AP, NYT again show how ObamaCare backfires as reform

posted at 2:55 pm on April 4, 2011 by Ed Morrissey

Just in case anyone has forgotten, the Associated Press and New York Times ran stories this weekend on how the new ObamaCare law distorts incentives and backfires in the effort to truly reform health-care costs.  We’ll start with the AP, which looked into the novel innovation among doctors that creates de facto health insurance plans, based on the model used by law firms and retainers.  That allows the wealthy to ensure access while locking out others, especially Medicare patients whose reimbursements don’t cover the costs of care:

Every year, thousands of people make a deal with their doctor: I’ll pay you a fixed annual fee, whether or not I need your services, and in return you’ll see me the day I call, remember who I am and what ails me, and give me your undivided attention.

But this arrangement potentially poses a big threat to Medicare and to the new world of medical care envisioned under President Barack Obama’s health overhaul.

The spread of “concierge medicine,” where doctors limit their practice to patients who pay a fee of about $1,500 a year, could drive a wedge among the insured. Eventually, people unable to afford the retainer might find themselves stuck on a lower tier, facing less time with doctors and longer waits.

Medicare recipients, who account for a big share of patients in doctors’ offices, are the most vulnerable. The program’s financial troubles are causing doctors to reassess their participation. But the impact could be broader because primary care doctors are in short supply and the health law will bring in more than 30 million newly insured patients.

Most doctors negotiate fees with larger insurers based on volume they expect to receive from being part of a network.  If the government starts dictating terms between insurers and providers, as will have to happen with the state-run “exchanges” and the blizzard of coverage and cost mandates imposed in the individual-policy market, they will have much less negotiating room.  The retainer structure allows them to guarantee a certain level of income, and patients with the means to guarantee access and timely care.

The AP is confused about Medicare and Medicaid in this piece; it’s the latter that adds 30 million enrollees, not the former.  But the impact on provider access is the same, or even worse.  That is a direct consequence of adding demand while artificially keeping prices low, a situation that guarantees shortages.  Instead of increasing clinic care and improving health, the new law will paradoxically send more patients to emergency rooms instead, increasing actual costs.

The NYT gets the difference between Medicare and Medicaid correct in its article, and explains that the flood of new enrollees will likely mean less care and more problems:

Eight-year-old Draven Smith was expelled from school last year for disruptive behavior, and he is being expelled again this year. But his mother and his pediatrician cannot find a mental health specialist to treat him because he is on Medicaid, and the program, which provides health coverage for the poor, pays doctors so little that many refuse to take its patients.

The problem is common here and across the country, especially as states, scrambling to balance their budgets, look for cuts in Medicaid, which is one of their biggest expenditures. And it presents the Obama administration with a major challenge, since the new federal health care law relies heavily on Medicaid to cover many people who now lackhealth insurance.

“Having a Medicaid card in no way assures access to care,” said Dr. James B. Aiken, an emergency physician in New Orleans.

Why?  Because Medicaid’s reimbursements to providers are so unrealistically low that providers can’t afford to take on many Medicaid patients.  For those that do, doctors shift costs to private insurance by keeping their rates higher than necessary where they know they can collect.  As ObamaCare crowds out insurers, providers will lose the ability to recoup those losses, and they will instead refuse to take Medicare and Medicaid patients altogether.

But hey, the news isn’t all bad.  ObamaCare has helped one industry in particular:

From Washington to California, the year-old health law, with its layers of complexity, is setting off a gold rush for high-priced lawyers and consultants. It’s “a full employment act for health-care consultants,” said Ian Morrison, a founding partner of Strategic Health Perspectives in Menlo Park, Calif.

Much of the activity — and the prospect of glitteringly high fees — is swirling around a widely discussed provision that encourages doctors, hospitals and insurers to team up in treating patients. Initially, these “accountable care organizations,” as envisioned in the law, will treat only Medicare patients, and will get bonuses for providing better care at lower cost. But if they work, ACOs will likely spread to private patients as well. …

Lobbyists, lawyers and consultants are holding frequent ACO conferences — and finding them oversubscribed. Some consultants are charging from $25,000 for a day of strategy sessions to $1 million to actually implement the strategy.

Gorman Health Group, a 150-person consultant firm based in Washington, charges $25,000 to $100,000 for an ACO strategy, which is usually done in conjunction with other work, said founder John Gorman, who was a Medicare official in the Clinton administration. Among the topics discussed: whether the health system has to make major cultural changes to become an ACO.

The Camden Group charges about $30,000 to $100,000 to advise health systems on how to get ready to become an ACO, said Steve Valentine, the firm’s president.

Lady Logician concludes:

This is what happens when you pass a 2000+ piece of legislation that you have to “pass in order to know what’s in it”…a piece of poorly written legislation filled with bad execution and good intentions.  It is time to scrap the ObamaCare and start over – with real reforms that do not demonize service providers…a bill that takes care of those in real need while making sure that those needs can be met tomorrow and into the next century.

We need to eliminate third-party payer systems, not entrench them.  ObamaCare took a leap into the exact wrong direction, and the longer we wait to repeal it, the tougher it will be to provide for real reform.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

It might be better to travel to Canada for health-care in a few years.
Thanks Obama.

Electrongod on April 4, 2011 at 2:59 PM

No wonder the emergency rooms are so busy.

fourdeucer on April 4, 2011 at 3:00 PM

Count it!

/crr6

fossten on April 4, 2011 at 3:01 PM

But hey, the news isn’t all bad. ObamaCare has helped one industry in particular:

From Washington to California, the year-old health law, with its layers of complexity, is setting off a gold rush for high-priced lawyers and consultants.

Let’s all remember this the next time Crr6 shows up here shilling for it.

Kataklysmic on April 4, 2011 at 3:01 PM

Looks like I picked the wrong week to give up health-care consultanting…

Seven Percent Solution on April 4, 2011 at 3:03 PM

Where do Ed and AP find this endless procession of photographs of smugly smiling lefties?

Chuckles3 on April 4, 2011 at 3:04 PM

Every Republican candidate in 2012 should run on a platform that they will given every single American an Obamacare waiver who asks for one. Letting every American opt out would destroy the program and essentially repeal Obamacare without the necessity of any action from congress.

tommyboy on April 4, 2011 at 3:05 PM

Doesn’t the commerce clause or something require doctors to see these patients?
Where is crr6 to enlighten us?

Aviator on April 4, 2011 at 3:06 PM

So the NY Times finally started to ask questions and are only now finding out the answers aren’t good?

*Facedesk*

Yakko77 on April 4, 2011 at 3:06 PM

You do know what the next step will be? the dems will try to pass a law forcing all doctors to accept all medicare / medicaid patients. It will become “discrimination” to turn away people on medicare or medicaid. Thus will doctors become enslaved to gov’t.

You see, the problem isn’t with the third-party payer system, or gov’t regulations distorting markets. No. The problem is the evil, greedy doctors who do unecessary tonselectimies (spelling?) just to make money. If we just put a legal cap on what they could charge and make it the law that they have to take every patient that comes through the doors, problem solved!!

Monkeytoe on April 4, 2011 at 3:07 PM

easy fix: Obama orders the taxpayers to pay the full medical education costs of thousands of doctors who are then ordered to work forever wherever and for whatever pay Obamacare dictates.

LASue on April 4, 2011 at 3:08 PM

Sebelius / Berwick 2012 & beyond…

mjbrooks3 on April 4, 2011 at 3:08 PM

Asked a new tea party congressman on Saturday what the plan for dealing with ObamaCare was, and he said that the best opportunity to defund it was during the debt ceiling debate. I have no reason to doubt that he isn’t trying and knows the importance of the issue, but my gosh this is frustrating! It’s like trying to slap someone under water- it doesn’t matter how much force you put into it, there just is no impact.

parteagirl on April 4, 2011 at 3:12 PM

“AP, NYT again show how ObamaCare backfires as reform”

This NYT…?

Seven Percent Solution on April 4, 2011 at 3:13 PM

Obamacare is a “great” reason for B.O. to try to justify his reelection (in his fantasy world).
Love his reelection slogan: “Are you in?”…….
….hello……..Hello?….anyone there?….

3dpuzzman on April 4, 2011 at 3:13 PM

Doesn’t the commerce clause or something require doctors to see these patients?
Where is crr6 to enlighten us?

Aviator on April 4, 2011 at 3:06 PM

Obviously. After all, turning a patient away effects interstate commerce. Just like not buying something effects interstate commerce. And breathing effects interstate commerce.

Dating effects interstate commerce. After all, what do people do on dates? They spend money – go to dinner, teh movies, or something similar. Thus, the gov’t has a rational basis to regulate dating. The gov’t will issue guidelines classifying everyone on a 10 point scale, and nobody will be allowed to date up or down more than 1 point. And, there will be minimum amounts that must be spent on every date. And, there will be a 10 part test as to whether the date ends in intercourse.

If intercourse occurs, the gov’t will have to regulate whether or not there is offspring, as childbirth effects interstate commmerce (think of all the money spent on doctors, hospitals, gifts, getting the home ready) and a potential new person effects interstate commerce (after all, it will be a new consumer). Thus, pursuant to the commerce clause, the gov’t has the right to issue regulations tightly controlling these activities.

Any child born without the proper permits and authorizations automatically becomes property of the state under the authority of the commerce clause.

Monkeytoe on April 4, 2011 at 3:13 PM

Is that poney-tailed dude [doctor?] in that picture the same one that asked slick willie how he was going to take care of him?

lukespapa on April 4, 2011 at 3:16 PM

Monkeytoe on April 4, 2011 at 3:13 PM

Pretty much.

Aviator on April 4, 2011 at 3:16 PM

I’m not worried; carefree and easy, that’s just how I roll.
http://www.youtube.com/watch?v=rkH_aaaSOP0&NR=1

a capella on April 4, 2011 at 3:19 PM

With all due respect to Lady Logician, there was never any ‘good intentions’ with respect to the formulation and passage of Obamacare.

eaglewingz08 on April 4, 2011 at 3:22 PM

So the NY Times finally started to ask questions and are only now finding out the answers aren’t good?

Yakko77 on April 4, 2011 at 3:06 PM

Well, after all, they are the paper of record don’t ya know.

Kafir on April 4, 2011 at 3:23 PM

Has anyone found 1 good thing in this bill?

docflash on April 4, 2011 at 3:23 PM

Monkeytoe on April 4, 2011 at 3:13 PM

Don’t give them any ideas. The sad thing is, you are right, the way that they are applying the Commerce Clause, they could just as easily regulate and control dating and procreation.

iurockhead on April 4, 2011 at 3:25 PM

Doctors will leave the US
Instead of coming here.

Making it even worse…..

tomg51 on April 4, 2011 at 3:28 PM

Where do Ed and AP find this endless procession of photographs of smugly smiling lefties?

Chuckles3 on April 4, 2011 at 3:04 PM

It’s simple.

Go to Bing and type in “Douche Nozzle”.

Bang …….. take your pick.

oldfiveanddimer on April 4, 2011 at 3:30 PM

Aviator on April 4, 2011 at 3:06 PM

Either licking their wounds after realizing they’re but another pawn in the game of Dems, (which is doubtful) or getting newer and better marching orders from their masters.

capejasmine on April 4, 2011 at 3:31 PM

It might be better to travel to Canada for health-care in a few years.
Thanks Obama.

Electrongod on April 4, 2011 at 2:59 PM

Nah. We’ll be traveling to Mexico.

And to think, Obama solves our immigration problem of people coming here (in part for good health care) by assuring that health care is no longer available.

Pretty soon, the only private (and reliable) medical practices in the Northern American Continent will be in Mexico.

I don’t know if I should be elated or shaking in terror at the possiblity.

Lawrence on April 4, 2011 at 3:31 PM

Don’t give them any ideas. The sad thing is, you are right, the way that they are applying the Commerce Clause, they could just as easily regulate and control dating and procreation.

iurockhead on April 4, 2011 at 3:25 PM

I think a few pages in Obama care address this very issue, maybe not in these terms, the the consequences are similar.

Lawrence on April 4, 2011 at 3:34 PM

Oh no, there’s that greasy hippie in the lab coat again.

james23 on April 4, 2011 at 3:36 PM

You can always spot a doctor in a crowd since they always wear their lab coats.

Wait was that just for a photo op?

esnap on April 4, 2011 at 3:38 PM

Related: CBO on Medicare – “We need a Death Panel”

Under such an approach, patients would be able to use their own money to pay for the more expensive care

For now anyway, as Dr. Rich has explained:

Now that President Obama’s healthcare reform has become the law of the land, it is time for us to prepare ourselves for the real fight. Namely, will individual Americans ultimately be restrained, by law or by subterfuge, from using their own resources to pay for their own medical care?

Rae on April 4, 2011 at 3:44 PM

Every Republican candidate in 2012 should run on a platform that they will given every single American an Obamacare waiver who asks for one. Letting every American opt out would destroy the program and essentially repeal Obamacare without the necessity of any action from congress.

tommyboy on April 4, 2011 at 3:05 PM

Love it!!!

GrannyDee on April 4, 2011 at 3:45 PM

No! let’s keep it. I’m serious.

Let’s keep it and when the “O” gets re-elected he’ll be around and still President when in 2013, this abomination REALLY comes to force.

Then, when it proves to destroy the health system and really reveals itself to be the major mutated mess it is, NO ONE can be blamed but this rookie and his socialist dems!

Let them OWN IT!

Opposite Day on April 4, 2011 at 3:52 PM

So a bunch of politicians and lawyers who have never had a job outside the Beltway f’d up a takeover of 20% of the economy by a innumerable cadre of bureaucrats and bureaucracies? Jeez. Who saw that coming?

When I said I didn’t think ObamaCare should pass, people looked at me like I was really mean because I didn’t want my costs to go up so the government could provide health insurance to 30 million Mexicans.

No, I tried to explain, although I don’t want to provide medical care for people who won’t pay for their own, the problem with a takeover by government of trillions of dollars worth of commercial transactions is that a) even were the legislators competent to actually design something that might work, b) the opportunity for fraud and abuse is immense and c) the government “friction” of having to pay for a myriad agencies, programs and whatever other names bureaucrats use for “wasting taxpayer money”, will far outweigh any possible benefits that may accrue. It defies my imagination how anybody in their right mind could have thought this would work — it’s so improbable that there is no conclusion other than that ObamaCare is a thinly-disguised effort to deliberately ruin our healthcare system, just as our current “energy policies” are a deliberate effort to sabotage our industry, economy and standard of living. It is no longer believable that it is simply vast incompetence and stupidity that are the source of these destructive policies. It just can’t be.

mr.blacksheep on April 4, 2011 at 3:52 PM

My head is going to explode. My son, a 26 year old quad and total care, is being turned over to a physician’s assistant (he is on Medicaid because of his disability.) If we did not keep private health insurance on him, in addition to his Medicaid, he wouldn’t even be able to find a physician’s assistant.

I have a friend who’s doctor retired recently (part of a huge group). My friend was told there were no doctors in the group taking new patients and he had to go out a find a new doctor. I told him it was because he was 63 and they did not want anymore Medicare patients in the group because of Obamacare.

bopbottle on April 4, 2011 at 4:11 PM

States will solve this problem easily. Any doctor who doesn’t accept Medicare/Medicaid/SCHIP will not have their licence renewed. It’s coming.

angryed on April 4, 2011 at 4:13 PM

Doctors will leave the US
Instead of coming here.

Making it even worse…..

tomg51 on April 4, 2011 at 3:28 PM

I’ve been saying this as well. Doctors will go to offshroe locations and practice medicine as a cash business. I predict The Bahamas will become a booming medical destination.

And the thing is were insurance and the govt take out of medicine completely, it wouldn’t be that expensive. That $5000 operation that hospitals charge would cost $1000. The extra $4K is to pay for the administration costs involved with going through insurance, Medicare, medicaid and the thousands of laws applicable in each state.

angryed on April 4, 2011 at 4:19 PM

Obamacare will make medicine “work” just like education. Those with the money will pay twice, just to get a good outcome. Those without money will get screwed.

hawksruleva on April 4, 2011 at 4:24 PM

States will solve this problem easily. Any doctor who doesn’t accept Medicare/Medicaid/SCHIP will not have their licence renewed. It’s coming.

angryed on April 4, 2011 at 4:13 PM

The absence of medical professionals will certainly drive down costs eventually. If you can’t get anyone to do the surgery, you can’t spend the money.

hawksruleva on April 4, 2011 at 4:27 PM

Obviously. After all, turning a patient away effects interstate commerce. Just like not buying something effects interstate commerce. And breathing effects interstate commerce.

Monkeytoe on April 4, 2011 at 3:13 PM

I honestly wonder what it will take to move America back to a position where government isn’t allowed unfettered access to interfere with everything. This generation has unique tools that should allow us to eliminate government oversight in favor of private oversight. Imagine if residents around a factory were responsible for knowing what was going on there instead of some bureaucrats in Washington. That’s how the Founders intended America to work.

hawksruleva on April 4, 2011 at 4:34 PM

@ 1 month ago I fell and hurt my elbow. The next morning I started calling my doctors office at 9am. After getting nowhere by 9:45am I got in the car and went to the emergency room. I paid $75 vs. a $20 doctor office visit, but saved so much in frustration. How long can you argue with a receptionist at the doctor office over “I want to get an x-ray of my elbow today”? She was over-whelmed, the doctors didn’t have any availability that whole week, and she couldn’t even tell me how to go about getting an x-ray appointment setup. Finally the receptionist agreed with me, go ahead to the emergency room for your x-ray.

But I thought Obamacare would save us from the problem of people going to the emergency room instead of going to see a doctor? Good luck getting an appointment to your doctor. I had to wait over 4 months last year to get a physical.

Actually it seems like they are getting the people with no insurance out of the emergency rooms, and replacing them with those with insurance who gave up trying to see their regular doctors. Again it was a good tradeoff for me. I paid the $75 and was at work by noon.

shanimal on April 4, 2011 at 4:40 PM

Opposite Day on April 4, 2011 at 3:52 PM

No thanks.
If I want to prove your gun is loaded, I’m not going to point it at my head and pull the trigger.

VelvetElvis on April 4, 2011 at 4:42 PM

Whaddya expect for nuthing? A rubber biscuit?

AH_C on April 4, 2011 at 4:56 PM

We are considering retaining a concierge doctor in my city. He will do house calls, get us into see specialists or the ER quickly if there is an emergency. He is available 24/7. The downside is that his fee is upwards to $3500 per year per family, although I understand it is negotiable to some extent. That fee includes all well-child visits, annual exams, mammograms, bloodwork, etc.
Pretty good, if you ask me.

pullingmyhairout on April 4, 2011 at 5:05 PM

ObamaCare was DESIGNED to fail! Unfortunately for the Democrats, they expected to pick up the pieces and move right into THE PUBIC OPTION. Elections have consequences.

GarandFan on April 4, 2011 at 5:34 PM

My favorite part of the immediate implementation was the consumer cost saving act of disallowing OTC medications from being bought with FSA accounts. That is saving me so much money I don’t know what to do with it.

/sarc

kerncon on April 4, 2011 at 5:42 PM

The basic assumption is wrong. When the waivers end more people will go without insurance as those companies, states, etc, choose to drop coverage. In 2 years the number of people without insurance will double.

oldman13 on April 4, 2011 at 5:44 PM

Defund… repeal… replace…

Khun Joe on April 4, 2011 at 6:11 PM

The basic assumption is wrong. When the waivers end more people will go without insurance as those companies, states, etc, choose to drop coverage. In 2 years the number of people without insurance will double.

oldman13 on April 4, 2011 at 5:44 PM

I have been saying the same thing. Under Obamacare, the uninsured numbers will go up. Heck, I may drop my insurance and then pick it up when I get sick. Why pay a premium while I am healthy.

bopbottle on April 4, 2011 at 7:22 PM

I hate to say I told you so, but… None of this is a surprise. It was by design. That is the sickening part.

txmomof6 on April 4, 2011 at 7:55 PM

Repeal what? Its already been ruled unconstitutional.

CriticalUpdate on April 4, 2011 at 10:44 PM

AP, NYT again show how ObamaCare backfires as reform

“Whom the gods would destroy, they first make Democrats.” Eubreakidis Euownidis

Dr. Charles G. Waugh on April 4, 2011 at 11:25 PM