to find among the public options.

Oh yeah, there’s still a public option.

Congress May Fine Itself but not State Health Plans

We already knew that members of Congress and their staff might already be uninsured, except those staffers who wrote the health insurance law and exempted themselves from its requirements. We did not know, however, that if a Congressional employee applies for subsidies, it could trigger fines of $50 million a year for Congress.

This is all highly entertaining but slightly meaningless since the federal government would be paying itself with money it doesn’t have.

More important for North Carolina, counties, cities, and those who care about the Constitution is what requirements the health care law imposes on state and local governments to insure their employees. One question is whether the health care law “comandeers” other governments. There is also the question of whether the federal government can tax other governments, which in turn depends on whether the fines collected by the IRS are penalties or taxes.

Oh yeah, and there’s still some question what recourse the IRS has to make you pay.

Daren Bakst has already outlined the broader Constitutional problemswith the individual mandate – problems Attorney General Richard Cooper ignored.

Big CON costs you more

The problem with regulations is that they give more power to a few people and raise costs for the rest of us. Certificate of Need (CON) in North Carolina limits competition from new hospitals that could challenge existing players and reduce costs for insurers and patients. A federal investigation of hospital-insurer negotiations in Boston illustrates the problems with overly powerful hospitals and provider networks.

Our new health care law will all but ban physician-owned specialty hospitals and so limit further the market’s ability to restrain health care price inflation.

Bigger hospitals, bigger Medicare losses

Need another reason to focus on states instead of Washington for real health care reform? A new study by MedPAC argues hospitals can control their costs in response to demand. Hospitals with market power charge private insurers more, don’t worry about costs, and so lose money on Medicare patients, but maintain high profit margins.

Taking this claim to the next step, there are two ways to deal with market power. One is to establish a competing outside power, like a single payer or a government regulator, but that can lead to problems like collusion. The other is to open the market for and allow competitors to arise naturally. The federal government is trying to establish the former. States could eliminate certificates of need and allow for-profit hospitals to bring about competition among hospitals.

Regulators > suppliers

North Carolina’s infinitely wise and all-knowing medical facilities regulators have decided that Wake County, which includes  two of the state’s ten largest cities, has need for three more operating rooms this year. Four hospitals have plans to build a total of nine new operating rooms. But the state is confident that its certificate of need (CON) procedure will reduce costs by reducing proposed supply by one-third.

You don’t need dentists for dental care

Sarah Avery at the Raleigh News & Observer has a terrific story this morning on ideas from dentists and dental hygienists that could improve access to dental care throughout the state without creating a new government program or spending another tax dollar.

Dentist Steven Slott wants to create a sub-dentist “mid-level worker” and dental hygienist wants to create a “superhygienist,” but the idea in both cases is the same: somebody in the dental field who is trained to do more than clean teeth but less than root canals, like a nurse practitioner.

I hope we can build support for both ideas. Too many people in the state have little access to dental care. Dentists cannot afford to be everywhere. Dental hygienists are not allowed to work on their own. The state needs to ease the restrictions on practice and licensing.

This new model is not a threat to dentists, but an opportunity for those without access to care.

Re: COBRA’s bite

John,

Thanks for highlighting John Hood’s column this morning. When people who purchase insurance on their own become unemployed, they are three times as likely to remain insured than those who were insured through their employers, even with COBRA. But COBRA is expensive and entails a big jump in premiums, so just 19 percent of unemployed people had purchased coverage that way. Federal subsidies doubled the percentage of unemployed taking up the continuation of coverage benefit as they cut the cost to individuals by 65 percent. As noted, COBRA is a bad idea, with or without subsidies.

Recent research goes further still, and questions the value of group insurance. The authors find that benefits from individually-based insurance more than offset any cost savings from getting insurance in a group plan.

Individual policies provide more choice, more security, and cost less for the unemployed without raising cost to taxpayers. Why do Republicans and Democrats alike want to build on the current employer-based system?

cross posted at Locker Room