I blog about free markets in medical care and transparent pricing.
In the interest of brevity, I gave an answer to Joel White’s question that was correct but incomplete and would like to clarify what I said on the video of my remarks to the Coalition for Affordable Health Coverage.
At the end of the meeting he asked me what cost-cutting incentive 30 million newly insured people would have without any cost accountability on their end, that is, no “skin in the game.” I said they would have none. I said that if the perceived price was zero, there was no limit to the demand, and overall costs would go through the roof. Well…sort of. I left an important piece out.
IPAB. Independent payment advisory board. You see, this is the price control arm of the Unaffordable Care Act. Just when you think the folks that came up with this national health care plan are a bunch of idiots, you begin to realize that they know exactly what they are doing. Not ignorant. Just evil and corrupt. Here’s how the IPAB will work. Think of it as a car brake. As the government runs out of health care money because the demand for services (perceived as free) outstrips supply, IPAB will apply pressure to the brake. The fees paid to physicians will drop so low that no doctor will do the targeted surgery or procedure again. Too many heart surgeries? Pay the cardiac surgeon half what he was paid last month. Too many brain surgeries? You get the idea.
I know this because this has already happened. I did my last cardiac anesthetic in 1994, a 6 hour procedure involving multiple attempts to get the patient off of the bypass machine. I was paid $294. I didn’t do any more cardiac anesthetics. I stopped accepting Medicare altogether shortly thereafter, partly because the payment I received for a total knee replacement was $78.
Price controls cause shortages. That is exactly what the engineers of IPAB had in mind. Deliberate shortages. The beauty of this mechanism is that it makes the doctor look like the bad guy, a tried and true political technique. Politicians always surround themselves with folks whose sole purpose is to take the fall for them.
If the IPAB brakes fail, there’s always the FDA, the government’s arm of the pharmaceutical industry. The difficulty medical facilities have had obtaining drugs of various kinds that we’ve seen recently, might just be a warmup. Without certain drugs, surgeries are simply not going to happen. Without certain drugs, people’s cancers will go untreated. It will be more difficult to blame this on the pharmaceutical industry, but I have no doubt that will be the strategy, all the while having agreed in the usual back room way, to maintain the profitability of the drug companies at all costs.
Like Canadians, all Americans will be able to say they have health insurance. Like Canadians, this will represent nothing more than a guaranteed place in line, with little or no care at the end of the wait. Various tolls and turnstyles will be put in place to make sure that the system isn’t overwhelmed, nevermind what rage results.
Just thought I needed to clarify the answer given on the video.
G. Keith Smith, M.D.