634 Billion will not come close for Health Care Reform

Implications

The goal of Obama’s health care reform is to insure all Americans have access to affordable health care. There is not enough money in the Federal treasury to reach such a goal. President Obama will be frustrated in trying to extract the savings he desires by eliminating duplications and errors. Computerized electronic records will not result in budget savings to the extent that the administration desires. The laws of economics will rule the day and the President’s desire to solve both healthcare prices and access to care at the same time will fail

Analysis

As quoted in the article, “Obama puts health care reform at heart of budget”, Senator Ted Kennedy said “With this budget, the president also makes an historical commitment to the goal of quality, affordable healthcare for all Americans.” This goal states that the administration desires to solve both the healthcare price problem and healthcare access problem simultaneous while insuring quality healthcare is provided. These goals are not mutually solvable at the same time. Quoting from a Wall Street Journal article dated 5/04/1993 related to President Clinton’s health care reform task force by Rick Wartzman and Hilary Stout, “James Ukockis, a Treasury department economist, recalls a trip he took to Paris some years ago when the French government put price controls on croissants. Bakers simply halved the size so that customers had to buy twice as many to get their fill. ‘You can’t repeal the laws of economics sufficiently enough to control both price and quantity.’” The problem with health care reform goals stated like Senator Kennedy's quote above is that there is not enough money to pay for all the healthcare that the people of the United States desire. During the 90’s while universal coverage was being debated, I worked at a hospital close to the Canadian border. We had many patients from Canada. In an article printed in The Daily Interlake, Kalispell Montana, November 27, 1995 on 'Demoralized Canadian doctors leave home for more cash in U.S.', a Dr. Ivan Krajbich described the conditions in Canada as “In Canada, everybody was overworked, demoralized.” The problem, according to the article, is “While the Canadian system provides free heathcare to all citizens, many doctors say a shortage of government money has translated into longer waits, a lack of hospital beds and difficulty accessing specialist such as Krajblich.” This scenario has been duplicated in other industrial nations that have socialized healthcare. While the citizens have access to healthcare regardless of their ability to pay, the lack of funds available to pay for all the healthcare the citizens desire results in rationing of care and shortages with their corresponding long waiting periods for care. The Communist governments found this to be the case. When you drop the price people have to pay, demand grows to a point where huge shortages develop and in the long run, access to healthcare is actually worse than if the industry were left alone. President Obama has a goal of achieving savings in the healthcare industry by eliminating duplication, errors, and medically unnecessary procedures or tests. He plans to implement this goal through the use of national electronic health records. Hospitals and doctors would be required by 2015 to install certified electronic health records, or else their payments from Medicare would be lowered. As an incentive to install certified systems, early adopters will receive incentive payments and hospitals will be given additional payments to cover the high cost of installing the new system. We estimate the cost to our hospital of converting to a new system to be around $2.4 to $2.8 million, with the government paying close to 70% of the conversion costs. These certified systems will communicate with Medicare offices allowing Medicare employees to review a patient’s health records and make decisions on approving the care of a patient. Many insurance companies have pre-authorization requirements and Medicare intends to implement a pre-authorization system nationally using certified electronic health records. Currently hospitals and physicians have a well defined system of rules specifying “medical necessity” that they have to comply with. These rules often result in denying needed health services to Medicare patients. In this case, a physician’s best medical judgment is being overruled by arbitrary rules. For instance, a physician may feel that a patient is at risk for a surgery and order a pre-operative EKG. Medicare says that pre-operative EKG’s are not medically necessary unless the patient has a history of heart problems. A physician, while examining a patient, may suspect a heart problem where none existed before. I would much rather have healthcare in a system where the physician’s judgment overrules the computer than the other way around. To get around this rule, physicians have learned how to code a case to skirt the medical necessity rules and get the test paid for by Medicare anyway. Physicians are bright and will learn to do the same with certified electronic health records, frustrating the President’s goal of achieving savings. As Mr. Ukockis pointed out, above, when the demand is there, no set of rules can hold back the tide. The same Wall Street Journal article cited above stated “history shows that by distorting the normal functioning of the marketplace, controls can stifle innovation, lead to shortages, require an enormous bureaucracy to enforce – and often backfire by causing prices to zoom up once the lid is lifted.” The wage and price controls of the Nixon administration, as well as the failings of the Communist governments proved this to be the case, and it amazes me our country fails to learn from even our recent history.