After months of denial that healthcare reform would involve rationing of healthcare for those who are the most vulnerable, the senior citizens who depend on Medicare, the President has come up with a proposal to decrease healthcare costs and guess what….it’s rationing.

Under Obamacare, a 15 member panel known as the Medicare Independent Payment Advisory Board (IPAB) was created to ‘oversee healthcare costs’. This panel consists of individuals appointed by the President and confirmed by Congress – two ingredients that make it highly unlikely that they would be truly independent. In addition, there is no requirement that members be practicing physicians which is a recipe for cuts that are highly likely to affect the delivery of quality individualized patient care.

Under his deficit reduction plan, the President proposes to expand the power of this unelected entity to increase the GDP growth per capita cut from the current 1% to 5%. In addition, under his proposal Medicaid payments to states would also be tightly controlled and access to drugs would be limited through spending on prescription drugs.

There are two things that make this proposal doomed to fail if the goal is to decrease health costs while providing quality care:

(more…)

Health care reform is the latest piece of the puzzle to be put in place. If you add this to what has happened in the financial industry and the banking industry a bigger picture begins to emerge. With the proposed financial regulations, there seems to be a movement towards the consolidation of power in a few institutions, systematically removing free competition, setting up the too big to fail phenomenon, thereby giving people less choice that will ultimately cost everybody more in the long run.

Since the passage of healthcare reform, there has not been a lot of talk about the role that hospitals will play. What no one talks about is the fact that there has been a quiet movement or shift of doctors from private practice to hospital employees. Many smaller community hospitals and doctor owned hospitals have gone out of business because they could not afford to keep their doors open. In addition, there has also been a quiet consolidation of hospitals. For example, in Atlanta, groups of specialists have become hospital employees.  With the movement of various specialists, hospitals have now become specialty centers for specific patient care.

It is not hard to visualize a future where there will only be a certain number of hospitals that are able to provide care for specialized diseases such as cardiac care, or orthopedic surgery.  If that happens, access will be restricted since patients will be limited as to where they will be able to go to receive their care.  If there was only one specialty heart center in the city and only a certain number of doctors on staff, by definition, there will be a limited number of patients that can be treated at any specific time. Unfortunately, these changes will likely lead to the de facto rationing of care.  In addition to the problem of access, costs will likely go up because of the lack of competition.

The demise of Lehman Brothers and the consolidation of other large financial companies have led to very few winners in the financial industry – the biggest of which is Goldman Sachs.  The banking industry has seen a few surviving large institutions such as Chase and Citibank. What the larger banks didn’t acquire in mergers, the FDIC removed by taking over and closing hundreds of smaller and community banks. Makes you wonder if the credit unions will be next on the list.

(more…)

In a recent article published in The Atlantic Jonathan Gruber, an economist from MIT was enthused over the Senate’s healthcare bill because of its kitchen sink approach to the problem of rising healthcare costs. “I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill.” This quote is a distillation of the problem I have with the whole healthcare reform effort. It seems like a case of throw it up on a wall and see if it sticks.

From the beginning of the debate and the resultant bills in Congress there has been no thought put into the root cause of the high cost of healthcare. As usual the players who were allowed to sit at the table were the ones who had the most to lose if the status quo really changed. Special interest groups (i.e., unions, hospitals corporation, medical insurance industry, pharmaceutical industry, and the AMA) each flooded Washington with money and controlled both the argument, and the perceived solutions for the mess that has become our healthcare system. At no point were physicians on the front line who deliver patient care or patients who are victims of the health insurance maze given a voice in the process let alone a seat at the table.

(more…)