Friday, July 20, 2012

Government and Health Care ... Who Controls? Who Decides? Who Pays?

The trend is clear. Government's involvement and control of our indiviudal and nation's health care gets bigger by the day. If the present trend continues, that means doctors and other health care workers will soon answer even more to Uncle Sam.

The facts about government's growing involvement and direction of American health care are described in Doctor Pay and Social Priorities:

" . . . a substantial number of the authors and champions of the Affordable Care Act believe that physicians pad their incomes with unnecessary services, administer unnecessary tests to shield themselves from malpractice risk, and too frequently double dip by making themselves into proprietors of businesses like MRI centers to which they can profitably refer their patients.

Consequently, health-care reformers have floated a variety of schemes for re-engineering physician compensation. The schemes have names like "bundled payment" and "capitation" and "accountable care." All have been advocated on the premise of promoting greater cost effectiveness and less conflict of interest. At their core, though, they are intended to prevent doctors from exploiting the long-standing "fee-for-service" system by what they claim to be self-serving or self-protective overtreatment.

Instead, physicians would—in theory—see their incomes enhanced by promoting the health of their patients. The healthier the patient, the more money left for the doctor. One can well imagine, though, how trial lawyers would respond if these anti-fee-for-service plans were widely implemented. They would assail doctors before sympathetic juries with claims that physicians withheld treatments from patients in the name of cost-effectiveness and self-interest.

Proposals for transforming compensation for physicians expose a peculiar difference between business- and medical-school graduates. MBAs can readily skate past even fairly egregious business misjudgments and misdeeds. An M.D. must bear the tangible cost of malpractice insurance, a very considerable one in such specialties as surgery and obstetrics. If a physician is tagged, fairly or even unfairly, with above-average professional failings, his insurance premiums skyrocket. Unlike the investment banker who presides over a major bungle, he may even lose the license to practice....

And in the distant past, neither was it anyone's business how much a physician earned or how that physician earned it.

Then some part of physicians' total compensation began to come from the government provision of health-care services to the poor, via Medicaid. And then even more of it began to come from Medicare. In 1980, according to government figures, total health-care expenditures accounted for 9.2% of gross domestic product and the overall governmental share was little more than one-quarter. Health-care outlays reached 17.9% of GDP in 2010 (the latest figures). The governmental share reached 45% in 2010.

There is no scarcity of reasons for the growth of health-care expenditures, and no scarcity of punching bags, among them pharmaceutical manufacturers, greedy doctors and pricey teaching hospitals. All were well documented during the congressional debates over ObamaCare. However, there is also no scarcity of contributory taxpayer behavior to rising health-care spending—although accusations of junk-food excess, exercise deficiency and even tobacco addiction were notably muted in the debate.

Yet another factor was left out of the equation. The United States is alone among Western nations in launching its medical school graduates into the world carrying sizable debt—$158,000 in 2011, according to the American Association of Medical Colleges. Whatever we may yet do to reshape health care, this debt and the need of individual physicians to repay it will inevitably affect the system.

If we are moving inevitably toward more and more "socializing" of how doctors are compensated for their usually exemplary professional labors, the question arises: Should we "socialize" the costs of creating the skills they bring to those labors?"

My Take

From 1980 to now, health care costs as a percentage of our nation's economic output have doubled.

Government's share of paying health care expenses has essentially doubled during that time as well, reaching almost 50% today.

When we talk about big government, we usually exclude the government payment subsidies for such non-government areas as health care. However, government control is government control.

In health care, as elsewhere, as a society we have to choose what to do with our hard earned money. MOM or OPM?

In other words, who decides what gets done and who pays for routine health care expenses? The private sector, including physicians and individual patients, or government?

Perhaps it's time to collectivize the costs of insuring against a catastrophe while accepting individual responsibility for the routine. Such as our collective society paying for the catastrophe with individuals bearing responsibility to pay for the other. After all, that's the basic reason for insurance.

Will we choose the path of (1) more self and local control or (2) more big government and bureaucratic elitist control?

That's the fundamental question to be answered by our self governing democratic society.

And health care truly is the elephant in the room.

Thanks. Bob.

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