Third parties also will figure largely under the new health care law, which will put the needs of the “collective” ahead of doctors’ consciences and the physician-patient relationship, Dr. Orient says.
“It’s going to change the way physicians work,” she says. “Instead of being paid by their patients, they’re going to be accountable to managed care organizations, which are going to get a pile of money and then divvy it up based on how well you comply with what the third party thinks you should do. You’ll be punished for providing too much for some patients or for not doing the things they think you should do, and one of the things they think that maybe you should do is dehydrate and starve patients to death or withhold medical care from them.
Physicians are regulated and disciplined by the medical boards of the states in which they practice. Nonetheless, the federal government wants to track physicians with their own Medicare GPS. Whether enrolled or opted out, the government’s mission is accomplished: controlling physicians through layer upon layer of paperwork.
The effort to control physicians and patients’ choices one rule at a time is backfiring. Patients are seeking out “high value” physicians who are willing to be innovative in providing individualized care and affordable payment options. They know that real “administrative simplification” is bypassing the middlemen with an open market that has transparent costs.
…there are no real prices in the conventional health care system. There are only artificial “reimbursement rates,” negotiated or imposed by third party payers. A considerable part of the book (Priceless, by John C. Goodman) is devoted to explaining how this creates perverse incentives for all parties and when people act on those incentives they do things that make costs higher, quality lower and access to care more difficult than otherwise would have been the case.
How does a standard health economics textbook handle this issue? To find out, I consulted Health Economics: Theory, Insights and Industry Studies, by Rexford Santerre and Stephen Neun. I am told that this textbook is pretty run of the mill as far as health economics goes. Here is what it does: It tries to force health care into the traditional toolbox of economic analysis. It starts by analyzing demand, then goes to supply and then tries to put the two together. Initially, it shows price determined by the intersection of a supply curve and a demand curve — just what would happen in the market for wheat or corn. It then explains variations on market structure, including monopoly, monopsony, etc. All straight from conventional price theory and all totally irrelevant for what happens in most health care markets.
… So you would think that if economists were going to try to force the economists’ box of tools on health care, there ought to be a few examples of where that actually works.
Take cosmetic surgery, for example. I go to the index…Search under “c”…That’s “c…o…s…” hmm…It’s not there.
Okay, what about Lasik surgery? I go under “L”…That’s “L…a…s…” hmm…No Lasik.
Now I’m on a roll. What about walk-in clinics? No. Free standing emergency rooms? Nix. Domestic medical tourism? Nein. International medical tourism? Nada. Online mail house pharmacies? Zilch. Concierge medicine? No way. Reference pricing for joint replacements in California? Not a word.
In 552 pages ― crammed with type so small my dwindling eyesight can barely see the words ― these guys have not one example of a health care market where conventional tools of economics might actually apply.
Public judging of a law (Obamacare is just one example) as a failure invariably leads thoughtful people to dig deeper, wondering, for example if other laws have escaped the public scrutiny they deserved, and introduces an element of doubt about the sincerity of the players in the regime and even the legitimacy of the regime itself. Having lost their health insurance as a result of Obamacare, a hitherto Obamacare supporter might entertain the unthinkable: ”If I was lied to about being able to keep this policy I liked, what else have they lied to me about?” Most people in this spot initially direct their frustration at individuals rather than focus on the system itself, mistakenly believing that a different political course of action is all that is needed.
Much more important is the non-political form of defiance, for this represents the “lack of consent of the governed,” that brand of defiance that even the cruelest of tyrants have found difficult to crush. Ignoring, ridiculing or laughing at the awkward cruelty and corruption of tyrants and their cronies have historically been more effective in deterring political bullies than even the best results of “mid-term” elections, in my opinion.
“…This coercive, anticompetitive system has survived to this day, under government protection, resulting in the runaway costs and obscene corporate profits you would expect. This syndicate generates gigantic hospital bills, and the extent to which these bills remain uncollected provides the basis for the taxpayer subsidization known as the uncompensated care system, or disproportionate share hospital (DSH) payments.
The hospital charges $100 for an aspirin, collects $5, and claims to have “lost” $95. Such false losses maintain the fiction of the hospitals’ “not for profit” status. Often, insurance companies sell their “discounting” services. For example, they may reduce a bill from $100,000 to $20,000 and collect a percentage of the false “savings.” This is the “repricing” scam. This setup perversely inclines the insurance carriers to seek out the highest bills they can find, assiduously avoiding better priced alternatives.
Nothing could be more disruptive to this syndicate than a fresh dose of the principles of the free market, more specifically, upfront and transparent pricing. Not only does reference pricing expose the health care racket, but simultaneously provides a powerful deflationary influence, as fear of the loss of patients to a better-priced facility retains great power even in this corporatist soup.”