In Washington, It's Always Opposite Day


Remember that time when trucker hats were cool?

Unintended consequences seem to be the order of the day: In addition to Martin Feldstein's piece positing that health-care reform might actually incentivize people to drop their insurance until they get sick (thus shrinking the risk pool and increasing premiums), former Bush budget official James Capretta has a useful post explaining how the a Medicare payment system originally designed to encourage more doctors to become general practitioners produced the opposite result—and led to the situation we have today, in which Congress is trying to simultaneously fix one major health-care mistake and pass another one:

In the late 1980s and 1990s, the Medicare bureaucracy set out to reform the way physicians are reimbursed for providing services to the program's enrollees. The idea was to shift more resources toward generalists, who were then thought to be undercompensated for spending time with patients, and to control overall costs by limiting the growth of aggregate payments to growth in the size of the U.S. economy. After several years of study, lengthy payment regulations were issued, including a predecessor to the SGR formula, which had immediate and profound financial consequences for nearly every practicing physician in the United States.

And so what happened? The exact opposite of what was intended. Instead of encouraging more physicians to enter into primary care, the Medicare physician-fee schedule has rewarded more specialization. The fee schedule only controls prices, not volume. As Medicare's administrators have tried to hold down costs with fee cuts, specialists increased their share of the pie with more tests and procedures, at the expense of primary-care reimbursement rates. Not surprisingly, the trend of physicians entering specialist practices has accelerated dramatically in the last twenty years. Moreover, overall costs have never been brought under control. With volume soaring, the SGR formula governing annual fee updates has gone completely off the rails. In 2010, fees are supposed to get cut by 21 percent unless Congress overrides it yet again. To secure the AMA's endorsement of their health-care bill, House leaders are planning to scrap the SGR component of the physician fee system altogether, at a cost of more than $200 billion over a decade.

The irony of the situation seems to be lost on House Democrats: Congress is moving to repeal a prime example of health-care central planning run amok while simultaneously extending federal control to every corner of American health care.

NEXT: Ron Paul Running Mates: A Lament

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  1. Yes, but this time they will get it right! Kinda reminds me of the Apple commercial….”Windows 7 is out, and we’ve fixed all the bugs. Trust me.” “That sounds familiar…”

    1. Christ. I thought I escaped the Mac fanbois when I left that computer list I was on for many years. They infest the world more efficiently than any Windows virus and they’re much harder to kill.

      I keep telling them that you have to nuke ’em from orbit. It’s the only way to be sure.

      1. Fuck Windows AND Mac. I’m going Linux.

      2. But JW, how else can you prove your hipster douchebag cred to your technically illiterate friends other than slagging on an operating system that is mostly the same as the one you profess to love? Come on, man. Put yourself in the hipster douchebag’s shoes, and believe what Justin Long tells you. He’s cool, right?

    2. Now if only Apple will fix all of theirs. Except Apple has a tendency to merge the concept of ‘bug’ and ‘feature’ a little too tightly.

  2. Anyone have a good primer that gives a good explanation of why vouchers and charter schools are good and work?

  3. Pro is the opposite to con, so congress is the opposite to progress.

    1. I couldn’t agree more.

  4. This is part of the pattern. Leftists see a problem, they “fix” it then they have to solve the problem caused by the fix.

    It’s like that old Loony Toons in which Daffy puts a mouse in Porky’s hotel room, then charges him for a cat to get rid of the mouse, then charges him for a dog to get rid of the cat and then goes -> lion -> elephant->mouse.

    I laughed out loud when Obama criticized the lack of competition in health care insurance in the states owing to state government barriers to competition. Were does he think the political rationalization for such barriers came from? Oh, yeah, right, a previous generation of leftists utterly convinced that every state government had to micro-regulate insurance companies to “protect” hapless consumers!

    It is increasingly hard to regard leftists as actual mature adults. They can’t seem to discipline themselves either emotionally or intellectually. Each generation invests in a new fantasy while studiously ignoring history. That is not how grownups act.

    1. I see you have met Chad, Tony and Edward/Morris/Lefiti/Sybil.

    2. Seriously though, it reminds me of engineers and mechanics.

      Most mechanics tend not to like engineers because their design was flawed in some way thus requiring the mechanic to fix it.

      However, if the engineer made a perfect design the first time out of the chute, then not only would the engineer not longer be useful since the design requires no future versions but the mechanic would be out of work as well.

      So though he mechanic may resent the imperfect design, the routine maintenance keeps him/her employed while the engineer is continuing to find the optimal design as technology and methods permit.

      And the market of course!

  5. The exact opposite of what was intended.

    This road we’re on seems to be paved with good intentions, and the ride isn’t all that smooth. Hopefull, once we get to our destination, things will be better.

    1. Well, I expect once we get to our destination, things will be warmer, anyway.

      1. “Welcome to La Eternal Damnation, sir. I hope you enjoy the universal health care special tonight. Will that be smoking, fuming, burning or fusing into heavier elemental particles?”

        1. Why is it getting warmer? And why are we in this basket?

  6. Unintended consequences? What are those?

    I’m sure that the War on Inadequate Healthcare will be just as effective as the War On Poverty was:


  7. I hate to tell you guys, but congress’s job is to insure that there are always problems that we need them to fix.

  8. I’m listening to a Federalist Society teleconference right now in which one of the speakers just said that the individual mandate is fundamentally unconstitutional. Commerce clause jurisprudence stands for proposition that there has to be meaningful limit to what Congress can do. Federal gov’t may not exercise general police powers. What’s unique about individual mandate is that one’s very physical existence triggers the regulation, as opposed to some action. Bill would deprive states of any independent constitutional font of authority.

  9. I know that the Supreme Court has said explicitly that the Commerce Clause does not grant the federal government general police powers. Granted, that’s a distinction without a difference given many power-expanding decisions over the last century, but I’m not aware of anything that openly repudiates that position.

    Incidentally, for those who like to throw around “general welfare”, no one takes that seriously who knows anything about constitutional law. You can’t use that to undo the entire explicit purpose of the Constitution–to establish a government with specified, limited powers. Except for some other limited areas where the Constitution is specific about the government’s role, the government needs to be able to fit something like this in under the Commerce Clause, or, in theory, it can’t do it.

    1. Indeed. Somebody on the call just asked about the general welfare clause, and the speaker pretty much said it’s a bullshit basis for an argument that Congress can do this.

      BTW, the speaker is this guy: “Mr. David B. Rivkin, Jr., is a partner in the Washington office of Baker Hostetler LLP, Co-Chairmen of the Center for Law and Counterterrorism at the Foundation for Defense of Democracies, a Visiting Fellow at the Nixon Center, and a Contributing Editor of the National Review magazine. He specializes in regulatory – e.g., energy and environmental matters, export controls, Foreign Corrupt Practices Act, sanctions — and appellate litigation work, with a particular emphasis on complex constitutional, international law and public policy issues. Before returning to the private sector in 1993, Mr. Rivkin served in a variety of legal and policy positions in the Reagan and George H. W. Bush Administrations, including stints at the White House Counsel’s office, Office of the Vice President and the Departments of Justice and Energy. While in the government, he handled a variety of national security and domestic issues, including intelligence oversight, export controls, environmental and energy policy, sanctions, trade and constitutional issues.”

    2. As anyone familiar with the English language (yeah, I’m looking at you, SCOTUS) would readily conclude, the General Welfare clause is not a grant of power, but a limitation on the power to tax. Read and learn (Art. 1, Sec. 8, Clause 1):

      The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

      1. That’s always been my reading of the clause. And everyone else’s that knows crap about the law.

        1. But… but… it’s GENERAL WELFARE! You hate children and want old people to die! Fuck your free-market horseshit! Rich people suck! Except for the Kennedys! We like to use exclamation points!

    3. I think the SCOTUS has established that the Commerce Clause means any damn thing they want, depending which wing on the court has hand at that point in time.

    4. Now, I don’t know much about constitutional law or the definition of “general police powers”, but I have noticed, here of late, that just about any “big” local crime seems to conjure up the FBI and ATF. Hell, what with all the traffic cameras I’d say we just get rid of city and county police and call it done.
      The federalization of the nation continues at a breakneck pace.

    5. Blah blah blah. The Constitution is a Llllllllllllllllllllliving document. Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee………..!!!!!!

      1. More of an undead document.

  10. The fee schedule only controls prices, not volume

    There’s your problem, right there. We’ve got panels councils to deal with that.

  11. The fee schedule only controls prices, not volume

    Thus setting up a learning experience with the First Iron Law:

    1. You get more of what you reward, and less of what you punish.

    Start paying $19.99 for hip replacements, and see how many get done.

    1. It really shows how impossible it is to mix government with the market. Whether or not the gov has a monopoly, nobody has any idea what price to charge because they have very little idea of cost, demand, and no consideration of profit. How do you arrive at a fair price like that?

  12. In July, I hired and employee. Fuck you fake job creators.

    1. Damn lack of preview. “An” employee. Also, did it without receiving any stimulus money. Where is my $100B?

      1. The going rate for a job at last count was only $233,000.

        Just fill out the proper ARRA to get it. But don’t ask for $100B. That’s a felony.

        1. It isn’t a felony if one has the words “Senator” or “Congressman” as a job description…

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