As DrRich promised, he has embarked on an exploration of how our new healthcare law will enable our government to attempt the difficult job of covertly rationing our healthcare, a job which Congress had previously designated by law to the insurance companies. (DrRich is not making this up. See Pegram et al. V. Herdrich (98-1949), 530 U.S. 211; 2000.*)
DrRich considers himself to be a reasonably sophisticated person, perhaps even more sophisticated than Ms. Palin, so he did not really expect that Congress would pass a new healthcare law that established actual “death panels.” However, DrRich also understands that the new law, which covers over 2400 pages, has actually been read from front to back by only a very few, very dedicated individuals – and, likely, by hardly any who voted for it – and so, in the interest of thoroughness, DrRich searched the document for the phrase “death panel.” He is pleased to report that there were no matches.
What he did find, however, in Section 3403, is something called the Independent Medicare Advisory Board. The purpose of the IMAB is to “reduce the per capita rate of growth in Medicare spending.” In his next post DrRich will examine the IMAB in more detail, to try to show exactly how this board will reduce healthcare spending. Suffice to say for now that the new law awards the IMAB sweeping powers, powers that will affect all American healthcare (and not just Medicare), and that hands the government some truly useful tools for covert rationing.
In the present post DrRich will simply make two striking observations about the IMAB which, he believes, ought to tell us something useful about the mindset of those who – in striving to fundamentally transform America – have now successfully remade our healthcare system.
First, as the IMAB carries out its assigned job of reducing the growth in healthcare spending, it is explicitly forbidden to ration healthcare. Specifically, the IMAB’s proposals “shall not include any recommendation to ration health care.” Since rationing is Job One, this directive necessarily limits the IMAB to engaging in covert rationing (since covert rationing is, by definition, deniable by the party who is doing it). Thus, covert rationing is now the law of the land.
And second, Section 3403, the section that creates the IMAB and spells out its functions, contains language that, DrRich suspects, has never been seen before in American legislative history:
“It shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection.”
So, dear reader, the IMAB and all its legislated functions (including the requirement to do its rationing covertly) are in force for perpetuity. Our Congress has passed legislation that purports to bind all future Congresses from altering it in any way.
We can surmise from this fact that those who wrote this law must consider the IMAB to be very, very important. Indeed, it must necessarily be the most important feature of our new healthcare system. It may, in fact, be the most important legislative provision ever written (since no other provision has ever received such extraordinary protections from any future alterations whatsoever). For this reason, in future posts DrRich will attempt to examine in some detail the powers that have been granted – for all time – to the IMAB.
But for now DrRich asks his readers simply to bask in the utter audacity of our current crop of leaders, leaders who are so sure they know what’s best for us that they were willing to engage in all manner of legislative legerdemain to get their way, not only against the apparent expressed will of the people, but also (as it turns out) against the objections any future American Congress may have that is sent to Washington by those people.
Not even our Constitution itself – a document that attempted to establish a government for all time – was as audacious as this. For the Constitution, at least, provided a mechanism for its own alteration.
As DrRich racked his brain to think of the last time a law was promulgated with such audacity – not with the audacity of hope, but the audacity of perpetuity – he initially drew a blank. Even monarchs who purported to reign under Divine Right understood that future monarchs, who would also rule under the same God-given right, might justly alter any laws they made.
DrRich believes we need to go all the way back to Moses, coming down from Mt. Sinai with the Ten Commandments, to find a law or set of laws that, from the moment they were written, were decreed to remain in force for ever and ever.
Only God has ever tried this before.
*In its unanimous opinion on Pegram et al. V. Herdrich, the Supreme Court spelled out what Congress had in mind when it created HMOs. That ruling said, the “inducement to ration care is the very point of any HMO scheme, and rationing necessarily raises some risks while reducing others.”
Now that the great campaign to transform the American healthcare system has passed a critical milestone – the passage of President Obama’s healthcare reform legislation – many Americans find themselves confused about what it all means. What just happened here? What will happen to our healthcare insurance? How much will it cost, and who will pay for it? Why does the whole process seem so darned difficult and confusing?
The confusion is quite natural, since, in fact, nobody really understands what the new legislation says. It is common knowledge that only one or two of our legislators actually read the whole 2700 pages, and those who did only read it so they could make trouble for the President at his Bipartisan Healthcare Roundtable this past spring. (You know who you are, Paul Ryan.)
Remember when Nancy Pelosi said, “We have to pass the bill so we can all find out what’s in it,” and all the Republicans jumped all over her for making such a stupid remark? Well, DrRich is here to tell you that Nancy was displaying uncommon wisdom. Because DrRich now has read large parts of the legislation himself, and can say with confidence that the bill is not merely lengthy, convoluted, and difficult to understand. Rather, its meaning is fundamentally indeterminate.
The indeterminacy of the bill’s language was, of course, intentional. It was done so that, for instance, some legislators could be assured that the bill disallowed Federally funded abortions, and other legislators could be assured that the bill encouraged Federally funded abortions, while the actual language of the bill could be construed to bolster either assertion. Therefore, Speaker Pelosi’s silly-sounding statement was not only correct, but also was probably the most insightful commentary on the bill we’ve heard from any public official.
The bill is now being torn into bits by multitudes of officious bureaucrats, and translated into millions of pages of rules, regulations and guidelines, and then key aspects of those new rules, regulations, &c. will be fought over in courts of law. Once all that is finished, we can all find out what was in it. Just like Nancy said.
In the meantime, whatever the details of our new healthcare system turn out to be, there is a certain clear narrative to our ongoing healthcare saga that, once you understand it, will go a long way toward enlightening you about what’s really going on.
And so, as a public service, DrRich will now explain all this to you in a very simple way, so that – whatever jive you’re hearing from politicians or journalists – you will always get it. For, once you understand a few key concepts, this thing is really pretty easy to follow.
The Fundamental Problem
The fundamental problem with American healthcare is this: None of the pools of money we have created (or ever could create) to pay for our healthcare – whether those pools of money reside with the insurance companies or the government or both – can possibly buy all the healthcare that might benefit all Americans. This means we have to ration healthcare (i.e., intentionally withhold at least some beneficial healthcare from at least some of the people who would benefit from it). But because we’re Americans and Americans don’t ration, we (and in particular, our political leaders) are unable to address this need to ration openly and forthrightly. Therefore, the unavoidable rationing is being conducted covertly.
Until now, most of the covert rationing has been overseen by the health insurance industry. This, indeed, from the very beginning was the primary purpose of modern health insurance companies, as determined by Congress itself when it legislated the formation of HMOs. (See the ruling of the U.S. Supreme Court in Pegram et al. v. Herdrich (98-1949), 530 US 211, 2000.) So, when the health insurers engage in cherrypicking patients, denying medically necessary services, coercing doctors to ration at the bedside, retrospectively canceling the policies of patients after they get sick, and doing everything short of dispatching teams of Ninjas in the dark of night to slaughter some of their more expensive subscribers in their sleep, they are not really being evil. They are only carrying out the job that had been assigned to them by our society. Covert rationing is a dirty, thankless job, but somebody’s got to do it.
The major sin of the health insurers is that, despite their Herculean efforts to harness covert rationing to control costs – and despite the wondrous incentive of greater profits if they do so – they have utterly failed in their assignment. Healthcare costs continue to rise at 3 – 4 times the rise in the cost of living, and within the next couple of decades promises to bring our republic to its fiscal knees (even without all the other stuff that’s making our deficit explode).
This is the healthcare crisis, and it’s real. We simply cannot actually spend $40 trillion on Medicare patients over the next three or four decades (as we’ve explicitly promised the baby boomers). The only real question is whether we will avoid spending all that money thanks to societal disruption and revolution, or by some more civilized means. (The fiscal implosion of our society would of course finally fix our healthcare crisis. Healthcare, far from being an essential and indispensable human need, actually is a luxury, a recent artifact of our advanced, stable, and affluent culture. Runaway healthcare costs, by bringing down our societal stability, will eventually provide its own cure.) Our current “healthcare reform process,” such as it is, is our stab at a more civilized means of addressing our looming impossible fiscal obligations.
What Is Healthcare Reform Actually Going to Reform?
What we are witnessing today is merely a rather messy changing of the guard. The primary responsibility for covert healthcare rationing is going to shift from the health insurers to the government.
The health insurance industry has run out its string. They have had 15+ years of virtually unfettered opportunity to get healthcare costs under control, and they have utterly failed. Over those 15 years, their attitude has evolved from arrogance to concern to abject fear. They finally and starkly realize that they have no clue as to how to control costs. As DrRich has pointed out for three years, the insurance industry has not been looking to block healthcare reform, but rather, was partnering with the reformers in the hope of finding for themselves a graceful exit strategy. They hope to gain one last windfall in profits and stock prices (from mandates and insurance subsidies for the tens of millions of currently uninsured Americans), and once that happens, they hope to settle into the business of administering, and processing transactions for, government controlled healthcare. That is, the insurers hope to become public utilities, since that’s way better than collapsing into oblivion.
So the overriding aim of healthcare reform, with the complete support of the insurance industry, is to conduct an orderly transfer of the pools of money with which we pay for our healthcare – along with the responsibility of managing “risk” and controlling the cost of care (i.e., covert rationing) – away from private insurers and to the government.
Understanding the Players
Government control of healthcare, of course, is precisely what the Republicans accuse the Democrats of wanting, and what the Democrats angrily deny they want.
Understanding the Republicans. Republicans as a group cling to the quaint notion that competition among insurers is all that is needed to reduce healthcare costs; that given the right market incentives, the insurance industry – in its wisdom – will bring healthcare inflation under control. They utterly fail to hear what the insurance companies themselves have said (by their actions): “No mas!”
The Republicans’ arguments ring hollow. It is useless to protest that the Democrat plans will lead to rationing, when not only do we already have rationing, but covert rationing in fact has been the official cost-cutting “plan” assigned to HMOs for decades now. It is useless to protest that 85% of Americans like their current health insurance, when the fiscal reality is that health insurance will change drastically for all Americans over the next decade or so, whether we change it by design or not. It does not matter that a lot of Americans like the health insurance they have now. Keeping it over the long term is not an option.
To a very large extent (DrRich is sorry to say, what with his conservative leanings and all), with such arguments the Republicans have made themselves nearly irrelevant in the current discussion.
Understanding the Democrats. The Democrats were handed the opportunity of a generation. They had a major advantage that Democrats of the Clinton era did not have: the health insurance industry is finished, and the industry knows it. The insurance industry was not going to let this effort fail.
The chief difficulty remaining for the Democrats is that (for their own survival) they must pretend they are not engineering a government takeover of healthcare, when in fact they are. As we have seen, there is not really much choice here. They must take over healthcare even if they don’t want to (though many of them do), because the health insurance industry is finished. The pretense is necessary, however, because the notion of government-controlled healthcare is not something the people – or even many Democrats – want, or are willing to tolerate.
Like the odious job of rationing healthcare (which they have now inherited in entirety), the Democrats must attempt to keep the complete government takeover of the healthcare system as covert as possible.
Which brings us to the biggest problem of all for the Democrats. They now have to take control of covert healthcare rationing. Covert rationing will be much more difficult for a government-run system than it has been for insurance companies. A government healthcare system will not have the opportunity to incorporate the most effective rationing techniques that have been available to the insurance industry – cherrypicking patients, for instance, or canceling the policies of people who get sick. Nor will the government be able to get away with summarily denying patients needed medical services – a standard tactic of HMOs. This is especially true now that chief Republican intellectuals have called everyone’s attention to the possibility of death panels. The unwashed masses, having been duly alerted to the government’s intentions of withholding life-saving healthcare, will now be on the lookout for “unreasonable” denials of care. Any move by the government to refuse to pay for a particular medical service will have to be supported by extremely convincing clinical data (which itself will be very expensive to collect), and even then Americans may not quietly accept such denials. The “death panel watchdogs” will be alert for every move the government makes, and will be quick to howl an alarm.
So the Democrats have won a huge and historic victory. But they are just beginning to figure out what a tiger they have by the tail.
The Bottom Line
As long as we pretend we don’t have to ration our healthcare, any reforms we invent – whether we do it as Republicans or Democrats – will merely add to the confusion, inefficiency, waste, inequity, and ineffectiveness of our healthcare system. How anyone can think that a process so fundamentally grounded in obfuscation and deception as the one we’ve just witnessed will result in anything good is quite beyond DrRich’s comprehension.
Real reform would require us to:
A) Minimize the necessity of imposed rationing by having patients themselves make as many of the spending decisions as possible, using their own money. (Subsidies could be provided to people who don’t have enough of their own money to pay for routine healthcare.)
B) Provide everyone with a high-deductable, catastrophic insurance product to cover non-routine medical expenses. This is where the necessary rationing would take place, but the rationing would be open, transparent, and determined through a public process.
C) Create a private market for “extra” health insurance for those who choose to supplement the universal catastrophic plan with their own funds.
But of course, any plan that relies on both personal responsibility and open rationing is a non-starter. Which is why we are going to get what we are going to get.
People who do not like the new healthcare system our government is establishing for us intend to formally challenge the constitutionality of one of its major provisions, namely, the “individual mandate” – the provision that all individuals must purchase health insurance.
The grounds for challenging the individual mandate, essentially, is that the Constitution does not grant the federal government the authority to compel legal residents of the U.S. to purchase a particular product, or enter into a particular contract, simply as a matter of their being legal residents. For many of those who object to the new healthcare law, the individual mandate goes to the principle reason for their objections – that the government has assumed for itself sweeping new powers that directly impinge on the liberty of individuals.
DrRich himself feels this way. If the government can make us buy a product against our will for the sake of the common good, then a firewall will have been taken down, and DrRich does not see any fundamental barrier to the government being allowed to compel us to any action it deems to be for the common good.
For instance, since your obesity, by sucking up limited healthcare resources, will impinge on DrRich’s ability to get whatever healthcare services he thinks he might desire, DrRich can now legitimately petition the government to regulate your intake of Twinkies. You fatty. And as for all you overweight middle-aged women out there, who habitually fail to perform the hour-per-day of exercise that best medical evidence insists you perform, it would be entirely appropriate for the President’s proposed army of college-age zealots – the Civilian Service Corps or whatever he’s going to call it – to show up every day to organize you and your similarly-shaped neighbors into ranks, for hour-long forced marches.
You may think DrRich exaggerates. DrRich hopes so, too. But he’s not sure.
In any case, for those among his readers who do not want any constitutional challenge of the new healthcare law to succeed, DrRich has good news. It won’t.
DrRich has come to this conclusion after reading the section of the law that deals with the individual mandate. This section, “Subtitle F – Shared Responsibility For Health Care,” is carefully designed to defeat any constitutional challenge.
The meat of Subtitle F is contained in one sentence (Section 5000A), to wit: “An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.” This sentence takes up about 20% of one page. Most of the remaining 42.8 pages of Subtitle F creates a protective shell against constitutional challenge. It does this in two ways.
The first protection against a constitutional challenge is the more obvious. In fact, before we ever get to the individual mandate itself, we are treated to five pages that detail the multitude of ways in which “individual responsibility” in healthcare (i.e., the mandate to buy insurance) “is commercial and economic in nature, and substantially affects interstate commerce, as a result of the effects described in paragraph (2).” In other words, the individual mandate is wrapped by a formal “finding of Congress” that this mandate is subject to the Commerce Clause of the U.S. Constitution.
DrRich is not enough of a legal scholar to understand whether the five pages of justification that follow (the “paragraph 2,” referred to above) are sufficiently compelling to actually invoke the Commerce Clause. To him, it all sounds like an “ends justifies the means” argument, one that would be equally applicable if Congress decided it would benefit the general welfare to mandate that people purchase all their cars from Government Motors. But whether or not the supportive language itself proves compelling to the courts, it seems very unlikely to DrRich that the Supreme Court would overturn a formal “finding of Congress,” as regards the applicability of a provision of Congress to the Commerce Clause.
But this first protection against a constitutional challenge only covers the first five of the 43 pages of Subtitle F. Most of the remaining 38 pages establishes the second protection. This one is more subtle than the first, but, DrRich thinks, it will be the more difficult one to overcome.
That remaining portion of Subtitle F deals largely with the penalties to which individuals would be subject if they failed to comply with the mandate to buy health insurance. It describes in detail how the mandate is to be complied with, how compliance is to be documented, and how the mandate is to be enforced. This long section of Subtitle F reads like tax law, like IRS code. As well it should. For, what it establishes is that the individual mandate is actually a tax, that is treated like any other tax in its documentation, collection, and enforcement, and indeed, that the IRS will be running the whole show.
If DrRich were defending the individual mandate before the Supreme Court, here is what he would say.
“Your Honors (and you other Justices, too), even if you find that the Commerce Clause is not applicable here (a finding, I respectfully submit, which would create a Constitutional crisis, since Congress has issued its own formal finding to the contrary), you must let this provision stand for an even more compelling reason, which is: This is not really an individual mandate to purchase health insurance or any other product, as our opponents claim. It is, in fact, simply a tax, like any other tax.
It is a tax. A healthcare tax. It is a tax to support healthcare in the United States, payable to the U.S. Government on Form 1040, administered and collected entirely by the Internal Revenue Service. It is not in any way fundamentally different from the Medicare and Medicaid taxes, which also support healthcare services for our citizens, which also appear on Form 1040, and which are also administered and collected entirely by the IRS.
Your Honors, simply look at the language of Subtitle F. After a modest amount of palaver to convince Your Honors that the Commerce Clause applies (and, I remind you, it does), the last 38 pages of this Subtitle is tax law. I mean, really, just try to read it. Can any of you understand it? Neither can I. It’s IRS tax code, plain and simple.
The only difference between this tax and any other federal tax is that Congress, in its wisdom and magnanimity, gives the individual citizen the ability to opt out, to not have to pay it, simply by documenting that they have purchased health insurance. That is, if the citizen chooses to buy health insurance – which, we must all admit, would be a wise decision from that individual’s point of view, as well as a benefit to society – the IRS will forgive the new healthcare tax altogether.
Where is the mandate here? Nowhere in Subtitle F does the word “mandate” appear. Rather, Subtitle F refers to “shared responsibility.” Individuals should feel responsible to do their part for society as a whole, and this Subtitle encourages them to act on that responsibility. They can do so by paying the new healthcare tax. Or, if they choose, they can do so by making sure they and their families are covered by health insurance. To be sure, Congress’ intent was that the large majority of citizens would choose the latter. But for all that, it is in the end the individual’s choice.”
As much as DrRich wishes otherwise, the individual mandate in the new healthcare law has been written in such a way as to almost certainly turn aside any challenges based on its constitutionality.
So, ladies, form your ranks and start marching that fat off. Hep-two-three-four.
Loyal readers will know that DrRich has long believed that passage of healthcare reform was inevitable – but not because the President wanted it, or because Democrats controlled Congress, or because the people wanted it. It was inevitable because the American health insurance industry absolutely needed it.
Health insurance companies find themselves at the place in their industry’s life cycle where, for the very first time, they have to try to make a profit by actually taking care of sick people. They have never done that successfully, and never will. They have tried every underhanded trick imaginable to avoid paying benefits to their subscribers, and have already raised insurance premiums to the very breaking point. But patients are getting older and sicker, and expensive drugs and medical devices and other technologies keep coming on line. The insurance industry’s profit margins (already small) are rapidly eroding. Its business model is irreparably broken. What the health insurers need more than anything else is a graceful exit strategy – whether it’s a buyout from the government, or a conversion to a public utility. And the only way they’re going to get such an exit strategy is through a fundamental reform of the American healthcare system. Hence, this is what they must have.
It is already difficult to remember how remote the possibility of healthcare reform seemed only two months ago, immediately after the election of Scott Brown in Massachusetts. Conventional wisdom at that time was that the kind of sweeping reforms the President wanted (and that we’ve now received) had become impossible. And the President himself seemed to confirm that opinion in his State of the Union message, in which he gave healthcare reform only a few, almost wistful paragraphs, and only after talking for 20 minutes about more pressing concerns. NPR’s take was, “Obama Treads Lightly On Health In State Of The Union,” and reported that the President seemed now “willing to reopen the discussion to accommodate better ideas on how to remake the nation’s health system.”
DrRich believes he was the first to point out, on February 18, that the health insurance companies, faced with a broken business model and in imminent crisis, would not allow healthcare reform to die, and must necessarily act in some dramatic way to resurrect it, and indeed – with the announcement of a 39% premium increase by Anthem Blue Cross in California – had just done so. While other, more mainstream pundits entirely missed its significance, DrRich patiently explained to his readers that Anthem’s ostensibly ill-timed announcement was actually a purposeful strategy, carefully calculated to inject new life into healthcare reform. And of course, it worked.
Now, belatedly (i.e., on March 20), lesser pundits (such as those who work for the New York Times) have come around to DrRich’s way of thinking, and have pointed to the Anthem announcement as a major turning point in the healthcare reform saga. Indeed, some reporters (who, admittedly, are even more on the fringe than DrRich) claim to have uncovered a conspiracy, in which Angela Braly (the CEO of Wellpoint, parent company of Anthem) is claimed to have actively conspired with the Obama administration to save healthcare reform.
This is an interesting allegation, but DrRich generally does not believe in conspiracies, at least, not in conspiracies which are larger than those necessary to cheat at bridge. The fact is, one does not need to invoke any kind of conspiracy here. Anthem/Wellpoint was merely acting in its own corporate best interests. If their announced rate hike proved insufficient, we would have heard of even more astounding rate hikes by other insurance companies. Whatever it took.
DrRich has been saying since 2007 that the health insurance industry, more than any other player in the healthcare system or in the government, absolutely needed healthcare reform, and needed it now, and for that reason alone, in one way or another, we would get healthcare reform.
And that’s exactly what happened.
DrRich has decided it is time to begin studying the 2700-page healthcare reform bill that the Senate passed on December 24, as that is the bill which will actually become the law of the land. In the fall, DrRich had spent quite a bit of time with the House bill. This was such a painful and useless exercise that DrRich decided he would not waste any more of his time with proposed legislation, but instead (as Nancy Pelosi has wisely suggested) would wait until Congress passed a bill so he could find out what’s in it.
Now, DrRich does not have the stamina to study the new law all at once, as a whole. He must bite off little pieces. And the first thing he sought in embarking on his study of our new healthcare system was evidence of how the new law would rescue the Primary Care Physician.
This is important, since everyone acknowledges that we have a severe shortage of PCPs already, and when we add 32 million Americans to the rolls of the insured, that shortage will become extremely acute. Further, we know that very few medical school graduates are deciding to become PCPs, and further, that the PCPs who are in practice today are becoming older rapidly, and many may not be around in 10 years (or even in 10 months, once this reform bill passes).
As we all have heard, our President and his Congress have explicitly recognized the problem, and have frequently explicated on the need to build up and support our beleaguered primary care workforce. They have promised that their healthcare reforms will aggressively address this issue. And it is largely due to this promise that prominent physician organizations, like the AMA (which really represents a relatively small minority of the medical profession) and the American College of Physicians (which represents a large proportion of internists, of whom many are PCPs), have come out in support of the President’s reform efforts.
DrRich believes, of course, that for the Feds to suddenly make themselves the champions of PCPs, after spending nearly two decades systematically rendering primary care medicine a completely untenable proposition for American physicians, would be an unlikely outcome for any reform bill. Just to remind his readers, here’s what DrRich has previously observed about the carefully engineered plight of the American PCP:
“Their pay is determined arbitrarily by Acts of Congress, not by what they’re worth to their patients or to the market, and indeed in this way PCPs have a lot in common with workers in the old Soviet collectives.
They are directed to “practice medicine” by guidelines and directives which are handed down from on high; guidelines which, being forcibly based on what is called “evidence-based medicine,” necessarily address the average response of some large group of patients to the treatment being considered and do not allow much if any latitude for an individual patient’s needs; and which are often promulgated less to assure the excellent care of patients and more to further the agenda of various and competing interest groups, professional, governmental and otherwise.
They are limited to between 7.5 and 12.5 minutes per patient encounter (depending on the third party that controls a given patient’s medical care), and the content of what must occur during those 7.5 minutes is strictly determined by sundry Pay for Performance checklists, so as to strictly limit any interchanges between doctor and patient that do not meet the approved agenda for such encounters.
Their every move must be carefully documented according to incomprehensible rules, on innumerable forms and documents, that confound patient care but that greatly further the convenience of healthcare accountants and other stone-witted bureaucrats who are employed specifically to second-guess every clinical decision and every action the PCP takes.
They are expected to operate flawlessly under a system of federal rules, regulations and guidelines that cover hundreds of thousands of pages in immeasurable volumes that are never available in any readily accessible form. If they do not operate flawlessly according to those rules, regulations and guidelines, they are guilty of the federal crime of healthcare fraud. Furthermore, the specific meanings of these rules, regulations and guidelines are not merely opaque and difficult to ascertain, but indeed they are fundamentally indeterminate – that is, no individual or group of individuals in existence can say what they mean. So, PCPs operate under a massive quantum cloud of rules as best they can, but their actual status (regarding healthcare fraud) is, like Schrodinger’s cat, fundamentally unknowable – until the “box is opened” (typically through criminal prosecution), whereupon the meaning of the rules is finally crystallized in a court of law, and doctors who had been practicing in good faith find that they have at least a 50- 50 chance (like the cat) of learning that they are actually professionally dead.
Worst of all, PCPs have been charged with the duty of covertly rationing their patients’ healthcare at the bedside, and they have been pressed to nullify the classic doctor-patient relationship, by the healthcare bureaucracy that determines their professional viability, by the United States Supreme Court, and by the bankrupt, new-age ethical precepts of their own profession.”
How does our new healthcare law propose to “fix” these problems? DrRich can find two proposed solutions in the Senate bill.
First, the new law promises to address some of the pay discrepancy which punishes doctors for going into primary care specialties. It is unclear to DrRich how much this new pay fix will bring to PCPs. He will merely observe that, until now, the Feds have intentionally rendered primary care medicine such a soul-wrenching, personally and professionally demeaning endeavor that it has pushed most PCPs beyond mere anger, frustration, or resignation. Many of them are desperately looking for any practicable exit strategy. And to DrRich’s thinking, since it is not primarily their relatively low income that has caused all this anguish, a mere boost in income cannot overcome it.
But, of course, that’s for the PCPs themselves to decide.
Second, the new law proposes to fund new training opportunities for PCPs. This also sounds nice. But DrRich wonders what effect these new training programs will have, when the training programs that already exist cannot come close to filling their slots.
DrRich contends that these two stated “fixes” for manufacturing more PCPs cannot possibly provide an actual solution to the PCP shortage, and further, that the authors of the Senate bill cannot possibly believe they will. And so, DrRich decided to look a little deeper.
The answer to the PCP shortage – at least, the answer our political leaders are actually relying upon – is revealed deep in the Senate bill, in Section 5501, where the definition of “Primary Care Practitioner” is actually provided. Note, first of all, that once this bill becomes the law of the land, “PCP” will no longer mean “primary care physician,” but rather, will mean “primary care practitioner.”
And here’s how the new law defines Primary Care Practioners:
The term ‘primary care practitioner’ means an individual who —
(I) is a physician (as described in section 1861(r)(1)) who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine; or
(II) is a nurse practitioner, clinical nurse specialist, or physician assistant (as those terms are defined in 9 section 1861(aa)(5))
And so, to his readers who are primary care physicians, DrRich must report that the real “fix” your political leaders have envisioned for the PCP shortage has been to declare you and nurse practitioners to be functionally (and legally) equivalent. This, DrRich submits, is all you need to know.
Having painstakingly reduced you unfortunate practitioners of primary care medicine to tools of the state – whose job is to follow the guidelines and place chits on the checklists which are handed down from on high, and to fill out the electronic forms which are designed not to advance patient care but to convenience the healthcare accountants who will thereby judge your “quality” – it is only natural for the central authority to eventually notice that you really don’t need all that training to do the kind of job they have invented for you. Nurses – who can be “trained up” much more rapidly than you, who will work for much less money than you, and who (they think) will be much less recalcitrant about following handed-down directives than you – will fill the gap. And you, doctor, can go pound salt.
DrRich must hasten to add, by the way, that, regarding the nurse practitioners, he believes the Feds have miscalculated. DrRich knows a lot of nurse practitioners and greatly admires their professionalism. He believes that “PCP” has been so successfully demeaned that many fewer nurse practitioners than our political leaders think will actually jump at the opportunity to become one (especially when you take into account the liability you assume when you become a PCP in a non-tort-reform paradigm like the one our leaders have made for us). Trusting in their common sense, DrRich will leave the nurse practitioners to their own wise counsel.
To his primary care physician friends, who have bravely held on, clinging to the promises made by our political leaders that their noble efforts will not go unrewarded, and to the assurances made by their own professional organizations that all will be well once the system is reformed, DrRich is forced to say: Told you so.
He also reminds you that it is still not illegal to opt out, and urges you to consider that it soon might be.
The U.S. Congress has been distracted from the vital issue of healthcare reform in recent weeks, due to the prospect of elections of one form or another (that is, Scott Brown’s, or their own). It may be a little difficult to understand why the Democrats – who still hold the Presidency, a large majority in the House, and a 59 to 41 majority in the Senate – suddenly seem to be so very disheartened, to the point of virtual paralysis, on healthcare reform. Healthcare reform, after all, is the crowning jewel in their agenda to fundamentally change America as we know it.
While President Obama, Speaker Pelosi, and a few other stalwarts seem to understand that passing healthcare reform would be worth almost any price that might be extracted by the electorate in November, less principled (and more at-risk) members of Congress, who are apparently less dedicated to a certain ideology than their leaders, apparently see it another way.
And so, from all appearances, things appear to have stalled on healthcare reform.
But while our political leaders seem willing at this moment to take a breather – either to lick their wounds and regroup, or to celebrate an important tactical victory – one interested party in the healthcare reform wars cannot afford to rest.
That would be the health insurance industry.
As DrRich has pointed out before, the health insurance industry is the one entity that simply cannot afford to wait. They need healthcare reform now.
The health insurance industry has pretty much run out its string. The era in which insurers can increase their market cap by acquiring public assets (i.e., non-profit institutions) for a fraction of their true value, and by making mergers and acquisitions, is pretty much over. For the past few years insurance companies, for the first time, have had to try to make a profit by taking care of sick people. They have never done that successfully, and never will. They have tried every underhanded trick imaginable to avoid paying benefits to their subscribers. They have already raised insurance premiums to the very breaking point. But an uncooperative public insists on getting older and sicker, and greedy drug and medical device companies insist on bringing ever-more expensive technologies to the clinic. The insurance industry finds its profit margins (already small) rapidly eroding. The industry’s business model – taking in inflated insurance premiums, then attempting to withhold medical services – is irreparably broken.
As a result, what the health insurance industry needs more than anything else is a graceful exit strategy. And Mr. Obama’s healthcare reforms promised them that very thing. (What, exactly, they have been promised is largely a matter of conjecture, but most likely they will take on a role in administering government-funded healthcare, quite possibly assuming the role of a public utility.)
Whatever may be the particulars of the “deal” the health insurance industry struck with the reformers, that deal offered them enough to purchase their silence during the entire roiling debate over healthcare reform through the summer, fall and winter. They have stoically (almost cheerfully) accepted their assigned role as “villain” in this set piece, and have silently borne the public “attacks” the President and his soldiers have dutifully launched against them in an effort to drum up support for their reforms. All the nasty things the Democrats have said about them, the industry understands, are necessary components of their last best hope to salvage something serviceable out of their broken business model. No Harry and Louise this time!
Despite this symbiotic relationship, the reforms envisioned by the Democrats and the insurance industry have now faltered. The stalling of the reforms, however, means very different things to these partners.
For the Democrats, while abandoning, or even substantially diminishing, the ambitious reforms they had in their sights might prove modestly embarrassing for a time, such is the nature of politics. When one overreaches, one pulls back and waits for a while, until the other side overreaches. Look at where the Republicans were just a year ago. A year or three from now, they may be back in a similarly diminished state – and the time for passing healthcare reform may again become propitious. If you’re a Democrat politician, you must take the long view.
But the insurance industry does not have that luxury. They are at the end of their tether, and their only alternative to a graceful exit strategy of the type (whatever it was) the President promised them, is a completely graceless one. Whatever happens or doesn’t happen with healthcare reform, the insurers can’t keep doing business as usual. DrRich believes the health insurance industry has been backed into a corner, and the doorway the Democrats were making for them is being nailed shut.
In such a situation, it is entirely predictable that the insurance industry will take some kind of drastic action, to try to force healthcare reform back on the table.
And last week, Wellpoint did so. Wellpoint’s California subsidiary, Anthem Blue Cross, announced it is raising its already-astronomical health insurance premiums by as much as 39%, a move that promises to greatly increase the number of Californians who are uninsured.
Kathleen Sebelius immediately fired off a public letter to the company, demanding that they justify this unconscionable rate increase. And Wellpoint, lustily assuming its assigned role as villain, was delighted to comply. We’re in a recession, Wellpoint brazenly asserted, and in a recession, like it or not, people exercise their prerogative to drop their health insurance. The only people who don’t drop their health insurance are the sick people or those who are likely to become sick, which means that our cost per subscriber goes way up. So naturally, we have to increase premiums. By a lot. It’s just business. That’s just the nature of our current, unreformed healthcare system. So choke on it.
Wellpoint was also kind enough to mention (for anyone dense enough to have missed the point) that the need for higher premiums would be nicely mitigated if everybody was mandated to purchase health insurance.
Wellpoint’s premium increase immediately triggered great volumes of delighted outrage by thankful Democrats, who really need a large dose of “evil insurance company” right about now, but it elicited only a few lame and uncomfortable attempts by stunned Republicans to diminish the significance of the unfortunate action.
DrRich would like to point out that, from a pure business standpoint, there was no good reason for Wellpoint to stir the soup at this moment. Wellpoint is the most financially sound private health insurance company. While its California subsidiary did lose money last year, overall the company performed quite well, and reported a very nice profit growth for the year. And with several of its competitors in trouble, Wellpoint stands to do comparatively well for the foreseeable future. So it stands to reason that, if Wellpoint really wanted healthcare reform to go away, they would have waited a few months before announcing their rate hike. It would have cost them very little to do so. The last thing they would have done is to throw the reformers a critical lifeline just as they were going under for the last time.
Wellpoint’s astounding premium increase was, DrRich submits, a strategic move to push health insurance reform back to the front burner.
The Republicans, many of whom believe that the failure of Obama’s healthcare reform will spell the failure of his presidency, have been thereby served notice. An angry electorate – which, at the moment, seems ready to punish Democrats for their attempt at passing an unpopular government takeover of healthcare – is likely to become even angrier if it turns out that the failure to reform healthcare will give the haughty insurance companies the green light to price even more millions of hard-working Americans out of the health insurance market. That species of anger will be directed toward the Republicans, and not the Democrats.
DrRich has always maintained that if healthcare reform is to happen, despite the incompetence of the Democrats who control everything, the reason it will happen is because the insurance companies cannot survive without it.
Accordingly, Republicans who understand what Wellpoint is telling them will think twice about skipping President Obama’s proposed bipartisan summit on healthcare, or behaving intractably if they do show up. If they fail to get the message, DrRich suspects that we will soon be hearing about additional, even more astounding, rate hikes.