Obamacare Will Amputate California Dream

FEB. 28, 2012

by WAYNE LUSVARDI

Rationing health care under Obamacare will end up politicizing and bankrupting the medical financing system, just as Medicare does.  And there will be middle-class resistance to Obamacare when it is realized that this will end the American Dream of leaving your wealth and home to your heirs.

Last week President Barack Obama signed HR 3630 to postpone nearly 30 percent cuts to Medicare physician reimbursements.  This bill, delaying budget cuts in Medicare was part of a larger package of measures that included an extension of the payroll tax cut and continued unemployment benefits.

The part of the legislation delaying cuts to fees doctors can charge under Medi-Cal is called a “doc fix.” This is because it “fixes” the problem by delaying cuts in doctors fees for another 10 months.

It should have been called a “patient fix,” because if doctors’ fees were cut about 30 percent, they might have dumped their patients covered by Medi-Cal. This would result in an even larger overload of patients that depend on hospital emergency care.

A two-tiered medical service system would result in low income persons assigned to county hospitals and the middle class and wealthy able to access private physicians. What politician in his right mind would want that coming home to roost in an election year?  It is bad enough Obama made the Catholics mad.

The legislation postpones a 27.4 percent reduction in fees originally set to begin on March 1, 2012.  The cost of the “doc fix” will be $18 billion nationally. This is just to extend the current rate of reimbursement for doctors for 10 more months.  This is to be funded by various cuts in other health-related cuts spread out over a decade:

The measure will fund:

* $18 billion in Medicare costs through 2012.

The measure will cut:

* $5 billion from the prevention and public health fund created by the federal health reform law;

* About $4.1 billion in Medicaid payments to hospitals with a disproportionate number of uninsured patients;

* Payment rates for clinical laboratory services, by 2 percent in 2013, to save an estimated $2.7 billion over a decade;

* $6.9 billion in “bad debt” payments to hospitals when Medicare beneficiaries do not pay for services; and

* $2.5 billion in Medicaid funding to Louisiana, which received increased funding from the overhaul.

Doctors will face about a 32 percent reduction in Medicare payments when the “doc fix” expires. This assumes it is more politically expedient to stick it to them then and not kick the can further down the road.

Obamacare Sees ‘Markets’ as the Problem

Many health care policy experts see the ability of private-sector model of health care and Big Pharma — large drug companies — as the primary cause of why the federal budget is running uncontrollable deficits. A long-term solution would cost $300 billion.

They believe that many treatments and drugs are ineffective, such as:

* stents for blocked arteries that can be prevented by forcing everyone to shift to a plant-based diet;

* “palliative” chemotherapy that only relieves symptoms of incurable cancers;

* removal of cataracts from eyes in the elderly;

* health care rendered in the last two years of life.

The problem to these experts is “capitalism”: too many entrepreneurial doctors making lucrative compensation with exotic treatments that often don’t work, causing Medicare to go broke. The only solution they see is punishing doctors and rationing health care services.

A problem with the Obamcare solutino is that the health care system will end up politicized and broke, just as Medicare is now. The adult children of elderly medical patients will vote for whatever politician or political party promises to provide medical services “on demand” to their elderly parents.

This would continue to protect the inheritances of the children of the elderly. To leave your children your wealth is considered to be part of the American Dream. So any health care rationing system would just end up in the same place, as Medicare is today — running huge unsustainable deficits.

Back to the Pre-WWII Future?

Says Charles B. Warren, an economic policy analyst in Pleasant Hill, California:

“I guess the important question is, ‘What are the last couple years of life worth to you?’ Anything spent 10 years or more before your probable pull date is probably worthy of consideration. But, in the present system, tons of money has been spent on the last couple years of sometimes very aged people’s lives. Death panels are one answer.”

Warren believes individual responsibility for a major cut of care, particularly end-of-life care, is another solution.  His proposed solution entails:

* medical insurance deductible by all or none. This would be something like “assigned risk” car insurance for high-risk individuals;

* major co-pays (with optional but, if insurance is deductible, tax deductible medical savings accounts to cover them);

* openly published prices and outcome rates, which implies…

* immunity from liability for the disclosure of negative outcomes.

According to Warren, we need to establish a market in medical services not dissimilar to what existed before World War II. He says employer-paid health care was an end-run around WWII wage-price controls. “Its IRS deductibility shows that everybody knew and knows that health insurance is just another wage expense,” he said.

“It is no surprise that Medicare has just made everything more costly,” he added.   He believes we lost that battle when former Republican Barry Goldwater lost the 1964 presidential race to President Lyndon Johnson. In 1965, Johnson I imposed his “Great Society” welfare systems, including Medicare and Medicaid.

California is in the process of postponing inevitable cuts to the public-funded health care system. It is not the cuts, however, that are the main issue, but how to make the cuts. Those who want Obamacare see a totalitarian rationing system as the only solution. But such a system will end up just as politicized and broke just as Medicare.

This is because the middle class will eventually catch on that Obamacare will end the “American Dream” and the “California Dream” of leaving their wealth and their homes to their children.  As Machiavelli wrote: “Men more quickly forget the death of their father than the loss of their patrimony.”