A news article on CNN Money warns that a growing number of doctors in independent practices are barely able to pay their bills and many are thinking of leaving practice altogether.
“Doctors in America are harboring an embarrassing secret: Many of them are going broke,” the article reports, giving a new definition to medical bankruptcy. “This quiet reality, which is spreading nationwide, is claiming a wide range of casualties, including family physicians, cardiologists and oncologists.”
Doctors especially fear the pending cuts to Medicare, which Congress keeps patching every few months with a “doc fix.” But other reimbursement cuts and rising practice costs already are putting many of them in a cash crunch.
Dr. Mike Gorman, a family physician in Logandale, Nev., told CNN Money “Doctors don’t want to talk about being in debt” but said that if he is going to keep his practice running and pay his five employees, he must change strategies to deal with his rising business expenses and falling reimbursements.
“I will see more patients, but I won’t check all of their complaints at one time,” he explained. “If I do, insurance will bundle my reimbursement into one payment.” Patients will have to make repeat visits — an arrangement that he acknowledges is “inconvenient.”
“This system pits doctor against patient,” he said. “But it’s the only way to beat the system and get paid.”
The future is here sooner than we had feared. Chief Medicare actuary Rick Foster warned of exactly this scenario when he predicted that if the $575 billion in cuts to Medicare in ObamaCare take effect, as many as 40 percent of doctors and others treating Medicare patients would be forced to go out of business or stop seeing Medicare patients.
If we are going to keep committed, experienced physicians from retiring early or taking another job where they stop practicing medicine, we must free doctors from oppressive price controls and expensive regulations that are choking their practices.
*****
Health costs are rising. But we have a cheery op-ed in today’s Washington Post by Health Secretary Kathleen Sebelius: “The Affordable Care Act, helping Americans curb health-care costs.”
She claims that ObamaCare is helping to lower health costs “in three ways: by increasing insurance-market competition, assisting those who can’t afford coverage, and tackling the underlying cost of medical care.”
The law is doing exactly the opposite, as I argue in an article, “ObamaCare sends costs skyrocketing.” I remind people that the president repeatedly promised the American people he would cut a typical family’s premium $2,500 a year before the end of his first term. But costs are rising now even faster than before the law was enacted in March 2010.
A Kaiser Family Foundation survey found that premiums for a family policy topped $15,000 a year in 2011, increasing an average of $1,300 in the last year — three times faster than the year before.
The many ObamaCare mandates to come will raise premiums even further. Health insurance is consuming a bigger share of employer budgets, pre-empting pay raises and pushing higher costs onto employees, the Kaiser survey found.
The premium increases reflect the law’s early provisions, such as “free” preventive care and adding “children” up to age 26 to their parents’ policies. Consumers may like these features, but they come at a cost.
A number of factors contribute to rising health costs, but the mandates, taxes and regulations in the health law are accelerating the trend. The $500 billion in new taxes in the law will further fuel premium increases, including a new tax on health insurance that took effect January 1.
Analysts at the Congressional Budget Office estimate that the average policy for those who get health insurance through the workplace will cost $20,000 a year for a family of four by the year 2016. Millions of Americans who buy insurance on their own will pay at least $2,100 a year more for their policies than if the law had not passed, CBO says. And obtaining health insurance will not be optional since everyone will be required to have coverage or pay a fine.
Facts are stubborn things. The American people know their health costs are rising, despite Sec. Sebelius’ claims to the contrary, and ObamaCare will only make it worse.
*****
Notable and quotable. One of the most quotable — and knowledgeable — experts on health policy in the country is Princeton Professor Paul Starr, a long-time advisor to Hillary Clinton and more recently to President Obama. He has an article this week in The New Republic where he forcefully argues, “The Health Care Mandate Really Was a Mistake.”
“Democrats managed to get themselves the worst possible result: a law that enflames the opposition on the basis of overreaching federal power but may not work in practice because there is no real power behind it,” he writes.
“Whether or not the Court strikes it down, the individual mandate has been one of the most serious political and policy mistakes of recent decades.”
Prof. Starr demonstrated his scholarship on health policy 30 years ago when he wrote The Social Transformation of American Medicine: The rise of a sovereign profession and the making of a vast industry, for which he won the Pulitzer Prize.
One quote from that book is extremely revealing in explaining the expansion of political control over the health sector. He details how politicians have been seeking to “gain the gratitude and good will of the sick and their families” in a century-long effort, starting with German Chancellor Otto von Bismarck.
Again to quote Starr:
“Political leaders since Bismarck seeking to strengthen the state or to advance their own or their party’s interests have used insurance against the costs of sickness as a means of turning benevolence to power.”
*****
Looking ahead in 2012. The health overhaul law may be on the books in the U.S., but the battle is far from over.
All eyes are on the Supreme Court, with arguments scheduled March 26-28 and a decision likely by the end of June.
We must be prepared for many scenarios: If the court throws out the whole law (least likely), then conservatives, including state leaders, must be ready instantly to gain public support for their replacement strategy. If the court upholds the law or postpones a decision, then the battle will move to the November elections — the last stronghold before the law takes effect.
Or it could throw out parts of the law, leaving states, companies, and everyone else in a state of confusion over what’s next. The House would vote again to repeal the whole law as unfixable and then take targeted votes, possibly gaining support by enough Democrats in the Senate who are up for reelection.
Ways and Means Chairman Dave Camp has had notable success in gaining bi-partisan support for repealing parts of the law. (Jennifer Haberkorn has a piece in PolitoPro with details. Watch Politico for the article to be posted soon.) Whatever happens, Congress will continue to engage with hearings and repeal votes. Expect much more activity this year in this step-by-step march to repeal.
*****
All hands on deck. We have been busy over the holidays writing a number of new articles worthy of your attention, linked in the sidebar:
- In an article entitled “Big Brother Is Watching Your Doctor” at Forbes.com, I describe how government agents are “visiting” doctors’ offices to “suggest” how they should practice medicine. Frightening. Billions of taxpayer dollars are being poured into efforts to push doctors toward the one-size-fits-none medicine that Americans fear.(I have been invited to write a regular column for Forbes.com so watch for much more!)
- We also submitted comments to HHS complaining about an obscure and complex regulation that threatens to suffocate Health Savings Accounts. For more detail, check out the new paper by HSA guru Roy Ramthun explaining the impact. Here is a linkto our comment.HSAs just can’t fit into ObamaCare’s government-knows-best box. If the rules aren’t amended (or the law isn’t thrown out), health insurers will be forced to simply stop offering these policies — policies which offer the best hope of containing costs and giving people incentives to be partners in managing their health care and health spending.
This is the year that counts. We need all hands on deck in defense of liberty!
*****
CLIP OF THE WEEK
Joe Antos on the Diane Rehm Show
Joe Antos of the American Enterprise Institute discusses essential health benefits and what it means for consumer choice, quality of care, and legal challenges to the law.
Listen now >>
GALEN IN THE NEWS
Big Brother Is Watching Your Doctor
Grace-Marie Turner
Forbes.com, 01/05/12
A government report is in detailing the $1.1 billion in early spending on “comparative effectiveness research” (CER) by the Obama administration, and it shows the government already is setting up the systems to direct doctors to practice Washington-approved medicine. For example, a grant for $35 million went to pay government officials to visit doctors’ offices to tell them which treatments the Department of Health and Human Services recommends. A new agency, the Patient-Centered Outcomes Research Institute, will continue to hand out government funding for CER research, with one-fifth of its $500 million annual budget automatically going to HHS to support more government detailing work and “disseminate” government recommended treatment information to doctors. This is particularly alarming because we are entering an era of personalized medicine. Newer drugs, particularly the biologics that can be tailored to an individual’s particular genetic code, are unlikely to be on the government’s recommended lists. Government CER sounds like a progressive solution, but it is actually a frightening move that puts government detailers between patients and doctors and favors one-size-fits-none cost cutting over continued medical progress.
Read More »
ObamaCare sends costs skyrocketing
Grace-Marie Turner
Pittsburgh Tribune-Review, 01/03/12
The health overhaul law is driving up health-insurance costs for businesses and consumers and will inflict even higher costs on American taxpayers in the years ahead. A Kaiser Family Foundation survey found that premiums for a family policy increased an average of $1,300 in the last year — three times faster than the year before. We needed health reform, but the Affordable Care Act tried to do too much too fast and it is backfiring in its goals. It’s time to head back to the negotiating table and get this right to save consumers, businesses and taxpayers from the law’s calamitous costs.
Read More »
Comments to the Department of Health and Human Services on Medical Loss Ratio Requirements
Galen Institute, 01/05/12
The MLR rules as drafted discriminate against Health Savings Accounts (HSAs) and similar high-deductible health plans in a number of ways. These accounts provide employers, employees, and individuals with an option to purchase coverage with a larger deductible so that the polices function more like traditional “insurance” — covering medical expenses above a certain threshold. Policy holders save money because the premiums are generally lower than those for comprehensive health insurance. The Galen Institute respectfully requests that HHS exempt HSAs and other high-deductible health plans from the MLR requirement and that they ask the National Association of Insurance Commissioners to develop recommendations that would accommodate their unique financing arrangements.
Read More »
Ryan-Wyden: The Best Medicare Proposal Yet
Grace-Marie Turner
National Review Online: Critical Condition, 12/16/11
The Ryan-Wyden plan would move Medicare to a more modern defined-benefit program and give seniors a choice of competing plans — plans that would have an incentive to innovate and produce the best care at the best prices. Everyone would be guaranteed coverage, including traditional Medicare, and lower-income seniors would get extra help, including a funded account for out-of-pocket expenses. Prices would be determined by the marketplace, not Washington’s price controls. It also creates a path to a more seamless transition from job-based private insurance to Medicare. Importantly, the Ryan-Wyden plan builds on the structure that has had bipartisan support for more than a decade and which virtually everyone who has studied Medicare reform agrees is the platform to save the program from bankruptcy and from bankrupting the federal government.
Read More »
HEALTH REFORM
The Health Care Mandate Really Was a Mistake
Paul Starr, The New Republic, 01/02/12
MLR Regulation Creates Challenges for Future of Affordable Coverage
Roy Ramthun, HSA Consulting Services, LLC, 12/27/11
New insurance fee for medical effectiveness research
Ricardo Alonso-Zaldivar, Associated Press, 12/27/11
Tongue-Depressor Tax Will Harm Jobs, Innovation
Ramesh Ponnuru, Bloomberg, 01/02/12
The Rise of Consumption Equality
Andy Kessler, The Wall Street Journal, 01/03/12
Fiscal Year 2011 Financial Report of the United States Government
Government Accountability Office, 12/23/11
Why Mandated Health Insurance Is Unfair
John C. Goodman, The Wall Street Journal, 12/19/11
Empowering Patients as Key Decision Makers in the Face of Rising Health Care Costs
Karen McKeown, The Heritage Foundation, 12/27/11
Job Creation Is Price for New U.S. Health Law
Andrew Puzder, Bloomberg, 12/26/11
Obamacare uncertainties explain high unemployment
John Stossel, The Examiner, 12/21/11
The Truth About Obamacare’s Tax Subsidies and Marriage Penalty
Darrell Issa, National Review Online: Critical Condition, 12/16/11
Obamacare’s terrible, horrible, no good, very bad year
Paul Conner, The Daily Caller, 12/20/11
Feds Face Challenges In Launching U.S. Health Exchange
Julie Appleby, Kaiser Health News, 12/19/11
Officials struggle to define navigator role in health exchange
Dustin Hurst, IdahoReporter.com, 12/19/11
Five reasons your doctor hates Obamacare
Adam Frederic Dorin, M.D., MBA, The Washington Times: Communities, 12/18/11
Health Care Future Bright for Nurses, Stinks for Doctors
Merrill Matthews, Forbes: Right Directions, 12/21/11
Doctors Say Obamacare Is No Remedy for U.S. Health Woes
Sally C. Pipes, Forbes.com, 01/05/12
Doctors going broke
Parija Kavilanz, CNNMoney, 01/06/12
Over Regulation Reduces Choice in Health Insurance: An Update Health Policy Prescription
John R. Graham, Pacific Research Institute, 12/21/11
Rejecting health-care exchanges
Sally C. Pipes and Hal Scherz, The Post and Courier, 01/05/12
Innovation, Not Spending Cuts, Improves Health Care
Paul Howard, Investor’s Business Daily, 01/03/12
New information site brings health care reform into focus
Unum, 12/15/11
MEDICARE AND MEDICAID
The Ryan-Wyden plan for Medicare reform: Necessary, not sufficient, but a better restart
Thomas P. Miller, The American, 12/16/11
Ryan-Wyden: Building a more sustainable foundation for Medicare reform
Thomas P. Miller, The American, 12/19/11
13 questions that need to be answered if Wyden-Ryan is going to work
Thomas P. Miller, The American, 12/20/11
How Medicare Price Controls Have Contributed to Drug Shortages
Kathryn Nix, The Heritage Foundation, 12/21/11
PRESCRIPTION DRUGS
Big Pharma’s New Business Model
Scott Gottlieb, The Wall Street Journal, 12/27/11
The Prescription Drug User Fee Act: History and Reauthorization Issues for 2012
Amanda Kronquist, The Heritage Foundation, 12/21/11
INTERNATIONAL HEALTH SYSTEMS
The Effectiveness of the Common Drug Review in Canada’s National Drug Strategy
Amir Attaran, Rosario Cartagena, Andree Taylor, Atlantic Institute for Market Studies, 12/20/11
EVENTS
Nation vs. Nation: Do Countries Compete in Trade, Financial Services and Health Care?
American Enterprise Institute Event
Wednesday, January 18, 2012
9:00am – 12:00pm
Washington, DC