Thursday, August 23, 2012
In Obama's America .....
Why the Doctor Can't See You
The demand for health care under ObamaCare will increase dramatically. The supply of physicians won't. Get ready for a two-tier system of medical care
Are you having trouble finding a doctor who will see you? If not, give it another year and a half. A doctor shortage is on its way.
Most provisions of the Obama health law kick in on Jan. 1, 2014. Within the decade after that, an additional 30 million people are expected to acquire health plans—and if the economic studies are correct, they will try to double their use of the health-care system.
Meanwhile, the administration never seems to tire of reminding seniors that they are entitled to a free annual checkup. Its new campaign is focused on women. Thanks to health reform, they are being told, they will have access to free breast and pelvic exams and even free contraceptives. Once ObamaCare fully takes effect, all of us will be entitled to a long list of preventive services—with no deductible or copayment.
Here is the problem: The health-care system can't possibly deliver on the huge increase in demand for primary-care services. The original ObamaCare bill actually had a line item for increased doctor training. But this provision was zeroed out before passage, probably to keep down the cost of health reform. The result will be gridlock.
Take preventive care. ObamaCare says that health insurance must cover the tests and procedures recommended by the U.S. Preventive Services Task Force. What would that involve? In the American Journal of Public Health (2003), scholars at Duke University calculated that arranging for and counseling patients about all those screenings would require 1,773 hours of the average primary-care physician's time each year, or 7.4 hours per working day.
And all of this time is time spent searching for problems and talking about the search. If the screenings turn up a real problem, there will have to be more testing and more counseling. Bottom line: To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it, leaving no time for all the other things they need to do.
When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level. But in this country, as in other developed nations, Americans do not primarily pay for care with their own money. They pay with time.
How long does it take you on the phone to make an appointment to see a doctor? How many days do you have to wait before she can see you? How long does it take to get to the doctor's office? Once there, how long do you have to wait before being seen? These are all non-price barriers to care, and there is substantial evidence that they are more important in deterring care than the fee the doctor charges, even for low-income patients.
For example, the average wait to see a new family doctor in this country is just under three weeks, according to a 2009 survey by medical consultancy Merritt Hawkins. But in Boston, Mass.—which enacted a law under Gov. Mitt Romney that established near-universal coverage—the wait is about two months.
When people cannot find a primary-care physician who will see them in a reasonable length of time, all too often they go to hospital emergency rooms. Yet a 2007 study of California in the Annals of Emergency Medicine showed that up to 20% of the patients who entered an emergency room left without ever seeing a doctor, because they got tired of waiting. Be prepared for that situation to get worse.
When demand exceeds supply, doctors have a great deal of flexibility about who they see and when they see them. Not surprisingly, they tend to see those patients first who pay the highest fees. A New York Times survey of dermatologists in 2008 for example, found an extensive two-tiered system. For patients in need of services covered by Medicare, the typical wait to see a doctor was two or three weeks, and the appointments were made by answering machine.
However, for Botox and other treatments not covered by Medicare (and for which patients pay the market price out of pocket), appointments to see those same doctors were often available on the same day, and they were made by live receptionists.
As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare's newly created health insurance exchanges.
Their wait will only become longer as more and more Americans turn to concierge medicine for their care. Although the model differs from region to region and doctor to doctor, concierge medicine basically means that patients pay doctors to be their agents, rather than the agents of third-party-payers such as insurance companies or government bureaucracies.
For a fee of roughly $1,500 to $2,000, for example, a Medicare patient can form a new relationship with a doctor. This usually includes same day or next-day appointments. It also usually means that patients can talk with their physicians by telephone and email. The physician helps the patient obtain tests, make appointments with specialists and in other ways negotiate an increasingly bureaucratic health-care system.
Here is the problem. A typical primary-care physician has about 2,500 patients (according to a 2009 study by the Centers for Disease Control and Prevention), but when he opens a concierge practice, he'll typically take about 500 patients with him (according to MDVIP, the largest organization of concierge doctors): That's about all he can handle, given the extra time and attention those patients are going to expect. But the 2,000 patients left behind now must find another physician. So in general, as concierge care grows, the strain on the rest of the system will become greater.
I predict that in the next several years concierge medicine will grow rapidly, and every senior who can afford one will have a concierge doctor. A lot of non-seniors will as well. We will quickly evolve into a two-tiered health-care system, with those who can afford it getting more care and better care.
In the meantime, the most vulnerable populations will have less access to care than they had before ObamaCare became law.
The Health-Care Spending Claim That Made Obamacare Possible Was a Lie
Health care costs were slowing before the passage of Obamacare
Here is the way Obama put the argument in a September 9, 2009, speech about health care to a joint session of Congress:
"Then there’s the problem of rising cost....insurance premiums have gone up three times faster than wages....our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined.... Now, these are the facts. Nobody disputes them."
Obama’s voice saying “these are the facts. Nobody disputes them,” is almost enough to set off sound effects akin to those that accompany Pinocchio’s growing nose in the Disney movie.
Sure enough, now that the data are in, the emerging consensus is that health care costs, rather than “skyrocketing,” have been moderating, even flat-lining. And they were beginning to do so well before Congress passed ObamaCare in March 2010.
There have been a trickling of academic papers and journal articles tracking the trend, but the news hasn’t really yet made it fully into the political discussion.
A January 2012 article in the journal Health Affairs reported that “U.S. health spending grew more slowly in 2009 and 2010—at rates of 3.8 percent and 3.9 percent, respectively—than in any other years during the fifty-one-year history of the National Health Expenditure Accounts.” That article, by economists and statisticians who work for the Centers for Medicare and Medicaid Services, says, rather than controlling costs, ObamaCare actually increased health spending by one or two tenths of a percentage point in 2010. Overall, though, the law’s effect in 2010 was less important than were things like “the loss of patent protection for certain brand-name drugs” and “a continuing increase in the use of generic medications,” i.e., those $4 generics at Walmart.
"Slower Growth In Medicare Spending—Is This the New Normal?” was the headline on one article published in March 2012 in the New England Journal of Medicine. That discussed a series of factors. The economic downturn meant some hospitals delayed or canceled construction projects because of “tight credit markets and shrinking endowments.” Demographically, the Baby Boomers just becoming eligible for Medicare are “young elderly” who tend to be healthier and require less costly care. This article also mentions two Bush-era laws: “The Deficit Reduction Act of 2005 reduced payment rates for imaging, home health services, and durable medical equipment, and the Medicare Improvements for Patients and Providers Act of 2008 made substantial cuts to Medicare Advantage plans.”
Another New England Journal of Medicine article, from August 2, 2012, reported what it called a “marked slowdown in spending growth.” That article says that “Between 2000 and 2005, Medicare spending per enrollee grew about 7.2% annually, as compared with 9.1% growth among private payers. Between 2006 and 2010, however, growth in Medicare spending per enrollee slowed to 4.2% annually, as compared with 4.5% among private payers.” The article says growth of Medicaid spending per enrollee “was relatively slow (less than 3% per year) throughout the past decade.” Among the causes, the authors speculate, were “lower growth rates for prescription-drug spending” in part because of “the increased substitution of generics for brand-name drugs.”
According to the National Health Expenditure Accounts maintained by the Department of Health and Human Services, health care spending was about 14 percent of GDP from 1997 to 2001, then grew to about 16 percent from 2003 to 2007. In 2009 and 2010 it was at 17.9 percent. After just about doubling to $2.4 trillion from $1.2 trillion in the decade between 1998 and 2008, health care spending was about $2.5 trillion in 2009 and about $2.6 trillion in 2010.
The man who was President Obama’s White House budget director, Peter Orszag, weighed in last week from his new perch in the private sector with a column acknowledging that “The rising cost of health care in the U.S. has been slowing over the past few years.”
“Slowing,” not “skyrocketing,” got that? Now he tells us. In an email to me, Orszag tried to credit both President Obama’s stimulus spending on electronic health records and the ObamaCare law for the slowdown. But his timing and his logic are both off base.
Republicans who opposed ObamaCare in the first place can use these new facts as part of an argument for repeal. The “skyrocketing” costs that the president used to sell the law were already slowing without the new law. But in pushing their own health-care reform agenda to replace ObamaCare, Republicans will have to be careful not to repeat the president’s mistake. Even markets with huge government involvement, like health care in America, sometimes have ways of self-correcting.
Thanks to Pro-Free Market Reforms, Chile Is the Latin Tiger
A good article below but a pity that it does not directly mention the essential role of Augusto Pinochet in the Chilean reforms
The world is a laboratory, with some nations (such as France) showing why statism is a mistake, other jurisdictions (such as Hong Kong) showing that freedom is a key to prosperity, and other countries (such as Sweden) having good and bad features.
It’s time to include Chile in the list of nations with generally good policies. That nation’s transition from statism and dictatorship to freedom and prosperity must rank as one of the most positive developments over the past 30 years.
Here’s some of what I wrote with Julia Morriss for the Daily Caller. Let’s start with the bad news.
"Thirty years ago, Chile was a basket case. A socialist government in the 1970s had crippled the economy and destabilized society, leading to civil unrest and a military coup. Given the dismal situation, it’s no surprise that Chile’s economy was moribund and other Latin American countries, such as Mexico, Venezuela, and Argentina, had about twice as much per-capita economic output."
Realizing that change was necessary, the nation began to adopt pro-market reforms. Many people in the policy world are at least vaguely familiar with the system of personal retirement accounts that was introduced in the early 1980s, but we explain in the article that pension reform was just the beginning.
Let’s look at how Chile became the Latin Tiger. Pension reform is the best-known economic reform in Chile. Ever since the early 1980s, workers have been allowed to put 10 percent of their income into a personal retirement account. This system, implemented by José Piñera, has been remarkably successful, reducing the burden of taxes and spending and increasing saving and investment, while also producing a 50-100 percent increase in retirement benefits. Chile is now a nation of capitalists. But it takes a lot more than entitlement reform, however impressive, to turn a nation into an economic success story. What made Chile special was across-the-board economic liberalization.
We then show the data (on a scale of 1-10) from the Fraser Institute’s Economic Freedom of the World, which confirm significant pro-market reforms in just about all facets of economic policy over the past three decades.
But have these reforms made a difference for the Chilean people? The answer seems to be a firm yes.
"This has meant good things for all segments of the population. The number of people below the poverty line dropped from 40 percent to 20 percent between 1985 and 1997 and then to 15.1 percent in 2009. Public debt is now under 10 percent of GDP and after 1983 GDP grew an average of 4.6 percent per year. But growth isn’t a random event. Chile has prospered because the burden of government has declined. Chile is now ranked number one for freedom in its region and number seven in the world, even ahead of the United States."
But I think the most important piece of evidence (building on the powerful comparison in this chart) is in the second table we included with the article.
Chile’s per-capita GDP has increased by about 130 percent, while other major Latin American nations have experienced much more modest growth (or, in the tragic case of Venezuela, almost no growth).
Perhaps not as impressive as the performance of Hong Kong and Singapore, but that’s to be expected since they regularly rank as the world’s two most pro-market jurisdictions.
But that’s not to take the limelight away from Chile. That nation’s reforms are impressive - particularly considering the grim developments of the 1970s. So our takeaway is rather obvious.
"The lesson from Chile is that free markets and small government are a recipe for prosperity. The key for other developing nations is to figure out how to achieve these benefits without first suffering through a period of socialist tyranny and military dictatorship."
Heck, if other developing nations learn the right lessons from Chile, maybe we can even educate policy makers in America about the benefits of restraining Leviathan.
P.S. One thing that Julia and I forgot to include in the article is that Chile has reformed its education system with vouchers, similar to the good reforms in Sweden and the Netherlands.
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Posted by JR at 12:38 AM