I blog about free markets in medical care and transparent pricing.
I received an interview request from a local television station recently, asking for my response to this article. The article from the Associated Press deserves some comment. First I must mention that the report, issued by the “Institute of Medicine,” an arm of the “National Academy of Sciences” is reported as an independent organization that advises the government. I guess they’re independent unless you call 85% federal funding an impediment to their independence. Virtually all of the rest comes from state governments.
Remember “whose bread I eat his song I’ll sing.” This report lays the groundwork for physician pay cuts, in line with what the current administration has in mind with their Independent (there’s that word again!) Payment Advisory Board (IPAB). At the top of the list of waste were “unnecessary services.” Also on the list were “inflated prices” “prevention failures” and “fraud.” Any or all of these claims could be used against physicians and will be, I predict. After all, who is going to challenge the “National Academy of Sciences,” this “independent” bunch of objective “scientists?”
This group, by the way, has been paid well by the federal government to find that global warming should allow governments to tax us more. Shocking.
Actually, the report is partially correct. While the report claims that 30 cents of every dollar is wasted, I believe this is probably too low. We perform surgeries for 1/6 to 1/10 that charged across town at a “not for profit” hospital. The fees we have listed on our website are half what Medicare pays the same hospital across town for the same surgery. You are being told that Medicare is going broke while surgical care at half the amount Medicare is paying is present in the same city! That’s 50% savings not 30% using my math.
Guess what they don’t mention in their report? Claims repricing and the disproportionate share hospital program, better known to readers of this blog as the uncompensated care scheme. While they do mention “excess administrative costs,” I don’t think they are targeting the multi-million dollar hospital administrators here.
They do mention unnecessary colonoscopies. At $600 each, how do you think this compares to the multi billion dollar repricing scheme? Or the uncompensated care scheme, the continuance of which is certain, even after everyone has been mandated to have insurance!
The report stresses “leveraging technology” and “improving coordination.” This is a justification for the swindle the Health Information Technology industry has pulled off in this country, basically giving them cover. There is a limited market for electronic medical record technology, but the government shoved it down everyone’s throat, threatening anyone who didn’t buy this technology with severe Medicare pay cuts. How would you like to produce a product the purchase of which was mandated by the federal government? Sound like a money maker?
The most ominous part of their report, however, is “payment reforms to reward quality results.” This “pay for performance” guarantees that the sickest patients, those most likely to have poor outcomes in spite of the best care, will be shunned by medical professionals, operating under the threat of pay cuts if these patients don’t do well. You naysayers out there are screaming, “there will be adjustments for severity of illness!” You keep thinking that. Keep believing that and all the other promises made to physicians by government bureaucrats.
There is a solution. We must, however, first recognize the problem. Wherever government exists, the free market is crowded out if not completely eliminated. Government operations are characterized by waste, fraud and corruption. Health care, to the extent the free market has been shoved aside by Uncle Sam, is characterized by waste, fraud and corruption. The idea that the government has any solution to health care other than to remove itself from the equation is ludicrous in my opinion. The report from the Institute for Medicine simply gives cover to even more government intrusion. We shouldn’t be surprised by their findings and recommendations when we think about the source of the report’s funding.
G. Keith Smith, M.D.