How Covert Rationing Precludes Efficiency

Posted on July 3, 2008
Filed Under General Rationing Issues |

(Don’t forget to check out the Independence Day version of Medical Grand Rounds.)

Depending on which news source you read, physicians either are or are not about to get hit with a 10.6% pay cut from Medicare. (The actual outcome of the pay cut kerfuffle, some say, will depend on how many Republican Senators are buttonholed by how many American doctors at July 4 picnics.)

Many people have formed rather firm opinions on this matter. Physicians, for instance, mostly disapprove of the pay cuts. Others (most often non-Medicare-aged non-physicians with what is termed today a “progressive” outlook) feel strongly that doctors are among the most coddled and advantaged groups in the land, and that a modest sacrifice like this pay cut is the least they ought to be willing to offer for the public good. And of course, DrRich himself has an opinion on the matter, which will be well-known to most readers of this blog.

But on the other hand, most Americans haven’t really given it much thought. After all, most Americans are not doctors, they’re not on Medicare, they’re not politicians, and they’re not sick. Besides, some have suggested, the Bible-thumping, gun-toting masses are too disaffected with such concerns as the cost of gasoline, food prices, job security, health insurance, and the 15 (or 16 - one loses count) consecutive losing records of the Pittsburgh Pirates, to be able to concentrate on the truly lofty questions. Furthermore, it is commonly believed by well-educated (and especially progressive) persons that the great unwashed are just a bit too dim to understand the really important issues, and so must be reassured (and led along) with easy-to-digest, 10-second “executive summaries,” which can be repeated over and over and over, as needed. So, for instance, we can’t let a few greedy doctors and fat cat Republican Senators destabilize Medicare.

DrRich, on the other hand, who was himself held in captivity by two of these Bible-thumping, gun-toting hoi polloi for the first 18 years of his life before escaping to more enlightened environs, grudgingly came to realize they weren’t so dumb after all. Indeed, in comparison to many of the Harvard-educated Top Scientists and Top Doctors with whom DrRich (who did not go to Harvard) has had the honor of working, Mom, Dad and the guys in the steel mill (with whom DrRich also had the honor of working, back when America still had steel mills) displayed a very comparable degree of innate intelligence, and a far superior degree of general wisdom and common sense.

But not even Dad (the smartest man DrRich ever knew, uncommonly smart even for a steel worker) could have figured out how doctors are getting paid today, or what’s up with the projected physician pay cuts. (He would have easily brushed aside the assertion that doctors themselves ought to embrace the cuts out of a sense of altruism, or alternatively, guilt.)

The sad fact is that anyone who actually tries to look behind the headlines to figure out why physicians are (or are not) about to get hit with a 10.6% pay cut by Medicare will quickly be swept away by a maelstrom of tangled laws, policies, regulations, interpretations, guidelines, secret committee proceedings, quid pro quos, tit for tats, and “unintended consequences” of both varieties (i.e., the actually unintended ones and the secretly intended ones), that surpasseth all understanding.

Go ahead, try it yourself.

First, DrRich recommends you study the Happy Hospitalist’s latest exposition on how doctors actually get paid. It is the clearest explanation DrRich has ever seen. But even though Happy has taken very great pains to simplify the processes involved, in order to make them remotely understandable (and to such effect that he deserves a Pulitzer, or whatever the blogging equivalent may be), their complexity is breathtaking. Trying to explain how physicians get paid is akin to explaining how one achieves the mystic vision of the Great All; one can come close to the truth with the use of language, symbols, graphics, analogy, starvation, exposure to the elements and controlled breathing, but one must actually experience it to appreciate the essential wonder and transcendent awe.

Then, for a clear explanation of how changes to physicians pay are accomplished, DrRich insists you deconstruct Robert Laszewski’s article in Health Affairs. This is merely a description of Congressional procedure, not really that much more complicated than most things Congress does, and is necessarily much simpler to follow than the Byzantine convolutions tackled by the Happy Hospitalist. But still, it is fairly frightening that any aspect of America’s healthcare is decided in such a manner.

However, to really begin to get a general idea of the complexity of the whole system, one must synthesize these two articles - the process for regulating the system of physician reimbursement (Laszewski) and the system of reimbursement itself (Happy.) By “one,” DrRich is referring to you, the reader, as it is far beyond the poor abilities of DrRich to do so himself.

Don’t feel badly if you can’t synthesize this mess, either. For in truth, the physician reimbursement system is not meant to be understood by mortal man.

And that’s the point.

It turns out that this incomprehensible physician reimbursement system was set on its current path by one simple desire: to force doctors to covertly ration healthcare. As Laszewski explains in another article,

The idea was to set an “affordable” physician cost trend and when real costs exceeded that level Medicare would compensate for it by cutting future fees. The. . .message to doctors was simple: If you spend too much the Medicare program will compensate by cutting your fees in the future to balance things out. The objective was to give physicians a reason to control their costs.

Yes, that’s right. The original purpose behind this whole mess was to induce physicians to stop spending so much of Medicare’s money on patients’ medical care.

But when you set out to do such a thing, you can’t just come right out and say so, because that would be admitting to rationing. Instead, you’ve got to hide your real purpose in soothing language (generally it’s best to employ irony, and talk about improving efficiency and quality), and in bureaucratic processes that are so convoluted that the casual observer (or even the serious investigator) will not be able to discern their real intention.

Things get bad enough, as DrRich has described numerous times, when the bureaucratic entity running the covert rationing effort is a private insurance company.

But to really appreciate the potential for the opacity, complexity, and inefficiency demanded by covert rationing, one must study the government’s efforts in this arena. To the mere goal of profit which is the lifeblood of any company (too often fueled by excessive greed, one must admit), add the much stronger and additional aims of power and influence that fundamentally motivate our politicians, regulators, administrators, and others too numerous to mention who work for the government. Then stir in the absolute need to make convoluted deals, compromises and concessions with sundry interest groups and diverse colleagues and acquaintances, influences that may or may not have anything whatsoever to do with healthcare. Pretty soon you have the kind of “system” that is partially explained by a synthesis of the exertions of the Happy Hospitalist and Robert Laszewski.

The current physician reimbursement system is emblematic of what we might expect if we turned the entire healthcare system over to the government, and those who rail against such a single-payer system ought to use this example as an object lesson. For those who favor a single-payer system, however, such examples are simple to counter with illustrations of the egregious and heart-rending abuses perpetrated by private health insurers.

This is all to say that the real issue is not so much with the government or with the private insurers. Whatever travesties these entities perpetrate simply follows from the job we’ve all given them, which is, to ration our healthcare covertly. Covert rationing is rationing by whatever means you can get away with, and so utterly requires head fakes, misdirection, systematized inefficiencies, complexity, delusion (of self and others) and flat out lies. These things simply cannot be accomplished in a system characterized by transparency and smooth efficiency.

So if we’re going to continue rationing healthcare covertly, it really doesn’t matter all that much whether the rationing bureaucracy is controlled by the feds or private insurers. As the (other) Poet says, Fire or ice; either will suffice.

Comments

4 Responses to “How Covert Rationing Precludes Efficiency”

  1. L-E on July 3rd, 2008 10:18 am

    I’m reading an excellent book titled “Free Lunch” (not about drug rep lunches for doctors!). Its section about government policy on health care begins with a chapter on “Unhealthy Economics” that includes information about the rationing of health care. It talks about “complex bureaucratic systems . . . based on subparagraph k at page 454.” Sorry to say I see my current job alluded to: explainer of convolutions involving various databases, definitions, units of measurement and geography, other agencies, etc., etc., etc.

  2. happy hospitalist on July 3rd, 2008 6:44 pm

    that was a fantastic entry. Do you write speeches? Great grand rounds as well

    Happy

  3. DrRich on July 3rd, 2008 8:13 pm

    L-E,

    Sounds like you will have perpetual job security.

    Happy,

    Thanks a lot. The only speeches I’ve written are ones that I’ve given.

    I really do appreciate all the work you’ve done to figure this stuff out. I expect lots of others do as well.

    Rich

  4. Dr. R on July 9th, 2008 7:50 am

    Doublespeak also “hideth” that we are mostly rationing disease care, not healthcare. Changes need to be made at the societal level to end the epidemic of lifestyle diseases.
    Is the wealth created by our way of life sufficient to pay for the diseases caused by it?

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