Thursday, March 18, 2010

Health care bill can be beaten

House passage of the Democrats' health care bill is not a foregone conclusion despite their 75-seat majority in the chamber. While party leaders such as Speaker Nancy Pelosi and White House spinmeister David Axelrod bravely express confidence, Rep. James E. Clyburn of South Carolina, the House majority whip, conceded on NBC's "Meet the Press" that Democrats don't have enough votes yet.

The all-out effort to ram through the legislation before Easter recess is telling. If members of Congress merely risked being confronted by Potemkin crowds that don't represent the majority of voters, there would be nothing to fear. However, Democratic strategists know these crowds are very real and very mad, and the mobs will rattle wavering congressional votes, especially in vulnerable districts. The latest Rasmussen poll shows that independents oppose the mass of new regulations and taxes by a wide margin of 64 percent to 32 percent.

Despite the barrage of political attacks on insurance companies over the past year, 76 percent of Americans with insurance still rate their coverage as "excellent" or "good." Rasmussen Reports notes that this group has "proven to be a major obstacle for advocates of reform." Last year, Mr. Obama repeatedly promised he wouldn't interfere with the insurance of those who liked their current policies, but that vow has been broken. It's no wonder a constant trickle of Democrats is expressing concern about the party's policy agenda.

According to the latest vote count, released early Tuesday morning by the Hill newspaper, 37 Democrats are either firm "no" votes or "leaning no." Add a wavering Rep. Timothy H. Bishop, New York Democrat, and the number is 38. That is the exact number needed to defeat the bill, and it is up from the 25 firm "no" or "leaning no" votes on Thursday. Of the 38, 28 voted against the bill in November. In total, 55 Democrats reportedly are undecided. If the nays hold and just two of those undecided votes switch, the bill will be defeated.

According to Rep. Bart Stupak, Michigan Democrat, special deals were offered recently to peel off one or two of the 11 Democrats who stood with him against government-funded abortions. He accused his party's leadership of never having had any intention of fixing the abortion language, a posture he attributed to the leaders' belief that the votes of the 12 pro-life Democrats wouldn't be needed. "We'll probably have to wait until the Republicans take back the majority to fix this," Mr. Stupak told National Review, almost sounding wistful for that day.

Democrats are full of a lot of false bravado. Through July, August and October, they kept claiming the votes to pass the health care takeover were imminent. They were wrong.

Democrats still may be able to cobble together enough backroom payoffs or use various tricks and pressure for passage. On Intrade, the largest prediction market, the betting is swinging in favor of the health care takeover, with the latest odds giving Democrats a 70 percent chance of passing it. Stopping this travesty depends on voters expressing their outrage to Democrats on Capitol Hill.


With Medicaid Cuts, Doctors and Patients Drop Out

If America can't afford to pay for Medicare, how can it afford Obamacare?

Carol Y. Vliet began chemotherapy to treat her cancer, but lost her doctor because he stopped seeing Medicaid patients. As she began a punishing regimen of chemotherapy and radiation, Mrs. Vliet found a measure of comfort in her monthly appointments with her primary care physician, Dr. Saed J. Sahouri, who had been monitoring her health for nearly two years. She was devastated, therefore, when Dr. Sahouri informed her a few months later that he could no longer see her because, like a growing number of doctors, he had stopped taking patients with Medicaid.

Dr. Sahouri said that his reimbursements from Medicaid were so low — often no more than $25 per office visit — that he was losing money every time a patient walked in his exam room. The final insult, he said, came when Michigan cut those payments by 8 percent last year to help close a gaping budget shortfall. “My office manager was telling me to do this for a long time, and I resisted,” Dr. Sahouri said. “But after a while you realize that we’re really losing money on seeing those patients, not even breaking even. We were starting to lose more and more money, month after month.”

It has not taken long for communities like Flint to feel the downstream effects of a nationwide torrent of state cuts to Medicaid, the government insurance program for the poor and disabled. With states squeezing payments to providers even as the economy fuels explosive growth in enrollment, patients are finding it increasingly difficult to locate doctors and dentists who will accept their coverage. Inevitably, many defer care or wind up in hospital emergency rooms, which are required to take anyone in an urgent condition.

Mrs. Vliet, 53, who lives just outside Flint, has yet to find a replacement for Dr. Sahouri. “When you build a relationship, you want to stay with that doctor,” she said recently, her face gaunt from disease, and her head wrapped in a floral bandanna. “You don’t want to go from doctor to doctor to doctor and have strangers looking at you that don’t have a clue who you are.”

The inadequacy of Medicaid payments is severe enough that it has become a rare point of agreement in the health care debate between President Obama and Congressional Republicans. In a letter to Congress after their February health care meeting, Mr. Obama wrote that rates might need to rise if Democrats achieved their goal of extending Medicaid eligibility to 15 million uninsured Americans.

In 2008, Medicaid reimbursements averaged only 72 percent of the rates paid by Medicare, which are themselves typically well below those of commercial insurers, according to the Urban Institute, a research group. At 63 percent, Michigan had the sixth-lowest rate in the country, even before the recent cuts.

In Flint, Dr. Nita M. Kulkarni, an obstetrician, receives $29.42 from Medicaid for a visit that would bill $69.63 from Blue Cross Blue Shield of Michigan. She receives $842.16 from Medicaid for a Caesarean delivery, compared with $1,393.31 from Blue Cross.

If she takes too many Medicaid patients, she said, she cannot afford overhead expenses like staff salaries, the office mortgage and malpractice insurance that will run $42,800 this year. She also said she feared being sued by Medicaid patients because they might be at higher risk for problem pregnancies, because of underlying health problems.

As a result, she takes new Medicaid patients only if they are relatives or friends of existing patients. But her guilt is assuaged somewhat, she said, because her husband, who is also her office mate, Dr. Bobby B. Mukkamala, an ear, nose and throat specialist, is able to take Medicaid. She said he is able to do so because only a modest share of his patients have it.

The states and the federal government share the cost of Medicaid, which saw a record enrollment increase of 3.3 million people last year. The program now benefits 47 million people, primarily children, pregnant women, disabled adults and nursing home residents. It falls to the states to control spending by setting limits on eligibility, benefits and provider payments within broad federal guidelines.

Michigan, like many other states, did just that last year, packaging the 8 percent reimbursement cut with the elimination of dental, vision, podiatry, hearing and chiropractic services for adults.

When Randy C. Smith showed up recently at a Hamilton Community Health Network clinic near Flint, complaining of a throbbing molar, Dr. Miriam L. Parker had to inform him that Medicaid no longer covered the root canal and crown he needed.

A landscaper who has been without work for 15 months, Mr. Smith, 46, said he could not afford the $2,000 cost. “I guess I’ll just take Tylenol or Motrin,” he said before leaving.

This year, Gov. Jennifer M. Granholm, a Democrat, has revived a proposal to impose a 3 percent tax on physician revenues. Without the tax, she has warned, the state may have to reduce payments to health care providers by 11 percent.

In Flint, the birthplace of General Motors, the collapse of automobile manufacturing has melded with the recession to drive unemployment to a staggering 27 percent. About one in four non-elderly residents of Genesee County are uninsured, and one in five depends on Medicaid. The county’s Medicaid rolls have grown by 37 percent since 2001, and the program now pays for half of all childbirths.

More here

Not So Fast! Will Medical “Reform” Cut Real Costs?

by William L. Anderson

It seems that the so-called health care “reform” bill will become law soon enough. (President Barack Obama has told recalcitrant Democrats in the House of Representatives that he won’t campaign for them if they vote no. Most will give into the President.)

Therefore, I am more interested in what will occur after the bill is passed, not the sordid politics behind it. Specifically, I want to take a hard look at the president’s claim (echoed by economists like Paul Krugman) that the new law will reduce costs.

According to the Congressional Budget Office, Obama’s plan will produce “savings” in medical procedures. Not surprisingly, much of the media (and especially the New York Times), has been echoing the same chorus.

However, I think this claim truly falls into the “Not So Fast” category. In my view there is no possibility that the President’s plan will even remotely cut real costs. The true legacy of this bill will be to add costs in ways we hardly can imagine.

Given that the bill imposes new mandates, further subsidizes the consumption of medical services, and orders insurance companies to cover applicants no matter their health status, one is hard-pressed to find the “cost savings.” Medicare will supposedly cost half a trillion dollars less because the government will order such a state of being into existence. The “waste, fraud, and abuse” that every preceding administration promised to root out will finally meet their match with the Obama administration.

Since the plan won’t really cut costs, medical price controls could be in our future. Without going into the various economic dislocations created by price controls, let me deal with an even more fundamental issue: the nature of costs. It is telling that economists who support the bill because of its alleged “costs savings” are exposing their own ignorance about costs. To them, a “cost” is nothing more than a monetary outlay that is paid for a certain good or service. If government orders the prices paid in those transactions to be lower, then — voila! — costs are lower.

Opportunity Costs

At best, this is a childish view of costs and certainly not a view that any serious economist would hold. Costs, according to basic economic theory, are opportunity costs, or the value to an individual of the closest forgone activity. By imposing lower prices, the government would be raising the opportunity costs to individuals taking part in the exchange. Far from lowering costs, the proposed measures ultimately would result in higher real costs.

For example, if the government forces down the price of a medical procedure below the level at which all service providers can be adequately compensated, then the procedure won’t be done at all. While that would mean no money outlays, “officially” lowering costs, the person for whom the procedure is denied would bear a real cost by having to suffer the malady that drove him or her to the doctor in the first place.

Supporters of ObamaCare claim that Canada and Great Britain have lower medical costs with their government-run systems than America does. However, many of those “savings” come about because people are denied care, or must make do with cheaper but inferior alternatives.

In other words, the “savings” come at the expense of individuals who wish to receive care. It might be possible, through accounting trickery, to show that the new medical “system” has lowered the federal deficit, but it cannot and will not lower the real costs we will pay.


The truth about health insurance premiums and profits

In a recent Fox News debate about health insurance, Democratic political strategist Bob Beckel explained that, "The president needed an enemy, and the insurance companies are it." Proving that point in a Pennsylvania stump speech, President Obama asked, "How much higher do premiums have to go before we do something about it? We can't have a system that works better for the insurance companies than it does for the American people."

On February 20, President Obama used his weekly radio show to express outrage that a fraction of Californians buying individual Anthem Blue Cross Blue Shield (BCBS) plans "are likely (sic) to see their rates go up anywhere from 35 to 39 percent." He used those figures to justify preempting state regulation "by ensuring that, if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable."

There was always something peculiar about this desperate effort to demonize certain health insurers. Individual plans account for only 4 percent of the insurance market. So why do they account for 100 percent of the president's fulminations about insurance premiums? Could it be because insurance premiums for the other 96percent have not been rising much?

Nonprofit BCBS plans account for a third of the private health insurance market. Michigan's nonprofit asked for 56 percent premium hike without the national media taking that Hail Mary pass too seriously. But even Obama finds it difficult to accuse nonprofits of being too profitable, so he needed to pin his enemy badge on a for-profit firm – one of Wellpoint's "Anthem" BCBS plans.

Anthem of California's requested rate increase on individual policies was actually 20-35 percent. The only way it could get to 39percent would be if a policyholder insisted on a gold-plated Cadillac plan and also happened to move up into a higher age group. Besides, requesting a rate hike means nothing. Even Obama's radio address mentioned two requests that had been cut in half. Many are denied.

So, how many Californians have actually been faced with a 39 percent increase in their premiums? Exactly zero.

How many are really "likely" to be faced with even a 35 percent increase after state insurance regulators have their say? My forecast: Zero.

The president highlighted the "likely" increases of "35 to 39 percent" to suggest insurance companies in general were asking for huge premium increases just to boost their lavish profits. He complained that in the $1.2 trillion health insurance industry, "the five largest insurers made record profits of over $12 billion." But that puny sum includes WellPoint's sale of its pharmacy benefits management company NextRX to Express Scripts for $4.7 billion last April. Adding that $4.7 billion to WellPoint profits is like saying a family's income rose by $1 million because they sold a million-dollar home.

University of Michigan economist Mark Perry calculated that without the sale of NextRX, "WellPoint's profit margin would have been only 3.9 percent, the industry average profit margin would have been closer to 3percent"— $100 per policy. Yet Obama concluded that, "The bottom line is that the status quo is good for the insurance industry and bad for America."

The media echoed the president words endlessly, and wrote as though one company's hypothetical request for increases of 35 percent-39 percent were a nationwide threat—even to those with group insurance—rather than an unique and highly unlikely request that might (if magically approved) touch a miniscule number in a hostile state for health insurers.

"It doesn't take too many 39 percent increases, like the recent one proposed in California that has garnished so much attention, to put insurance out of reach," exclaimed a New York Times report. That same paper's editorial added, "The recently announced plan by Anthem Blue Cross in California to raise annual premiums by 35 to 39 percent for nearly a quarter of its individual subscribers is a chilling harbinger of what is to come if reform fails." Really?

Grasping for confirmation of the 39 percent figure, some reporters cited a Feb. 24 memo about Wellpoint written by journalist Scott Paltrow for The Center for American Progress Action Fund. Paltrow gathered news clippings suggesting premiums are "expected to" increase by "up to" some scary number in various states. For California, however, Paltrow's source was the president's speech. This Action Fund is a is no "liberal think tank," as the Wall Street Journal put it, but a 501(c)4 lobby which can participate in campaigns and elections. Founded by Bill Clinton's former chief of staff John Podesta, it's a propaganda arm of the Democratic Party.

A Wall Street Journal story about Wellpoint's wish list for higher premiums cites the Department of Health and Human Services as its source. That means a shoddy four-page polemic at, "Insurance Companies Prosper, Families Suffer." That pamphlet, like another from the Commonwealth Fund, cites Duke Helfand, an L.A. Times reporter who wrote on Feb. 4 that, "brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30percent to 39 percent."

So, the president's 39 percent figure came from Duke Helfand, who heard it from insurance brokers who, in turn, said they heard it from customers. The 39 percent figure referred to one person named Mary. After rounding Helfand's 30 percent up to 35 percent, however, that was good enough for the president's purposes.

Like Obama, the "Insurance Companies Prosper" pamphlet repeatedly confuses asking with getting. "Anthem Blue Cross isn't alone in insisting on premium hikes," it says; "Anthem of Connecticut requested an increase of 24 percent last year, which was rejected by the state." So what? If you went to your boss and insisted on a 24 percent raise, would that constitute proof that wages are rising too fast?

If Obama has been reduced to basing the redistribution of health care on the cost of health insurance premiums, he will need much better facts. Fortunately, credible statistics on health insurance premiums are readily available from the Centers for Medicare and Medicaid Services (CMS) and Bureau of Labor Statistics.

CMS statistics (Table 12) reveal that the net cost of private health insurance – premiums minus benefits – fell by 2.8percent in 2008. Furthermore, CMS Health Spending Projections predict that spending on private health insurance will rise 2.5percent in 2010, while prices of medical goods and services rise by 2.8percent.

Consumers' cost of health premiums is also part of the detailed consumer price index. After all the overheated rhetoric about "requested" or "expected" increases of "up to" 39 percent, who would have imagined that the average consumer cost of health insurance premiums fell by 3.5 percent in 2008 and fell by another 3.2 percent in 2009?

The president's health insurance proposals hoped to use stern command-and-control techniques to run the health insurance system. It was all about minimizing free choice and maximizing brute force—forcing people to buy certain kinds of politically-designed insurance, forcing insurers to cover services many consumers do not want to pay for, and forcing insurers to curb or roll back premiums even as medical costs go up. The whole shaky apparatus was built upon even shakier statistics—including the purely hypothetical 39 percent increase in premiums that Mary's insurance agent reported to Duke Helfand.


British hospital trusts warned over poor infection control

Five health trusts were issued with warnings about serious breaches in hospital infection control by the health regulator last year.

An assessment of hospital infection standards resulted in the five warnings from the Care Quality Commission but the trusts responded quickly to all five warnings, which are no longer in a “red flag” category on the issue, the regulator said.

In last year's infection assessment 42 of 167 trusts were found by the CQC to be in "breach" of NHS registration requirements, although the regulator said all but five were minor breaches.

Ambulance services in the north-west, east of England and east Midlands were the worst offenders, and received formal warnings for the state of vehicles and stations. The regulator said all had responded and now met the requirements in follow-up assessments.

The CQC carried out the assessment as part of preparations for a new licensing regime beginning on April 1. Several trusts are expected to receive conditions in the registration process because of concerns about some core care standards.


Incompetent butcher doctors free to work in the NHS

An elderly woman died after a German locum doctor carried out one of the “worst botched operations” seen in a British hospital, an inquest heard yesterday. Ena Dickinson, a former NHS volunteer, was left unable to walk after the locum made a series of errors during a routine hip operation at Grantham & District Hospital. Werner Kolb removed bone that should have remained intact and severed a major artery during the operation.

Mrs Dickinson, a 94-year-old former nurse and Red Cross volunteer from Barrowby, Lincolnshire, was left bleeding to death on the operating table. It was only when a consultant at the hospital stepped in that her life was saved. However, two months after the August 2008 operation Mrs Dickinson died. Kathy Ingram, her daughter, said that after dedicating her life to the NHS it had “let her down” when she needed it most.

Orthopaedic specialist Professor Angus Wallace told the inquest it was “the worst botched operation” he had seen. The professor, who is based at Nottingham’s Queen’s Medical Centre, was so concerned about the case that he reported the doctor to the General Medical Council.

Last week MPs heard how a “gaping hole” in the rules on foreign doctors working in Britain is putting patients at risk. The Health Select Committee is currently investigating out-of-hours-care following the death of David Gray in Cambridgeshire in 2008. He was killed by another German doctor, Daniel Ubani, who administered 10 times the normal dose of diamorphine. Dr Ubani had flown to Britain to provide out of hours care under a contract from the local health authority.

In 2004, ministers gave GPs a controversial new contract that allowed them to give up responsibility for out-of-hours care. The General Medical Council said it is prevented from testing the qualifications of European locums who are brought in as cover.

Dr Kolb, 51, who is based in Stuttgart, was given an interim suspension by the GMC for 18 months last year. Giving a narrative verdict, coroner Stuart Fisher described it as a “most disturbing case”.

Mrs Ingram said: “We feel let down. We don’t quite understand how he got to operate on my mother. “My mother was somebody who was involved in the NHS and supported it even into her retirement working on the tea bar at her local hospital. After all those years the NHS let her down.”

A spokesman for United Lincolnshire Hospitals Trust said: “The Trust has apologised to Mrs Dickinson’s family for mistakes made during her operation. “Errors were made by the surgeon concerned which were rectified immediately by a senior member of staff. After the operation Mrs Dickinson was recovering well and assessed to be medically fit for discharge by 25 September 2008.

“The Trust has done everything possible to learn from this incident and to prevent it happening to another patient. Changes have been made to the recruitment of medical staff, including the appointment of locums, and a new surgical safety checklist produced by the World Health Organisation has now been implemented throughout the Trust.”


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