Plan rewards physicians for scrimping on treatment
By Dr. Richard A. Armstrong –
Tuesday, February 14, 2012
EXCERPT FROM THIS ARTICLE: The law promotes a “new” model, the Accountable Care Organization (ACO), in which an entity that covers a specified number of Medicare patients is given a fixed pot of money. This is quite similar to the HMO capitation systems that caused tremendous backlash in the early 1990s. In both, if the doctors can provide care for less than what is in the pot over a defined period, they get to share the leftovers. If, however, the doctors overspend the pot, they are financially liable for the consequences. With sleight of hand and fanciful re-packaging, Dr. Emanuel attempts to convince physicians that this gallows for private practice somehow improves and enhances autonomy. Nice try, but doctors have been fooled once, which is quite enough
If you haven’t noticed it yet, you soon will. The Obama administration has launch-ed a full-court press to sell the president’s “signature” achievement, Obamacare, or the Affordable Care Act, to the American public as well as to the 800,000 American physicians it directly impacts.
As one of those doctors, it was no surprise when an article in the Journal of the American Medical Association by lead author Dr. Ezekiel Emanuel attempted to convince American physicians that they will enjoy expanded autonomy and greater liberty under the new act.
Dr. Emanuel helped create the 2,700-page law and has now been enlisted to sell it. As a bioethicist of considerable acclaim, Dr. Emanuel goes to great lengths to establish his case, maintaining that with new payment models promoted by the law, doctors will be in a position to free themselves from the fee-for-service system that he and others have worked to vilify in the physician-patient relationship. What he misses entirely is that it’s the opaque economic arrangement caused by our third-party payment systems, not the honest exchange of payment for a service that is the root cause of the soaring costs in American health care today. (more…)
The British medical journal Lancet reported last month that 32% of elderly American patients undergo surgery in the year before they die, a statistic culled from Medicare data. In an accompanying editorial, Dr. Amy Kelley of Mount Sinai School of Medicine labeled the 32% figure a “call to action”—to reduce costly surgeries, intensive-care stays and other high-intensity care for the elderly. Her call was parroted in hundreds of media outlets nationwide. But advocates for limiting health-care spending on the elderly are distorting science to make their argument.
Don’t be bamboozled: The Lancet investigators looked only at patients who died, making surgery appear unsuccessful. That’s like saying Babe Ruth struck out 1,333 times so he must have been a poor ball player—even though he had a .342 lifetime batting average and 714 home runs. Investigators should have considered how all surgery patients fared, including those who recovered, returned home from the hospital and resumed active lives.
Valid data show that surgeries on older patients are successful. A 2003 study in the Journal of the American College of Cardiology followed 220 patients age 65 and older who underwent heart-valve surgery. The study concluded that “age does not appear to limit the health related quality of life benefits” of surgery. Even patients over 75 had symptom relief and improvements in quality of life “on a par with improvements seen in younger patients.” (more…)
BY CHARLES KRAUTHAMMER – Washington Post Writers Group
WASHINGTON The Great Social Security Debate, Proposition 1: Of course it’s a Ponzi scheme.
In a Ponzi scheme, the people who invest early get their money out with dividends. But these dividends don’t come from any profitable or productive activity – they consist entirely of money paid in by later participants.
This cannot go on forever because at some point there just aren’t enough new investors to support the earlier entrants. Word gets around that there are no profits, just money transferred from new to old. The merry-go-round stops, the scheme collapses and the investors lose everything.
Now, Social Security is a pay-as-you-go program. A current beneficiary isn’t receiving the money she paid in years ago. That money is gone. It went to her parents’ Social Security check. The money in her check is coming from her son’s FICA tax today – i.e., her “investment” was paid out years ago to earlier entrants in the system and her current benefits are coming from the “investment” of the new entrants into the system. Pay-as-you-go is the definition of a Ponzi scheme. (more…)
President Barack Obama address the American Medical Association during their annual meeting in Chicago, Monday, June 15, 2009 where he vowed, “No matter how we reform health care, we will keep this promise to the American people…If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.” (AP Photo/Charles Rex Arbogast)
In June 2009, as he fought to pass the Democrats’ national health care bill, President Obama made a clear, unequivocal pledge. “No matter how we reform health care, we will keep this promise to the American people,” Obama said. “If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”
Spoken with great confidence, Obama’s words were meant to reassure, and it’s possible many Americans believed them. But at the same time, the president and his Democratic allies in Congress built the new health care law on provisions that, when acting together, guarantee that some people — perhaps many people — won’t be able to keep their health care plans.
On the one hand, the new law orders the establishment of health care “exchanges” through which anyone can purchase government-subsidized coverage. On the other hand, the law levies fines on employers who fail to offer coverage to their employees — but sets the fine far below the cost of coverage. In 2010, the average employer paid $4,150 to cover a single employee and $9,773 for family coverage. (Both figures are about double what they were in 2000.) The new law sets fines for employers who don’t cover their workers at $2,000.
So when it takes effect in 2014, the law will give employers a choice: Continue to offer increasingly expensive health coverage, or pay a relatively small fine, save a lot of money, and let employees buy their own subsidized coverage on the exchange. The incentive seems pretty clear. (more…)
The utter failure of QE2, hollow Congressional spending “cuts” that will keep the National Debt on track towards $23 trillion by 2021, S&P downgrade and recent plunge in the stock market are the first cracks in the façade of the great American Empire.
“A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.” – Ron Paul
I wonder what goes through Ben Bernanke’s mind as he sits in his gold plated boardroom in the majestic Marriner Eccles building in Washington DC and decides to impoverish grandmothers in order to further enrich Wall Street bankers. He just pledged to keep interest rates at zero percent for two more years. Ben is a supposedly book smart man. Does he have no guilt or shame for what he has wrought? How does he sleep at night knowing he has created bloody revolutions around the globe due to his inflationary zero interest policy? People are dying because he has decided that an elite group of Wall Street bankers who recklessly brought down the worldwide financial system in 2008 deserve to be kept alive and enriched at the expense of the many. (more…)
By Charles Krauthammer – Washington Post Writers Group
Published in: Other Views
August 6, 2011
WASHINGTON Conventional wisdom holds that the congressional super-committee established by the debt-ceiling deal to propose further deficit reduction will go nowhere. I’m not so sure. There is a grand compromise to be had. It does, however, require precise sequencing. To succeed it must proceed in three stages:
1 Tax Reform. True tax reform that removes loopholes while lowering tax rates is the Holy Grail of social policy. It appeals equally to left and right because, almost uniquely, it promotes both economic efficiency and fairness. Economic efficiency – because it removes tax dodges that distort capital flows (and thereby diminish productivity) while cutting marginal tax rates (thereby spurring growth). Fairness – because a corrupted tax code with myriad breaks grants deeply unfair advantage to the rich who buy the lobbyists who create the loopholes and buy the lawyers who exploit them.
Which is why the 1986 Reagan-Bradley tax reform was such a historic success. It satisfied left and right, promoted efficiency and fairness, and helped launch two decades of almost uninterrupted economic expansion.
But didn’t that agreement take years to hammer out? Yes. Today, however, the elements are already laid out by the Simpson-Bowles commission. The super-committee doesn’t have to reinvent the wheel. It simply has to make choices.
Many on the left still blame Ronald Reagan, but the debt increase in the 1980s financed a robust economic expansion and victory in the Cold War. Debt held by the public at the end of the Reagan years was much lower as a share of GDP (41% in 1988 and still only 40.3% in 2008) compared to the estimated 72% in fiscal 2011. That Cold War victory made possible the peace dividend that allowed Bill Clinton to balance the budget in the 1990s by cutting defense spending to 3% of GDP from nearly 6% in 1988.
Even without a debt default, it looks increasingly possible that the world’s credit rating agencies will soon downgrade U.S. debt from the AAA standing it has enjoyed for decades.
A downgrade isn’t catastrophic because global financial markets decide the creditworthiness of U.S. securities, not Moody’s and Standard & Poor’s. The good news is that investors still regard Treasury bonds, which carry the full faith and credit of the U.S. government, as a near zero-risk investment. But a downgrade will raise the cost of credit, especially for states and institutions whose debt is pegged to Treasurys. Above all a downgrade is a symbol of fiscal mismanagement and an omen of worse to come if we continue the same habits.
President Obama will deserve much of the blame for the spending blowout of his first two years (see the nearby chart). But the origins of this downgrade go back decades, and so this is a good time to review the policies that brought us to this sad chapter and $14.3 trillion of debt.
With former President Truman at his side, LBJ signs the Medicare bill into law, July 30, 1965.
FDR began the entitlement era with the New Deal and Social Security, but for decades it remained relatively limited. Spending fell dramatically after the end of World War II and the U.S. debt burden fell rapidly from 100% of GDP. That changed in the mid-1960s with LBJ’s Great Society and the dawn of the health-care state. Medicare and Medicaid were launched in 1965 with fairy tale estimates of future costs.
Medicare, the program for the elderly, was supposed to cost $12 billion by 1990 but instead spent $110 billion. The costs of Medicaid, the program for the poor, have exploded as politicians like California Democrat Henry Waxman expanded eligibility and coverage. In inflation-adjusted dollars, Medicaid cost $4 billion in 1966, $41 billion in 1986 and $243 billion last year. Rather than bending the cost curve down, the government as third-party payer led to a medical price spiral.
Republican Senate leader Mitch McConnell said yesterday he’s concluded that no deal to raise the debt ceiling in return for serious spending restraint is possible with President Obama, and who can blame him? We’ve never thought the debt ceiling was the best leverage for a showdown over the entitlement state, and now it looks like Mr. Obama is trying to use it as a way to blame the GOP for the lousy economy.
This may have been the President’s strategy all along: Take the debt-limit talks behind closed doors, make major spending cuts seem possible in the early days, but then hammer Republicans publicly as the deadline nears for refusing to raise taxes on business and “the rich.”
This would explain the President’s newly discovered fondness for press conferences, which he has rarely held but now rolls out before negotiating sessions. It would also explain why Mr. Obama’s tax demands have escalated as the August 2 deadline nears. Yesterday he played the Grandma Card, telling CBS that seniors may not get their August retirement checks. Next he’ll send home the food inspectors and stop paying the troops.
The reality is that Mr. Obama is trying to present Republicans with a Hobson’s choice: Either repudiate their campaign pledge by raising taxes, or take the blame for any economic turmoil and government shutdown as the U.S. nears a debt default. In the former case Mr. Obama takes the tax issue off the table and demoralizes the tea party for 2012, and in the latter he makes Republicans share the blame for 9.2% unemployment.
This is the political context in which to understand Mr. McConnell’s proposal yesterday to force Mr. Obama to take ownership of any debt-limit increase. If the President still insists on a tax increase, then Republicans will walk away from the talks.
Mr. McConnell would then let the President propose three debt-limit increases adding up to $2.5 trillion over the coming months. Senate Republicans (with Majority Leader Harry Reid’s cooperation) would use a convoluted procedure to vote for three resolutions of disapproval on the bills. Mr. Obama could veto the resolutions and 34 Democrats could vote to sustain. The President would get his debt-limit increase, but without Republicans serving as his political wingmen.
Americans generally agree that our economic future depends on nurturing new ideas. “The first step in winning the future,” as President Obama said in his 2011 State of the Union speech, “is encouraging American innovation.” Unfortunately, the actions of the administration and the proposals of some in Congress may significantly impede innovation in my industry—biopharmaceuticals—for the foreseeable future.
Life-science companies today are among America’s premier innovators. Six of the top 10 companies in global research and development expenditures are biopharmaceutical, according to a 2010 report by Booz & Co. American drug companies reinvest more than 20% of their U.S. sales revenues in research. As recently as 2008, more than 67% of all U.S. biopharmaceutical patents were issued to U.S.-based life-science companies.
The industry is also a major employer. Merck, the company I manage, has over 40,000 people on its payroll in the U.S. And while overall pharmaceutical employment here has shrunk in recent years, it still tops 650,000. These are high-quality jobs, with an average salary of more than $95,000. Biopharmaceutical research is skilled and labor-intensive.
The biopharmaceutical industry’s scientists have produced a global revolution in health care. Medicines and vaccines created and produced by Merck treat patients in more than 140 countries. Among these are Victrelis, approved by the Food and Drug Administration this year as the first new drug in a decade to treat Hepatitis C; and Isentress, which has helped change HIV from a certain killer to a manageable chronic disease.
The United States can rightly claim the title of medicine chest to the world. Almost two-thirds of research on new medicines approved in the last 10 years was performed in this country. Today, the U.S. accounts for 82% of the biotechnology research and development in the world and has over 2,900 medicines in the pipeline. U.S. biopharmaceutical exports rose to $46 billion in 2009 from $29 billion in 2005.
But American leadership in pharmaceuticals and biotechnology is now threatened. That means the future health of Americans is threatened. (more…)
In June 2009, as he fought to pass the Democrats’ national health care bill, President Obama made a clear, unequivocal pledge. “No matter how we reform health care, we will keep this promise to the American people,” Obama said. “If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”
