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Critical Condition

NRO’s health-care blog.


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SCOPE Act: Protecting the Physician-Patient Relationship

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A multitude of flaws in President Obama’s health- care law have been exposed, both prior to its enactment and since it passed on a straight party line vote. They range from tax hikes on small business owners and the middle class, to gutting $716 billion from Medicare, to its punitive individual mandate.

Little attention has been paid, however, to a component of the Affordable Care Act found in section 1311(h), which will prove catastrophic to the doctor-patient relationship. These few lines empower one bureaucrat—the Health and Human Services (HHS) Secretary—to determine whether a physician is providing “quality health care measures.” Based on that finding, the Secretary is empowered to cancel a physician’s health insurance provider policy, effectively forcing him out of practice.

Allowing the HHS Secretary, who is not governed by the Hippocratic Oath or a state medical board, to define “quality health care measures” will have a devastating impact on our health care system. Consider the recent controversy surrounding mammogram guidelines. In 2009, the U.S. Preventative Services Task Force advised mammograms for women over 50, which contradicts the American Cancer Society’s typical guideline that screenings begin at 40, and therefore served to divide the medical community.

Under President Obama’s health care law, should the HHS Secretary determine that performing mammograms on women younger than 50 violates a standard of care, the provider must comply, regardless of his or her concerns. Failure to do so would allow the Secretary to shut down a medical practice. The powers given to the Secretary are so broad, he or she could literally dictate how all physicians nationwide practice medicine. 

This violates the sanctity of the doctor-patient relationship, as physicians are trained to treat patients individually and not with a “one-size-fits-all” approach. Under this new regulation, patients’ standard of care may be diminished. This rule also threatens access, driving more doctors from their practices and creating an even greater shortage of medical providers. In turn, patients will face longer wait times in between appointments, and in some cases, it will be time they can’t afford to lose. Oftentimes, it is the sickest and poorest Americans’ access to care that is disproportionately threatened.

Much like the Medicare “cost-cutting” panel known as IPAB, section 1311(h) places another unelected bureaucrat in Americans’ health care decisions. The Secretary does not answer to a governing board and may be influenced by special interest groups or political  and financial interests. The regulation also directly contradicts the President’s promise that “if you like your doctor, you can keep him.”

The Safeguarding Care of Patients Everywhere (SCOPE) Act repeals this regulation, protecting patients’ access to their medical providers and ensuring physicians may continue treating individuals as they deem necessary. The SCOPE Act continues to hold physicians accountable to their state licensing boards, insurance companies and professional groups, rather than one federal bureaucrat.

The SCOPE Act is not a partisan issue, but a patient issue. We must ensure that those in need of care receive it from a medical provider who is not handcuffed by the HHS Department. Simply put, providers must be free to diagnose and treat patients as they have been trained and according to their sacred oath. Standards of practice must not fall victim to different administrations, leaving patients and physicians in the crossfire. Passing the SCOPE Act safeguards medical standards from the whims of political parties and the grips of outside influence. 

— Representative Phil Gingrey, M.D., is the U.S. congressman for Georgia’s eleventh district.

A Small-Government Solution to a Big-Government Problem

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Democrats — the perennial defenders of Medicare as we know it — have turned Medicare upside down with the adoption of Obamacare. And now the alarm bells are ringing in our senior-citizen communities as a result.

As it turns out, the GOP seems intent on branding itself this fall as the defenders of Medicare, attacking President Obama relentlessly for the hundreds of billions of dollars in cuts he’d make to the program to pay for his signature health-care reform law.

And while Governor Romney and his running mate, Representative Paul Ryan, may spend most of their airtime alerting Americans to the president’s cuts to Medicare, it’s their market-centered approach to reforming the program that deserves conservatives’ attention.

Only by reorienting Medicare in line with the principles of market competition can our leaders prevent the entitlement from sinking the federal budget — not to mention the economy.

Ryan’s plan to save Medicare keeps Medicare as-is for everyone over the age of 55. It then relies on a “premium support” model toward future recipients, which would provide seniors with subsidies and enable them to decide how to spend their health-care money. They’d be able to choose from an array of private plans or stick with traditional Medicare.

The would-be veep’s bold approach has become a tent-pole of Governor Mitt Romney’s presidential platform — and has distinguished the GOP ticket as the one that understands the need to introduce competitive discipline into an entitlement system wracked by inefficiency and waste.

Compare this to the Democrats’ plan for Medicare. Obamacare robs the entitlement to the tune of $716 billion by cutting payments to health-care providers.

That’s of great concern to American voters. Nearly three-quarters are worried that cuts in payments to doctors and hospitals will cause them to stop accepting Medicare patients, according to a new American Conservative Union (ACU) poll conducted by McLaughlin and Associates.

Even worse, Democrats are determined to undo the aspects of Medicare that harness market forces — and thereby yield lower costs than the alternative — like the Medicare Part D drug benefit.

Part D allows seniors to purchase prescription drug coverage from private insurers. Beneficiaries can shop around for the plan that best meets their prescription needs. Insurers must compete for enrollees’ business. And the government subsidizes most or all of the plan’s price.

As conservatives we have never been fans of the expansion of the entitlement state that Part D represents. But the Democrats’ plans for reforming the program would only make our entitlement crisis worse.

Many on the left are pushing to implement a “rebate” for those seniors who qualify for both Medicare and Medicaid, the so-called “dual eligibles.”

But if drug companies are forced to sell their drugs at below-market prices to some Part D enrollees, the result will be higher prices for everyone else. Such a “rebate” would amount to a new tax on American seniors — and would be especially harmful to those who take multiple medications.

A study by the Lewin Group, a consulting firm, found that monthly Part D premiums for non-dual-eligibles could increase by 25–50 percent if rebates were enacted.

It’s no wonder, then, that 65 percent of likely voters oppose President Obama’s proposed “rebate” in Part D, according to the ACU poll.

Of course, a plan to levy new taxes on Medicare beneficiaries is hardly surprising coming from the Obama administration. Obamacare is teeming with taxes, mandates, and regulations that threaten to throw our already wobbly economy into a tailspin.

Again, as conservatives we certainly had our issues with the creation of Part D, but the program has been successfully run and is now coming in 43 percent under budget.

In turn, the president’s proposed rebate would unravel these successes and savings and just create new problems.

Thanks to America’s aging population combined with Medicare’s flawed funding structure, the program is on the road to fiscal ruin. According to a 2012 report for the Medicare trustees, the program’s trust fund will run dry by 2024.

Voters will have to decide how to address this looming cost crisis. Republicans want to rely on the market forces that have made even the most wasteful government programs more cost-effective. And they have the backing of American voters — four in five of whom support this approach within the drug benefit.

Democrats, meanwhile, are committed to harmful new taxes and reduced services for America’s seniors.

The irony is that while Democrats use phony scare tactics to claim Republicans want to end Medicare, it is the Republicans’ sound fiscal solutions that would save it.

— Al Cardenas is the chairman of the American Conservative Union.

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Obama’s Medicare Cuts Will Affect Benefits

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Question: If you cut funding for benefits, will you then affect persons dependent upon those benefits? Of course you will. Financing directly affects the quantity and quality of the benefits available to the beneficiaries. 

Uniquely in the case of the Medicare program, some folks are laboring mightily to obscure that simple fact; a feverish effort akin to what G. K. Chesterton once described as an elaborate exercise in the “fine art of missing the point.”

Exhibit A: The administration’s practiced defense of its $716 billion in Medicare payment cuts. In his recent debate with Representative Paul Ryan, Vice President Biden said, “We stopped overpaying insurance companies, doctors, and hospitals.” Likewise, in his first debate with Governor Romney, President Obama emphasized that Americans would be “no longer overpaying insurance companies . . . by making sure that we weren’t overpaying providers.” The messaging point: medical professionals and organizations will be cut, not your benefits.

Exhibit B: The labored disjunction between financing and benefits you find in the media. Chelsey Moran of CBS News in a September 12, 2012, report on “misleading Medicare ads,” commenting on the administration’s Medicare payment cuts, flatly declares: “The cuts, however, do not limit access to Medicare recipients, and Mr. Obama’s health care law actually gives more benefits to seniors — including new preventive care benefits and increased prescription drug coverage.” Likewise, John Presta, writing at examiner.com, insisted, “The changes to Medicare does not affect Medicare recipients directly, but rather reduce payments to hospitals, health insurance plans and other providers. It eliminates a program called Medicare Advantage whose costs have gotten out of control and which will be covered by traditional Medicare at a lesser cost.” Jeffrey Bruner, a “fact-checker” writing for The Tennessean said of the $716 billion Medicare payment reductions: “It doesn’t cut any current benefits.” One finds similar declarations in many other media outlets, including Politifact and the Los Angeles Times.

But Obama’s Medicare payment cuts do directly affect Medicare benefits. Take the Medicare Advantage program, a popular system of private health plans, covering 27 percent of all seniors. Per capita spending is indeed higher in Medicare Advantage than traditional Medicare because patients get additional benefits. Cutting Medicare Advantage payments means cutting those benefits. On September 22, 2009, during the Senate Finance Committee’s consideration of the Senate version of the health-care bill, Senator Mike Crapo (R., Idaho) closely questioned Douglas Elmendorf, the director of the Congressional Budget Office (CBO). The topic was the impact of the administration’s proposed cuts on the value of benefits in the Medicare Advantage program:

Senator Crapo: It is my understanding that under your analysis the value of the additional benefits that those in Medicare Advantage receive today would end up being reduced to about $46 a month per member in 2019. And that is a little more but not too much more than just half of what it is today? 

Mr. Elmendorf: My notes say $42 of additional benefits per month in 2019, and I’m told that it’s a little less than half of what we would project under current law.

Senator Crapo: So, approximately half of the additional benefit would be lost to those current Medicare Advantage policy holders?

Mr. Elmendorf: For those who would be enrolled under current law, yes.

Senator Crapo: So, the current plan holders would recognize about half the benefits they see today under the current law?

Mr. Elmendorf: Yeah, that’s right.

Back to the media “watchdogs.” For example, Presta’s account is marred by basic inaccuracies. Notwithstanding his confident assertion that traditional Medicare covers Medicare benefits at lower cost, Medicare Advantage plans overwhelmingly bid below Medicare’s benchmark payment for standard Medicare benefits. Also, in point of fact, the president’s health law does not “eliminate” Medicare Advantage.

But it does severe damage. Medicare Advantage provides a variety of benefits that traditional Medicare does not cover, including protection from catastrophic illness. The Medicare actuary analyzed the payment cuts to Medicare Advantage in 2010 and projected that patient enrollment in the program would be cut in half by 2017. Likewise, independent analysts have confirmed Elmendorf’s initial CBO assessment. Heritage research shows that, by 2017, the value of an enrollee’s Medicare Advantage benefits will decline by an average of $3,714.

The administration’s Medicare payment cuts are also targeted to hospitals, nursing homes, home health agencies, and even hospice programs. Ms. Moran’s confident assertion that Obama’s payment cuts will not “limit access” of Medicare patients is based on precisely nothing. The truth is exactly the opposite. The Medicare actuary in his April 22, 2010, report said that the Medicare payment reductions would “jeopardize” patient access. In his addendum to the 2012 Medicare Trustees Report, the actuary reaffirmed his initial assessment that by 2019 the Medicare Part A payment cuts will cause an estimated 15 percent of these Medicare providers to operate in the red, shift their business away from Medicare, or withdraw from treating Medicare patients altogether. By 2050, the number of these Medicare providers operating in the red would climb to 40 percent under the scheduled cuts. The outlook: Fewer and fewer Medicare providers, reimbursed at bargain-basement Medicaid rates, caring for twice as many retirees, will not “guarantee” your access to Medicare benefits.   

There are lessons here. First, on Medicare especially, double check the media “fact-checkers.” Like the rest of us, they are fallible creatures, struggling with complex material. They also have strong (mostly liberal) views, even if they struggle mightily to repress them for the appearance of journalistic objectivity. Second, use common sense. Try to imagine a liberal media response to conservatives cutting subsidies for school-lunch programs, and defending it by saying they’re just reducing funding for cafeterias (the “providers”), not the kids’ soup and sandwiches.

Bottom line: Your Medicare benefits are not safe from Obamacare, unless your idea of a “guarantee” is a politician’s campaign promise. Good luck with that.   

Will Expanding Medicaid Save States Money?

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It’s not just the political Left that’s pressuring states to adopt the costly Obamacare Medicaid expansion. Hospitals and clinics, too, are leaning on state lawmakers to expand the rolls. Indeed, there have even been recent studies in some states purporting to show that adopting the Medicaid expansion would be a fiscal positive for the state’s budget, supposedly because it would increase state tax revenues and allow cuts to other state health spending.

My colleague Drew Gonshorowski and I have published a short guide for state lawmakers that deconstructs some of the key assumptions underlying projected fiscal benefits.

One of the biggest — and most dubious — assumptions offered up is that expanding Medicaid will let states save money on “supplemental” payments now made to hospitals and clinics for treating the uninsured.

Such savings are doubtful. Hospitals and clinics have a long track record of successfully lobbying to preserve or restore state “supplemental” funding. For example, the 2006 Massachusetts health-reform legislation, which transformed supplemental payments going to “safety net hospitals” into premium support for the low-income uninsured, achieved near-universal coverage. Yet despite that, Massachusetts’s safety-net hospitals successfully lobbied to continue receiving over $200 million a year in supplemental payments from state taxpayers.

Under Obamacare, it is even more implausible to assume states would be able to cut funding for uncompensated care. That’s because any state payment cuts would have to be imposed on top of Obamacare’s federal payment cuts. Obamacare cuts federal Medicaid “Disproportionate Share Hospital” (DSH) funding by $18.1 billion and Medicare DSH funding by $22.1 billion over the years 2014–2020.

Consequently, governors and state legislators should expect their state’s hospitals and clinics to lobby them for more—not less—state funding to replace cuts in federal DSH payments. State lawmakers who want to learn what their state is already spending—in addition to DSH—on supplemental payments should start by consulting a July GAO report entitled Medicaid: States Reported Billions More in Supplemental Payments in Recent Years. They should then dig into their own state budget documents to find out exactly who is getting exactly how much.

State lawmakers who are offered “rosy scenario” fiscal projections for expanding Medicaid would be well advised to think twice.

Edmund F. Haislmaier is a Senior Research Fellow in the Heritage Foundation’s Center for Health Policy Studies.

Medicare Coupons, Strokes, and Heart Attacks

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Those who favor reforming the giant Medicare program must explain themselves carefully. But opponents of Medicare reform can just manufacture and spread around some fantastic fictions. Consider a couple of real screamers:   

You’ll buy your health insurance with coupons! Vice President Joseph Biden described the Medicare defined-contribution proposal championed by Representative Paul Ryan (R., Wis.), as “Vouchercare.” Now, vouchers are forms, certificates, or coupons redeemable at cash value for the purchase of a good or service. You can’t have a voucher program without vouchers. Right? And vouchers are scary. So, opponents of reform bet that their success in scary “messaging” is dependent upon leaving millions of frightened Baby Boomers with the impression that they will be left alone with a little piece of paper to negotiate with big bad insurance companies. On September 5, 2012, addressing the Democratic National Convention and millions of television viewers, Cristina Saralegui, a television host, said that Governor Romney would turn Medicare from a “guarantee” into a “book of coupons.” Brian Francisco, writing for the September 17, 2012, edition of The Journal Gazette, reports that Indiana congressman Joseph Donnelly won’t stand for giving hapless Baby Boomers “coupons” to buy private health plans. In that nightmarish future, according to Donnelly, the government would say, “Here’s a coupon — hope your coupon works.In fact, there is no Medicare reform proposal, including Ryan’s, that would give future seniors coupons to buy their health insurance. Ryan’s defined-contribution system, for example, is modeled on the financing of Medicare Part D. In trying to sell the liberals’ Medicare “coupon” gimmick, Donnelly is peddling pure nonsense.

You’ll get a stroke choosing a health plan! Sylvia Lang, writing for the September 11, 2012, edition of Redding.Com, worries that in 2023, people younger than 55 years of age will be “sold” to the “profit lusting” insurance wolves. She says that Ryan’s Medicare proposal would operate like an unreformed individual insurance market, where persons can be rejected for coverage because of preexisting conditions or charged exorbitant premiums based on their health status. Except — it won’t. In all Medicare reform plans, including the Ryan plan, all health plans would be governed by Medicare’s traditional insurance rules, meaning that plans must offer you coverage and can’t reject you or drop you if you are sick. Likewise, health plans would get additional funding to cover the costs of older and sicker enrollees. But why let plain facts get in the way of a good, old-fashioned demagogic rant? Lang writes, “God help anyone in their 70s, 80s or 90s who has to deal with private insurers. Will Ryan take responsibility for the strokes and cardiac arrests that ensue?”

Well, millions of seniors must be recovering from the strokes and heart attacks caused by the life-threatening stress of enrolling in the plans they like. In fact, 90 percent of Medicare patients — including those in their 70s, 80s, and 90s — already are enrolled in a variety of private plans for their drug coverage. There are over 1,100 drug plans offered in 34 regions around the country. Even more shocking, roughly 27 percent of all seniors are enrolled in integrated private plans through Medicare Advantage. In Medicare Advantage plans, seniors routinely enjoy richer medical benefits, including care coordination and disease management, as well as protection from catastrophic out-of-pocket costs; benefits superior to traditional Medicare. Enrollees in private plans, including the poor and the disabled, report high rates of satisfaction, and recent research confirms that the quality of care for Medicare Advantage enrollees is superior to care received by enrollees in traditional Medicare. But, too bad, Ms. Lang wants to “get rid” of those plans. Ms Lang not only wants to take away seniors’ right to keep Medicare Advantage plans they have today, but she wants to stop seniors from choosing better private plans tomorrow. Notwithstanding the president’s promise to all the “little people” who want to keep their health plans, Ms. Lang knows what’s best for them.

The Medicare misinformation machine is spinning overtime. As President Ronald Reagan once said, “Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.”  

Debunking Bill Clinton’s Medicare Claims

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When former president Bill Clinton’s good, he’s very, very good. That formidable rhetorical skill was on display in his defense of Obama’s Medicare policy at the Democratic National Convention. Though Obama needs help, much of what Clinton said was flat out wrong. Consider just two examples.

1. On the ten-year $716 billion in “savings” from Obama’s Medicare payment cuts, Clinton insisted: “There were no cuts to benefits at all, none.” Very Clintonesque: technically correct, and thoroughly misleading. In fact, President Obama and his allies in Congress cut the funding for Medicare benefits, which directly affects Medicare patients dependent on the funding of those benefits. By 2019, the Medicare actuary estimates that 15 percent of the affected providers will become unprofitable, and that number reaches 40 percent by 2050. As Medicare payments dip below the cost of Medicare services, medical professionals and institutions will withdraw from or cut back on providing Medicare services, guaranteeing serious problems for seniors trying to access those benefits. The Medicare actuary says that the cuts will “jeopardize” seniors’ access to care.

2. On Obama’s alleged contribution to the solvency of the Medicare (HI) Trust Fund, Clinton said: “And instead of raiding Medicare, he used the savings to close the donut hole in the Medicare drug program.” Recall that President Obama said he would not sign a health bill adding a “dime” to the deficit. So, the “savings” from the big Medicare payment cuts could be used to either shore up the Medicare trust fund or finance other provisions of Obamacare, such as the new entitlement expansions, thus keeping the bill deficit-neutral. Not both. In a December 23, 2009, memo on the Senate version of the bill, which eventually became law, CBO clarified the situation: “The key point is that the savings to the HI Trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.” 

So, what’s really happening? In a January 22, 2010, letter to Senator Jeff Sessions (R., Ala.), ranking member of the Senate Budget Committee, CBO Director Douglas Elmendorf reported that “The majority of the HI trust fund savings under PPACA would be used to pay for other spending and therefore would not enhance the ability of the government to pay for future Medicare benefits” (emphasis mine). Whatever else it does, that “other spending” doesn’t strengthen Medicare.

Oh, and about filling up that “donut hole. It is a congressionally created gap in drug coverage, where beneficiaries pay 100 percent of the costs up to a catastrophic threshold; a bizarre benefit designed to offset drug costs in Bush’s 2003 entitlement expansion. What Clinton did not say is that Obamacare reduces Medicare spending by $716 billion after taking into account the relatively few provisions of the law — like filling the “donut hole” — that increase Medicare spending. So, no; none of the $716 billion is used to close the “donut hole.”      

One more thing: Clinton noted that the $716 billion in “savings” is also assumed in Ryan’s proposed budget: “You got to give him one thing: It takes some brass to attack a guy for doing what you did.” But Ryan doesn’t propose to do what Obama did. Obama is just doing what Clinton tried and failed to do. In 1993, Clinton wanted to take $189 billion from Medicare and Medicaid (over the period 1994–2000) to finance the ill-fated Clinton Health Plan. Repealing Obamacare, as Ryan proposes, would end Obamacare’s spending and thus the use of Medicare “savings” to cover that spending. In Ryan’s plan, Medicare savings are for Medicare.  

Nobody beats Bill for brass.  

 — Robert Moffit is a Senior Fellow at the Heritage Foundation’s Center for Policy Innovation. 

Obamacare: It’s Still a Gateway to Single-Payer Health Care

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More than two years after the passage of Obamacare, the data overwhelmingly show the law will fail to achieve its core objectives of lowering costs and improving access. That, ironically, may have been the design. By making private insurance unaffordable for everyone, it will become available to no one. All that will be left is government-centered, government-run, single-payer health care.

Let’s look at the law’s promises that were rigged to fail.

First, supporters of the law said the law would bend the cost curve down and reduce health-insurance costs. Yet health-insurance premiums are increasing faster than before the law was passed and experts confirm costs will increase along with federal health spending.

Second, defenders of the law said the bill would massively extend health-insurance coverage. But in June the Supreme Court threw out the forced Medicaid expansion which the Congressional Budget Office originally estimated was responsible for half of new coverage under the law. And despite claims of increasing coverage, more Americans are without health coverage today than when President Obama took office.

Third, supporters claimed the law would reduce the deficit. Yet, none of the law’s gimmicks has managed to hide its true costs. One gimmick was omitting a $300 billion payment to doctors who care for seniors on Medicare. Another illusion was the promise of $70 billion in savings — half of the bill’s projected deficit reduction in the first decade — from a now-defunct long-term care program. The Congressional Budget Office’s most recent analysis shows the law is jammed with $1 trillion in tax hikes and will spend more than $1.7 trillion over the next decade.

Fourth, and most important, the law’s individual mandate was rigged to fail. Unless the law is repealed, in 2014, the new individual-mandate tax will effectively force all Americans to buy insurance. Health-insurance companies will be forced to offer coverage to virtually every American, regardless of their pre-existing condition or health status. Employers will be penalized if they do not offer health coverage. The problem is this approach will never work, which the lawmakers who backed the “public option” knew full well.

According to analysis by the Congressional Research Service, the IRS does not have the authority to enforce the individual-mandate tax. Moreover, because the tax penalty is far less than the price of purchasing health coverage and insurers are forced to cover Americans at any time, millions will choose to pay the tax and only sign up for coverage when they get sick. 

As a result, insurers will be left paying for people who are comparably older and sicker than the general population. The result is a classic death spiral where the costs of covering the insured skyrocket, discouraging even more people from buying insurance. States that have tried similar approaches have seen their costs skyrocket.

At the same time, employers will make a similar economic decision, choosing to pay a $2,000 penalty per worker, instead of paying four to ten times that for a worker’s health coverage.  As former Democrat Governor Phil Bredesen said, when employers do the math, dropping workers’ coverage “will make good financial sense.”

Many workers who are not offered coverage through their employer will be eligible for federal subsidies to buy government-approved insurance through insurance exchanges.  If workers seek health coverage through the exchange, the costs of the subsidies to taxpayers will skyrocket – likely by hundreds of billions of dollars. Yet, if workers chose to simply pay the mandate tax and go without insurance, health insurance costs will climb still further.

The scenario outlined above is not speculation but is a forecast based on current trends described by nonpartisan experts.

Taxpayers should remember that liberal Democrats — who have made “catching up with Europe” and imposing a single-payer, government-run health system on America their life’s mission — celebrated the law’s passage for a reason. For them, it was a win-win outcome. Either the law would succeed and expand government’s role in health care, contrary to their own understanding of how market-economies work, or it would fail and pave the way for single-payer health care in a politically feasible way. If the private insurance market crumbled, government could mount a rescue operation and “save” patients.

Thankfully, that future is not yet written. Lawmakers who believe patients and doctors, not politicians, should manage our health-care system have plenty of ideas on how to repeal and replace Obamacare. What we need, however, is for the American people to see the urgency of the problem and replace not just the law but the politicians who put it in place. 

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That Terrifying Medicare Voucher Threat

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Vice President Joe Biden warned you: If you are 54 years of age or younger, be afraid. Be very afraid. If conservatives and misguided centrists have their way, in your old age, when you are frail and vulnerable, you could end up with a Medicare “voucher.” Recently, Representative Kathy Hochul (D., N.Y.) told an audience of senior citizens exactly what to expect: “You are now going to have a voucher and you can go out and negotiate with insurance companies on your own. . . . I heard that and said: No way.”

Yes, no way. There is no major Medicare reform proposal, including the Ryan proposal, that would issue future senior citizens a voucher (a certificate or coupon or a check for a fixed dollar amount) and then force them to fend for themselves — on their own – in negotiating with health-insurance companies who will, as Florida congresswoman Debbie Wasserman-Schultz also insists, “cherry pick” the healthy and drop or deny coverage to the sick.

It’s all scary nonsense. The Ryan proposal, among others, is a defined-contribution system that in, say, 2023 would provide direct payment from a government account to a health plan of a person’s choice, including traditional Medicare; health plans, including employer-based retiree plans, would have to meet government standards, including benefit standards of the traditional Medicare program, plus new and much-needed protections against the costs of catastrophic illness; all such plans would be offered through a Medicare exchange; all such plans would be governed by existing Medicare insurance rules, meaning persons could not be legally denied coverage or dropped merely because they are sick; low-income persons would be specially protected from unforeseen out-of-pocket cost hikes; and all enrollees would benefit from an improved risk adjustment among plans in the competitive market to guarantee continuity of patient care and health-plan stability.

A voucher is, of course, a defined contribution; but not all defined contribution programs are “vouchers.” A voucher is just one form of defined contribution. The Merriam Webster definition of a voucher is a “form or check indicating a credit against future purchases or expenditures.” Many ordinary Americans have had some experience with vouchers when their flights were cancelled or delayed, and airlines issued them compensatory certificates redeemable in cash value for the purchase of food and lodging.

If liberals want to label Ryan’s Medicare proposal a “voucher,” as Representative Hochul insists, then logically they must also apply that term to huge chunks of today’s health-care system: the private plans in Medicare Advantage, which cover 27 percent of today’s beneficiaries; the 1100 plans in the Medicare drug program, which cover 60 percent of today’s beneficiaries; the hundreds of plans in the Federal Employees Health Benefits Program(FEHBP), which cover roughly 8 million active and retired federal employees and their families, as well as the defined contributions for stocks, bonds, and equity funds in employer-based pension programs. Worse, “vouchers” will fund Obamacare’s insurance exchanges in 2014.

Meanwhile, liberals in Congress need to break the terrifying news to the vast majority of retirees around the country that they are in some form of “voucher” system already. They just don’t know it.

— Robert Moffit is a Senior Fellow at the Heritage Foundation’s Center for Policy Innovation. 

CAP Action Dowdifies CBO Medicare Report

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A Harvard economics professor has made a strange claim about a 2006 Congressional Budget Office report on Medicare premium support. Writing for the Center for American Progress Action Fund, a liberal lobbying organization, Dr. David Cutler and his co-authors assert that “CBO concludes that premium-support plans would achieve much of their federal savings from ‘increases in the premiums paid by beneficiaries, not from increases in the efficiency of health care delivery.’” This would be a strong negative finding indeed. But that is not, in fact, what CBO concluded. 

The quote is lifted from a paragraph in which the CBO outlines why opponents dislike premium-support reform. The full sentence, found on the first page reads, “Opponents also maintain that much of the federal savings from premium support would come from increases in the premiums paid by beneficiaries, not from increases in the efficiency of health care delivery.” In other words, Dr. Cutler — a foe of premium support — is presenting his viewpoint, but labeling it as a CBO conclusion.

This is unfortunate. Using this new methodology and citing the same report, one could just as easily say that CBO concludes that premium support would “lead to a more efficient Medicare program, one in which the government and beneficiaries received more for the money that is spent on Medicare, whatever that level of spending might be, than they do today.”

In fact, CBO drew very few conclusions in its 2006 report. It did, however, present one very important conclusion: that premium support, based on a process of competitive bidding, would save substantial money for taxpayers. The most money would be saved with the federal share of Medicare based on the lowest competitive bid. CBO found that much of this savings would be from the high-cost areas of traditional Medicare. 

Medicare is a complex policy issue, and clarifying the policy options in a fashion that is understandable to the general public is the right thing to do. It is unfortunate that Dr. Cutler and his co-authors chose to misrepresent the CBO conclusions.

— Rea Hederman is assistant director of The Heritage Foundation’s Center for Data Analysis.

The New Resident Duty Hours Fail

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A year ago, the Accreditation Council for Graduate Medical Education (ACGME) changed the rules governing the schedules of medical residents. The new work hours were intended to curb resident fatigue, which the Institute of Medicine (IOM) had previously concluded was contributing to medical errors and accidents. But the new duty hours have actually exacerbated fatigue, jeopardized resident education, and endangered patient care at our nation’s teaching hospitals.

Up until the current guidelines took effect in July of 2011, medical residents could work up to 80 hours per week and 30 hours continuously. The new rules, while maintaining the 80-hour schedule, have limited the maximum shift for first-year residents to 16 hours. Senior residents may work 28 hours straight.

Research published in the New England Journal of Medicine highlights that these mandates have failed to achieve what they were intended to. The study’s authors contacted every institution in the country that sponsors an ACGME-accredited residency program, and ultimately 6,202 residents at 123 different institutions completed a twelve-question survey. Of those surveyed, 43 percent indicated that resident work schedules had actually worsened, and 50 percent said that quality of life for senior residents had deteriorated, compared with 30 and 14 percent, respectively, who noted improvement in these areas. Forty-one percent of residents believed that the new guidelines have worsened their education, while only 16 percent believed the changes have benefited resident learning. The survey also indicated that some residents were concerned that patient care was suffering. Overall, 48 percent of residents disapproved of the changes, with only 23 percent approving.

At first blush, these findings may seem counterintuitive, but upon closer inspection, they make perfect sense. Residency programs still have the same number of workers with the same collective responsibilities, but the first-year residents are more limited in the shifts they may work. Consequently, second-year residents and above are increasingly given the most grueling schedules.

Before the changes went into effect, the first year of residency was very physically demanding — but as residents entered senior roles and took on more responsibility, the physical burden subsided in exchange for the intellectual challenge of managing sick patients with complicated problems. The reduction in physical stress granted the senior house staff time to think, read, and learn from patients.

The new duty hours have turned this commonsense approach to residency on its head. Now the residents with the most clinical responsibility are also the most physically taxed. As a result of the new work-hour mandates, senior residents are substantially more fatigued and have significantly less time and energy to read and learn from their patients. This does not just hurt the quality of resident training. It’s actually dangerous.

Medical residents currently care for the sickest and poorest patients. These mandates are impeding their ability to offer the best care. And by compromising the education and training of young doctors, these duty hours could jeopardize the quality of medical treatments provided to all patients.

The goal of these new regulations was to improve patient care, education, and quality of life for residents. As a resident working under this new regimen, I know that it has substantially missed the mark on all three parameters. The ACGME should revert to the old work-hour structure until a more practical and sustainable solution can be reached. If it fails to take the initiative to do this, then Congress and the Department of Health and Human Services should consider stepping in.

Resident fatigue is a real problem — patients should be protected from tired, overworked residents. But the ACGME’s cure is worse than the disease.

— Jason D. Fodeman, M.D., is an internal-medicine resident and a senior fellow in health-care studies at the Pacific Research Institute.

© National Review Online 2012
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