Health Care Reform: Where Are We II?
Health Care Reform: Where Are We II?
By
Ken Eliasberg
Continuing with our interim report card on the Health Care Reform proposals wending their way through Congress, let’s take a brief look at a few of the other provisions on which the Dems rely to arrive at their position of cost neutrality.
The Dr. Fix.- Another feature of the current health care reform deliberative process that bears onthe question of the Bill’s cost neutrality is
the somewhat dubious manner in which such alleged neutrality was achieved. It is a feature that (conveniently) does not even appear in either bill at all; it shows up elsewhere in the legislative process. And therein lies anotherdubious aspect of just how “cost neutrality” was arrived at.. In a legislative gesture that almost makes Bernie Madoff’s Ponzi scheme pale into insignificance (or, as the Wall St. Jl. Online put it on 10/21/09 “the fiscal deception of the century.”), Congress has seen fit to deal with another allegedly cost cutting feature in a separate legislative measure, i.e. the one dealing with compensatory rebates for Drs. This gesture was aimed at what is known as the sustainable growth rate,” of SGR which involves reimbursement to doctors under Medicare; it calls for reduction in Medicare reimbursements if costs rise too steeply. As a practical matter, Congress has always stepped in to “override such cuts,” see The Doctor Fix Is In — Adding lots of ‘dimes’ to the deficit, online.wsj.com, 10/21/09.
Were this measure to be included in the main Bill, it would have placed the Bill’s cost above one trillion dollars, and, since Obama had indicated that a trillion dollars was to be the high water mark for health care reform legislation, Congress chose instead to deal with this particular measure in this somewhat underhanded manner. I guess that with Obama and Reid et al, the whole is less than the sum of its parts.
Buy Now, Pay Now, Take Delivery Later.- Another bit of financial legerdemain employed to arrive at “cost neutrality” or, if you prefer, “bending the cost curve” is the manner in which the bill is to be paid for. A slogan, relevant to how business is conducted in our capitalistic system that has , gained a measure of public recognition over the years is “buy now and pay later.” Congress, in its effort to bring its health care reform proposals in under the prescribed triillion dollar limit, turns this slogan on its head. In its place they have come up with a more appropriate slogan — appropriate, at least, to the criminal enterprise that is now running our country — buy now, pay now, and receive delivery down the road. Specifically, we start paying for health care reform immediately (on enactment of the Bill), but the benefits proposed therein do not kick in until around 2014. Try selling this approach in the private sector; you’ll be out of business before you even get started.
Number of New Bureacracies.- It has been extensively reported that these health care reform proposals will generate upwards of 100 new bureaucracies, see, e.g. 111 New Federal Bureacracies Created in Democrats’ Health Care Bill, House Republican Conference, cnsnews.com, 11/03/09 and Democrats Whistling Past Graveyard — This is the opposite of pandering, nationalreview.com 12/11/09. And, while I am not certain of the exact number of “new” bureaucracies necessitated by the passage of this measure, I can assure you of 2 things: They will be numerous, and, in addition, existing bureaucracies will be beefed up considerably. And these bureaucracies will have lots to do, and this, in turn, will require lots of new employees. Why? Because these 2,000 page bills are not just lengthy; they are complex and far ranging in their coverage. Bear in mind that for every page of legislation it is not uncommon to produce of 10 to 20 pages of regulations dealing with the Bill’s implementation. In addition, agencies assigned implementation responsibility will be called upon to respond to specific inquiries arising under the Bill. For example, in the case of Tax law, the IRS not only promulgates thousandsof pages of regulations, they issue tens of thousands of pages of revenue rulings. In short, we shall be buried under the burden of implementing this measure.
Along these lines, I have two thoughts to urge you to keep in mind. First, the following admonition of Ronald Reagan: No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth! Trust me, he’s absolutely right!!
The second thought is taken from a brilliant article by Milton Friedman (a brilliant fellow), entitled Health Care: How to Cure Health Care, Hoover Digest, 2001 No. 3, hoover.org (or freerepublic.com, 11/19/06). Under a subheading entitled The Black Hole of Bureacratization, Friedman notes that: “Some years ago, the British physician Max Gammon, after an extensive study of the British sytem of socialized medicine, formulated what he called ‘the theory of bureaucratic displacement.’ He observed that in a ‘bureaucratic system . . . increase in expenditure will be matched by fall in production . . . Such systems will act rather like ‘black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ‘emitted production.’’ Gammon’s observations for the British system have their exact parallel in the partly socialized U.S. medical system. Here, too, input has been going up sharply relative to output. This tendency can be documented particularly clearly for hospitals, thanks to the availability of high-quality data for a long period.”
Friedman, as usual, is right on the money; if these measures are enacted look for hospital closures, higher insurance premiums, fewer quality doctors, and, as a consequence, diminished health care quality.
Medicaid.- Commentators have also called attention to the very deleterious (extravagantly costlyl) effect that these proposals will have on Medicaid. See, e.g., The Medicaid Nuclear Option- Think Medicaid is wasteful? Wait till you see what comes next, courtesy the House bill., Michael G. Franc, nationalreview.com, 12/9/09; Health Reform Could Harm Medicaid Patients — A vast expansion of the program will impose unsustainable costs on treatment centers, online.wsj.com, 12/4/09; and What are the 5 Major Flaws to the Pending Liberal Health Care Bills at Ask Heritage, askheritage.org (by the way, I note in passing that the Heritage Foundation is an extraordinary organization that does surpassingly good work; I wholeheartedly commend it to your attention).
There are many other features of these bills that are extremely worrisome in terms of their effect on both our economy and our health care system. For present purposes — i.e. an interim consideration — consideration of those discussed above will suffice. I’ll reserve further comment until the bill, if enacted, becomes the law. The fundamental point that the reader should always keep in mind is the real purpose of health care reform proposals (and those pertaining to Cap and Trade, as well as Stimulus) is the consolidation of as much power as possible in the hands of the federal government.