American Elephants


The VA Scandal Is Caused By the Perverse Incentives of Socialized Medicine. by The Elephant's Child

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Memorial Day just calls more attention to the scandal of the Veterans Administration hospital system. Democrats are in panic mode. This is a bad one. Nancy Pelosi is trying to blame it all on Bush, the usual fall-back position. She would have it that it is all the enormous influx of young veterans wounded in Bush’s wars. Nice try, but that’s not the case. It isn’t the young guys that are dying of inattention, despite their sometimes grievous wounds, they are younger and healthier. The problem is socialized medicine.

The reason Democrats are attracted to government-run health care is that the left is always focused on intent, not results. They believe in government by experts, the best and brightest, and ever more experts to get it right — in other words, in big government. Their intent is what matters. If the results aren’t right, they will fiddle and tweak until they get it fixed.  But they intend a bright and shining success.

When you guarantee beneficiaries free treatment which is open-ended in terms of cost, more patients are apt to seek treatment for less important reasons. They have no idea of the cost—they are guaranteed care. For the government, the patients are now their responsibility and the incentive is entirely to cut costs.

Doctors and nurses may well be wonderful, and choosing to work with veterans indicates a caring intent, when they could probably do as well or better in the private sector. But for the bureaucratic staff, the incentive is to force the medical staff to cover more patients in less time, to prescribe cheaper medicines, to do less costly procedures. Success at bringing down costs results in bigger bonuses and career advancement for the bureaucrats.Some are represented by unions. The incentives for unions are to gain bigger bonuses, better retirement, and better pay, not better care for vets.  Which results in long wait lists, hidden because they are embarrassing and certainly not resulting in career advancement— or exactly what we’ve got.

Democrats don’t really understand what all the fuss is about, because they are focused on their intent. The results can be tweaked to prevent such problems.

You can see  the intent of ObamaCare being tweaked daily by the president, as he issues executive orders and rewrites the law to overcome problems. But we have had added the United States Preventative Services Task Force (USPSTF) which issues decisions on what preventative services will and will not be covered and for whom they are indicated. Got that? You don’t get to decide, it will be decided for you by a new agency filled with unaccountable bureaucrats.

The Independent Payment Advisory Board (IPAB) is tasked with cutting Medicare costs either through a reduction of services or by cutting the payments to providers. They simply don’t understand that they cannot cut payments to providers below a certain point or there will be few or only poorly qualified providers.

Whether with Medicare, Veterans Care or Medicaid, Obama and his advisers were particularly concerned with the higher costs of health care for older people. Statistically, the biggest expenses for health care are in their final years. If you can cut back on those expenses, and old people have fewer worthwhile life years ahead of them, then you are more apt to meet your budget.

And again, whenever care is free at the point of service, the more care people will demand. I wrote this in an earlier post, but this is what Obama said:

Obama did say that people might be better off taking a pain pill than getting surgery. He also said “the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out there.” Excuse me, but isn’t that what health care is for?

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Milton Friedman on Socialized Medicine by The Elephant's Child

I love Milton Friedman’s clear explanations of simple economic principles. Do any of those on the Left ever watch any of these? Silly question, of course they don’t. Could we get all of these videos into the schools?  Never mind, I’m fantasizing.

 



Free-Market Medicine v. ObamaCare by The Elephant's Child

We recently demonstrated how free-market medicine works with a post about the Surgery Center of Oklahoma, which is a shining example. ObamaCare, on the other hand, is the left’s attempt to gradually funnel us all into single-payer, government-run health care.

Please note that ObamaCare is not about health, nor is it about medicine. It is about insurance and who pays for what. They tell us that ObamaCare will reduce costs and promise you all sorts of free goodies. Obama partly won the election by promising free contraceptives. (Well, of course they are not free because the rest of us will have to pay for them. I should clarify that: the young women who are getting “free” contraceptives will be paying for the “free contraceptives” of all the women in the country who are using contraceptives. Probably paying more than the $9.00 a month’s supply costs at a discount pharmacy. But I guess that’s how you learn about basic economics.

ObamaCare: think of it this way — draw two stick figures with a space between. Label one ‘patient‘ and the other ‘doctor.’ Between the two stick figures, draw a small box. Label that ‘insurance companies‘. Then above the small box, draw a much bigger box. Label that one, oh, just ‘government’ to represent the over 100 agencies and offices and euphemistically named bureaus that will supervise and control the patients and the doctors, the insurance companies, the pharmacies, the suppliers, the hospitals. All those agencies have who-knows-how-many employees who all have salaries which are excessive, except by DC standards. That little exercise alone should tell you that ObamaCare is going to cost a lot more. Yet ObamaCare is all supposedly about how much it will save you. (Not really, it is really about making you dependent on liberal government, so you will always vote for liberals.)

So, while free-market medicine is about competition and creativity, innovation and plain old American free enterprise, ObamaCare is about folding you into the arms of bureaucracy, where you will forever be dependent on government, until they decide that it costs too much.  Medicine becomes not a matter of the care a doctor gives to a patient, but for the physicians, it becomes a matter of trying to get paid enough to cover costs. For hospitals and suppliers, it becomes a matter of trying to cut costs to comply with government budgets.  The British NHS provides a running example of what we will become in time. To wit:

A BID to save nearly £3billion by slashing appointments with a doctor and treating patients via computer will put lives at risk, ministers were warned.

Health Secretary Jeremy Hunt is planning a technological revolution that could spell the end of the traditional doctor’s surgery.

A new system of “virtual clinics” is being planned in which GPs connect with patients via iPads and Skype, an idea that NHS bosses are importing from India.

The reforms would save £2.9 billion “almost immediately” and improve the lives of most patients, for example by avoiding the need to find child care during appointments, Health Minister Dr Dan Poulter said last week.

However, critics are concerned the initiative would create a two-tier NHS in which the less technologically able, particularly the elderly, would be left behind….

The ideas, contained in a Health Department report called Digital First, include arming community nurses with iPads in rural areas and making more use of Skype video calling between GPs and patients. There will be more online assessments “augmented” with video calls.

Mobile phone “apps” will be used to access lab reports and health records and negative test results will be sent by text messages rather than delivered in person. Mr Hunt, who made a fortune by creating an internet company, believes that while mobile broadband technology is revolutionising most walks of life, there is a problem once ­people encounter the relatively antiquated systems of the NHS.

The Government is trying to fill a £20 billion NHS funding gap and health chiefs want to reduce “needless” appointments that clog up staff time.

Well, the NHS has kept patients parked in ambulances outside hospitals because they can have only a specified number of admissions a day, they’ve conveniently offed seniors in their final years with ‘”do not resuscitate ” notes on the charts, cut back on cleaning and linen changing and drinking water and food. The battle has become — how to cut costs, not patient care and saving lives.

The innovation and inventiveness that produce savings are eliminated by the overweening bloated weight of bureaucracy, once established, is always seeking more power and more control, and attempting to reduce the costs that they themselves created with their processes.



The Dependency Agenda by The Elephant's Child

Wise Words from Thomas Sowell: by The Elephant's Child

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ObamaCare Comes Before the Court Next Week. by The Elephant's Child

ObamaCare will be argued next week in the Supreme Court. The justices will be considering the application of the health care law in the light of the United States Constitution. While the justices consider the constitutionality of the law, most of the arguments have to do with the economics of the law.

We were lied to in the first place, directly and purposefully. It was necessary for Democrats to drum up nationalized health care in the back rooms of Congress, because the costs of health care were spiraling out of control, and the only solution was socialized medicine the Affordable Care Act and Patient Protection something or other.  That was not true. Medical costs had been moving downwards towards the normal rate of inflation for a decade. There was NO emergency.

Consider the individual mandate to purchase health insurance. The Obama administration defends the mandate on the ground that a person’s decision to not buy health insurance affects commerce by materially increasing the costs of others’ health insurance. The government adds that health care is unique and therefore can be regulated constitutionally in ways other markets cannot.

The government’s other defense is that the health-care market does not exhibit textbook competition. No market does. The economic features relied upon by the government…are characteristic of many  markets.

Health care, Douglas Holtz-Eakin, and Vernon L. Smith point out, is typically consumed locally, and health-insurance markets themselves primarily operate within the states.

The administration’s attempt to fashion a singular, universal solution is not necessary to deal with the variegated issues arising in these markets. States have taken the lead in pas reform efforts.  They should be an integral part of improving the functioning of health-care and health-insurance markets.

Mr. Holtz-Eakin is a former director of the Congressional Budget Office, and president of the American Action Forum. Mr. Smith is a professor of economics at Chapman University and the 2002 Noble Laureate in Economics.

Professor Richard Epstein argues that the health law’s expansion of Medicaid is problematical. An expenditure of federal funds is unconstitutional when it coerces states rather than encouraging them to participate in a federal policy. ObamaCare transforms Medicaid from a health-care program for the poor into a mandatory federal entitlement— obligatory on both the states and the beneficiaries alike.

What the Supreme Court will do is completely unknown. Speculation does not help. Kind thoughts, prayer, voodoo dolls and worrying probably won’t help either, but  you might try your favorite remedy anyway.



Political Rationing of Care for the Elderly—A Good Idea? by The Elephant's Child

Paul Ryan’s “Pathway to Prosperity” shows a way to bring our nation’s deficit and debt under control in a reasonable time frame. Democrats object strenuously.  They are not prepared to cut back much on spending, and they would prefer to raise taxes sharply on “the rich” and cut spending on the military.  To no one’s surprise, they have declared class warfare, and are busily demonizing “the rich” and pretending that raising taxes on the rich will solve everything. Unfortunately the rich don’t have enough money—even if you strip them of everything they have— it’s not enough.

Obama also demonized the Ryan plan’s approach to Medicare.  Obama extolled his own plan for reducing the costs of Medicare.  He briefly pointed to the Independent Payment Advisory Board (IPAB) as a way to control costs.  Remember that acronym —IPAB.

This is a panel of ‘experts’ to be appointed by the president who will control prices, decide what services can be offered and who can have them.  ObamaCare has, from the first, been focused on the fact that the greatest medical expense comes from seniors in their final years, and controlling costs has to deal with that fact.

That doesn’t sound too bad, until you realize that it means rationing, denying service, and cutting back on payments to doctors, hospitals and medical services. The experts cannot by law decide what treatment you can have, but they can decide what they will pay for it. They are charged with bringing costs below the costs of Medicaid. Socialist medicine is uninterested in the individual and excuses that lack of concern by referring to the greater good for the greater numbers.  Does this all sound a little familiar? Of course, it’s the death panels!  Fifteen bureaucrats get to decide who lives and who dies.  You don’t get to question or argue. Their decisions are final, and you can’t get them fired.

Under ObamaCare, IPAB is to hit a target for Medicare’s growth that significantly squeezes the costs of the program beginning in 2014.  (In his budget speech, Obama said he wants to ratchet down the cap even further)  Congress has very limited options.  It can pass the IPAB recommendations, substitute its own version of them, or by a three-fifth’s majority in the Senate vote to waive the requirements.  If Congress does none of these things, the Secretary of HHS automatically implements the IPAB plan.

Congress is difficult.  Members argue, they disagree.  Everything would work so much more smoothly if their key functions were handed off to a panel of experts.  If you are deeply impressed with the Obama cabinet and Obama’s appointments, then you might be impressed with his ‘experts.’ I’d rather take a chance on me and my doctor.  I don’t believe in ‘experts.”

No one can predict the future, but the Obama administration is so interested in cutting back on payments to doctors and hospitals — and the bills for major life events can be huge — yet they seem not to have considered the consequences on the medical profession. Current Medicaid patients often cannot find doctors who will see them. The IPAB is supposed to reduce Medicare cost below Medicaid cost.

We have a current shortage of primary care physicians.  If they cannot receive a fair recompense for their effort, if the government keeps ratcheting up the number of patients they must see in an hour, will there be a flood of new students wanting to become doctors? How long would it be before ObamaCare nationalized the doctors?

All of the bright ideas that Obama and the Democrats have had about government controlled health care— and they have admitted that their goal is single-payer health care—has been tried and failed in England, Europe, Canada.  Theodore Dalrymple (the pen name of Anthony Daniels, a British physician) wrote a couple of weeks ago in the Wall Street Journal that Obama’s claims for vast new efficiencies in health care would not produce the savings claimed —the British had been there and done that, and it doesn’t work. The incentives are all wrong. The world is more complex than health-care economists assume.

Remember the acronym—IPAB, Independent Pay Advisory Board.  You really don’t want the president’s, any president’s, bureaucratic appointees deciding, by looking at the cost,  what medicine you can have, what help you can have when you are ill or if you can have any at all and are just too old or too much of a drag on the system, and have to be unplugged from life support, however many productive years you might have left.

A fairly important reason to repeal ObamaCare — it just might be the death of you.




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