Massachusetts goes for rationing? Update: Incentivizing profit over care?
posted at 12:15 pm on October 12, 2009 by Ed Morrissey
The Massachusetts adventure in health-care reform will take an entirely predictable turn in the near future, say providers within the network. The state panel intends to dictate a narrower network of providers for some insurance plans, which providers insist will result in a reduction of services to patients in hospitals and clinics. Massachusetts wants its citizens to choose second-tier hospitals and clinics to save costs, and plans to eliminate choice as a means to that end (via Instapundit):
The state’s ambitious plan to shake up how providers are paid could have a hidden price for patients: Controlling Massachusetts’ soaring medical costs, many health care leaders believe, may require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want.
Efforts to keep patients in a defined provider network, or direct them to lower-cost hospitals could be unpopular, especially in a state where more than 40 percent of hospital care is provided in expensive academic medical centers and where many insurance policies allow patients access to large numbers of providers.
But a growing number of hospital officials and physician lead ers warn that the new payment system proposed by a state commission would not work without restrictions on where patients receive care – an issue some providers say the commission and the Patrick administration have glossed over.
“You can’t reap these savings without limiting patients’ choices in some way,’’ said Paul Levy, chief executive of Beth Israel Deaconess Medical Center. “It’s a huge issue, it’s huge.’’ Dr. James Mongan, president of Partners HealthCare, a Beth Israel Deaconess competitor, agreed that it wouldn’t “work without some restriction on choice.’’
Remember this every time Barack Obama and Democrats insist that we can keep our doctors and our hospitals if we like them, or that ObamaCare will not limit patient choice. The end result of state intervention and price fixing is always higher costs, followed by rationing. Insurance companies at least have competitive pressures keeping them efficient, but when prices get fixed by the state, that efficiency goes out the window. As costs escalate, the state intervenes in other ways to keep subsidies from skyrocketing, and this is the inevitable result.
The other option is to cut payments to the premier hospitals, which will force them to take fewer patients. The result of that approach will be very easy to predict. The best hospitals will take primarily those patients who can afford to pay their premium prices, leaving the poor and middle-class patients to get treated elsewhere. It will stratify health care much more than before Massachusetts enacted its “reforms”, giving the rich almost exclusive access to the best care. And thanks to lousy compensation rates, fewer new providers will be around to meet the new demand in second-tier care, meaning much longer wait times for the poor and middle-class patients.
This is a microcosm of what we can expect on a national basis if ObamaCare gets enacted. Will the media start reporting this in that context?
Update: Paul Hsieh, a physician himself, notes the curious incentive being applied by Massachusetts:
What the supporters don’t mention is that it also creates a tremendous incentive for physicians and hospitals to render as little care as possible. Under the Massachusetts proposal, if your care costs less than the annual allotment, then they keep the unused portion. If your care costs more, then the difference comes out of the providers’ pockets. Such a system thus pits your doctor’s interests against your own.
For the sake of argument, suppose your annual allotment is $5000 and you’ve already spent $4500 for that year. Now you go to your doctor’s office complaining of a severe headache. He examines you and says, “No, Bill, you don’t need a $1000 MRI scan of your brain. Just take two Tylenol and call me in the morning”.
Will you be 100% sure that he’s giving you unbiased medical advice?
And even if your doctor consistently and conscientiously acts for his patients’ best interests, he will inevitably find himself at odds with hospital administrators questioning whether this or that expenditure is appropriate[.]
Read the whole post.