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Rationed Care: It Is Here Already

Stanley Feld M.D.,FACP,MACE

Rationing of healthcare and restricting access to medical care is here already. It is here even before President Obama’s healthcare reform act goes into full effect. It has resulted from decreasing reimbursement for Medicare services and terrible reimbursement for Medicaid services.

President Obama plans to expand Medicaid to provide services to the uninsured. The states cannot afford to pay for Medicaid at present levels. Adding 32 million people to its roles will lead to a further decrease in reimbursement and further delays in access to care.

Presently, there are not enough physicians accepting Medicaid to take care of the Medicaid patients. When physicians accept Medicaid patients they use physician extenders to help take care of the increased volume necessary to survive the decreased reimbursement. It also raises a government red flag. The result is investigating those physicians for fraudulent billings. This discourages more physicians from taking care of the Medicaid patients.

America is progressing at an unprecedented rate toward increased rationing and decreased access to medical care. I imagine President Obama’s plans to replace physicians with lower levels of “healthcare providers.”

It would be very easy to fix the healthcare system using appropriate measures. I do not think that repairing the existing healthcare system is President Obama’s goal. His goal is to make the entire population dependent on the central government.

It will not work. Wealthy people will always be able to buy most of the medical care they would need. If we stay on the current course, everyone else will experience long lines, decreased access to care and rationing of care.

President Obama, through regulations could try to mandate that all physicians see all patients as a condition for renewal of their medical license.

This would represent government control over individual rights and freedom of choice. It would be unconstitutional.

“The underlying problem is that doctors are reimbursed at different rates, depending on whether they see a patient with private insurance, Medicare or Medicaid. As demand increases relative to supply, many doctors are likely to turn away patients whose coverage would pay the lower rates.”

Medicaid reimbursement is 40-80% of the reimbursement rate of Medicare. Private insurance is higher than Medicare. The preference for patient load is obvious private insurance patients first, then Medicare and finally Medicaid. Physicians are not accepting Medicaid patients and are starting to close their practices to Medicare patients.

President Obama’s new health care legislation is likely to speed this process. Under the new law, tens of millions of additional Americans will receive coverage through Medicaid or private insurance. This will intensify the lack of access to medical care. We have seen it in Massachusetts after the state passed its healthcare reform bill. (Romneycare)

“Ideally, higher demand for medical care would prompt increases in supply, which in turn would lower prices and expand access. But the health care sector does not always work this way.”

Physicians are highly regulated and in that manner restricted in supply. The Association of American Medical Colleges estimates that the United States could face a shortage of 150,000 doctors in the next 15 years.

President Obama probably figures he will add to the supply with substitute physicians. The problem is when people are sick they want a physician.

President Obama’s healthcare law will result in promoting individual private insurance coverage. The plan going to offer subsidies to many individuals that could not afford or obtain private insurance previously.

An unintended consequence is that his healthcare reform act will create incentives for employers to discontinue providing employees’ insurance coverage. Employers’ will pay the modest penalty which will force employees to buy healthcare insurance from federally subsidized healthcare insurance exchanges.

Employees will pay for the healthcare insurance with after tax dollars at a reduced rate. It will reduce consumer spending for other things. The government subsidy will strain the federal health budget even further. The winners will be the healthcare insurance industry and employers. The losers will be consumers and the government.

The American system of federalism, with its checks and balances and slow policy evolution, has many strengths, but it has also helped create this crazy quilt of health care reimbursement rates. The more demand-side pressure is placed on medical supply, the more Medicaid and Medicare reimbursements rates will determine who and what is rationed.

Singapore’s healthcare system is a sort of ideal medical savings account. The government requires workers to save 10 percent of their income for medical care. Consumers pay for medical care from those savings. The government pays for any of the expenses beyond those savings. The Singapore healthcare system has had success in controlling costs and access to care.

Singapore’s healthcare system is a consumer driven system. Consumers become responsible for their care and have incentives to save money for their medical care. The ideal medical savings account system is a cleaner system.

The real issue is there are many things that can be done to the healthcare system to align incentives, decrease abuses and reduce costs.

President Obama’s healthcare reform act is not doing any of them. He is going to make things worse. A healthcare system must be created that will be driven by consumers. We must give consumers incentives to control their health and healthcare dollars.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

  • Gavanw

    Great analysis, and I was not aware of Singapore’s system until now. Unfortunately, most people are idealists and don’t care to explore the technicalities of government-run healthcare. Hopefully the realty sinks in sooner rather than later.

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