Obamacare

Obamacare Finds Its Cost Savings — Stop Paying Doctors

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President Obama
White House

As Peter Suderman noted, the Obama administration is simultaneously pushing for Medicaid expansion and arguing that states should be allowed to reduce reimbursement to providers as a means of controlling costs in the bloated program. This comes even as Medicaid is already struggling to find providers willing to see patients — with low compensation cited as a major reason for the shortage.

The Obama administration's argument for reducing reimbursements for providers who see Medicaid patients was made very succinctly in a California courtroom:

"There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs."

The administration makes its argument in a case challenging California's decision to reduce Medicaid reimbursements by 10 percent. Note that if you don't reimburse sellers of goods and services for "all or substantially all of their costs" you are presumptively asking them to lose money on the deal. Unsurprisingly to everybody except government officials, providers tend to stop providing under such circumstances, if only to avoid bankruptcy, or else because they're going through it.

As it happens, California already has a shortage of willing providers, and is looking at expanding the roles of nurse practitioners, pharmacists and other medical practitioners to try to fill the gap. But there's no particular reason to think that other providers are more prone to financial martyrdom than are physicians. They have to cover their costs, too.

The problem isn't confined to California. A study published October 12 in the American Journal of Medical Quality found that the ranks of "safety-net physicians" — those willing to see Medicaid and uninsured patients — appears to be at its limit under current circumstances.

The senior author of the study, Eric G. Campbell, PhD, of the Mongan Institute, commented, "This study raises very serious concerns about the willingness and ability of primary care providers to cope with the increased demand for services that will result from the ACA."

And why are those ranks so strained? As I wrote a few weeks ago:

Last year, a Physicians Foundation survey found that 26 percent of physicians had closed their practices to Medicaid patients because of concerns over compensation and red tape. Kaiser says the number of doctors turning away Medicaid patients is closer to a third.  Pharmacists haven't been much happier. Walgreens pharmacies in Washington turned away Medicaid prescriptions because they were losing money filling them (the state relented) and pharmacies did the same in Delaware.

It's hard to see what the administration's end game is here. Even if you buy the conspiracy theory that Obamacare is meant to fail in order to pave the way for some full-blown single-payer health system, based, no doubt, on the thriving French system, there's no road there from here. An entirely government-controlled healthcare system would resemble Medicaid/Medicare writ large. And the Obama administration envisions cuts to Medicare, too, especially in terms of compensation to hospitals. That linked Washington Post article may insist that the proposed cut "does not, however, change the basket of benefits that patients have access to," but it's unclear just who will provide those benefits if they're not being paid.

Deciding not to pay for stuff is a great way to reduce your expenses — unless you actually need that stuff.

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68 responses to “Obamacare Finds Its Cost Savings — Stop Paying Doctors

  1. I was kidding about enslaving doctors being the solution to the healthcare cost problem.

    1. Obama wasn’t…

    2. Not slavery! Obama will just punch them in the face once or twice.

      1. Something tells me that it wouldn’t hurt that much.

        1. He’ll get Rahm to mete out the violence for him. It still will not hurt much.

      2. It’s not slavery, it’s a penaltax.

    3. Obama will probably come out and say we need to do the right thing and pay the doctors for their service, but in order to do that, we need to ask the wealthiest Americans to pay a little bit more.

      What he won’t say is that govt programs have made health care so expensive that the middle class can’t afford it without being subsidized by the rich. This solidifies dependency on the govt to make that happen. that’s why the program won’t be cut. you can’t expect politicians to cut the source of their power.

      1. Well, the cap at which a family of four can receive subsidies is $50,000, which is not much. I think a LOT of people are going to be surprised when they find out they aren’t eligible for subsidies or that the subsidies don’t come close to making up for the increase in premiums they are paying because of community rating.

        People in their 20s and 30s are going to see their rates go way up, which is going to cut into their disposable income, and their ability to buy a house, which are two huge impacts on the economy. Community rating is actually a massive stealth tax on young working professionals. The same people who are already swamped in student loan debt.

    4. Perhaps the doctors will find Happiness in Slavery.

    5. Good old Ronnie pointed this out years ago in his “A time for choosing” speech.

  2. “There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs.”

    I remember once making the argument that if you make healthcare a right, you are basically saying that doctors are obligated to provide it, whether they are compensated or not. It was all very abstract and nobody found it very persuasive. The universe, as usual, has a very sick sense of humor.

    1. And they wonder why doctors don’t take Medicare or Medicaid anymore. What a mystery.

      1. Fucking incentives, how do they work?

    2. Like I’ve said many times, the 13th Amendment doesn’t prevent us from enslaving criminals. So all you have to do is make doctors criminals.

      1. Illigalize turning away Medicare/Medicaid patients. Boom, criminal doctors.

        1. That’s too harsh. Pass a law requiring doctors to buy Chevy Volts and give them an exemption if they accept Medicaid patients.

          1. If you give exemptions, then no slave doctors to provide everyone with free healthcare.

            While we’re at it, I suppose we’ll have to enslave pharmacists and people who build and operate medical equipment as well.

            1. We should probably just enslave everyone. Just in case.

              1. If you look hard enough, we’ve all broken one law or another at some point and not been tried or convicted for it.

              2. Well, everyone but black people. And women. Really, any historically oppressed minority. Unless they are doctors or any other profession we need free services from.

            2. Are you suggesting that Obama would violate a constitutional amendment?

  3. It’s hard to see what the administration’s end game is here.

    Perhaps the end game is exactly what it looks like: there is no plan for an end game. Using the idea of revealed preference, I’d guess that the thugs in the administration don’t really care what happens more than two or three years down the road.

    1. But that would imply that the only thing they cared about was getting (re)elected.

      1. and looting the treasury is always attractive for sociopaths

    2. Progressives are sort of known for having no idea how economics works.

      I think they honestly believe that they can cut reimbursement rates, and everything will continue exactly as before.

      Just like they think that they can raise the minimum wage, and nobody will hire fewer workers. Or that prices can go up and consumers won’t notice the difference.

      Marginal effects don’t exist in progresso-land.

  4. It’s amazing how many doctors want Obama to fail.

    1. You’ve got that right. Physician-only discussion board website Sermo is at least 80% against Obamacare.

  5. “Even if you buy the conspiracy theory that Obamacare is meant to fail in order to pave the way for some full-blown single-payer health system…”

    It may be a conspiracy theory, but it sure makes more sense than believing that PPACA’s proponents actually thought that their 2700 page legislation would work. Obama and Pelosi are ideologically motivated; they aren’t stupid.

    1. “Obama and Pelosi are ideologically motivated; they aren’t stupid.”

      I know the first part of that sentence is correct. I’m not so sure about the second.

      Of course it’s also possible that they are both.

    2. Any coherent plan that one could imagine being behind this administration’s behavior has to be a conspiracy theory, because they contradict each other so much. Either it’s total chaos or something secret’s going on.

    3. Yes, they are stupid.

      They really, really, believe that government can command the economy, and it will work exactly as the government says.

      I’m serious. They actually think that.

      1. no…they’re not stupid but they believe enough of us are so that these ideas with foreseeable consequences are not just left in place, but championed by a big chunk of the masses. The Obama/Nancy nexus is worse that stupid; it is evil.

  6. As it happens, California already has a shortage of willing providers, and is looking at expanding the roles of nurse practitioners, pharmacists and other medical practitioners to try to fill the gap.

    “A planet where medical care is subject to the Law of Scarcity and the Law of Opportunity Cost?”

  7. Man that jsut makes a ll kinds of crazy sense dude. Wow.

    http://www.NetAnon.da.bz

  8. It’s kind of ironic isn’t it?

    A plan that was designed to bring healthcare to the masses makes it even more of a privilege of the well off.

    Plus seeing some of these high ball numbers thrown around for the actual costs of insurance plans. It makes me wonder if many of these people have even tried finding quotes for insurance rather than just bitching about how they can’t afford it.

    $500 for high deductible insurance? Please… Maybe after full implementation of Obamacare but certainly not already.

    1. To some people $2,000 / year for a family of four counts as a “high deductible”.

      (That is the “Bronze plan” limit).

      Actual high-deductible plans are illegal under ObamaCare.

  9. If they don’t start issuing mandates, Medicaid will likely kill itself due to lack of providers. I wouldn’t have a problem with that outcome.

  10. “Note that if you don’t reimburse sellers of goods and services for “all or substantially all of their costs” you are presumptively asking them to lose money on the deal.”

    They’ll make it up in volume?

    Incidentally, I remember when the Obama Administration and their cronies in Congress realized that it would be cheaper to expand Medicaid than give people money to buy their own insurance–since Medicaid only reimburses providers for a fraction of the charges Medicaid patients rack up.

    In other words, this was seen as a feature and not a bug.

    In addition to whatever else you think about the Obama Administration, always remember that they are also incompetent. This was as predictable as the sunrise. Talking to the Obama Administration’s supporters at the time about the economics of ObamaCare was like talking to fundamentalists about evolution…

    How do you know that will happen–before it happens? How do you know? As if the consequences of reimbursing providers for less than their costs were somehow unpredictable.

  11. “As if the consequences of reimbursing providers for less than their costs were somehow unpredictable.”

    Gee, I wonder if they’ll make up for it by gouging insurers and the uninsured?

    …or maybe the nurses, hospital suppliers, doctors, and other employees will stop being so selfish–and start working for free?

    How could we let somebody so stupid make decisions that affect our lives?

    1. Stupid elects stupid.

      1. Yeah, it’s our fault.

        1. Speak for yourself, I didn’t vote at all.

          1. But Hugh, that’s the moral and effective equivalent of voting for the other guy!

          2. You should have convinced more of your fellow Americans not to vote…

            It’s all Akston’s fault!

  12. Whatever. Doctors are the property of the state, anyway. You’d all know this if only you’d bother to read your Social Contracts.

    1. Yeah the least you could do is read it!

      We did all the hard work by signing it for you!

    2. We’re ALL the property of society Skeptic Guy.

      A cow shat in your ancestors farm 8,000 years ago about now you’re rich. Pay me.

      1. We’ll just call it even for the reparations you owe me from your ancestors owning my greatgreatgreatgreatgreatgreat grand-pappy as a slave in ancient Sumeria.

        1. But we’re all interdependent Skeptic Guy. We are ONE.

          Why should just SHARE. Why do you hate sharing?

  13. “I’m a doctor, Jim.” – Obi Wan Kenobi

    1. These are not the dilithium crystals you are looking for.

  14. I foresee a scheme where doctors and other professionals will be able to do community service in lieu of a DUI/possession/over-prescribing conviction. They’ll be required to service government dependents at state run hospitals.

    1. Or Uncle Sam offers tuition forgiveness to doctors who agree to serve for 10 years in a state-owned and operated facility.

    2. I foresee all hospitals/clinics being state run and the Docs as state employees. I also foresee the quality of medical care taking a precipitous nosedive.

      1. Ya but my method is way more ripe for abuse and statist over-reach with less over sight. Not to mention lots of bureaucracy empire building opportunities at the city/county level.

  15. Consider what it would be like if Obama could operate with impunity and accomplish all of his goals.

    A disarmed populace ravaged by crime and the entire country resembling Detroit. Essentially all healthcare being provided underground while actual hospitals are staffed 100% by bureaucrats, unionized of course.
    Anyone with any money or able to produce going Galt. Need I go on? I know these are the results of his policies because all of it has been tried before.

    Who looks at this shitbag and sees a worthy public servant? Who could possibly consider his goals worthy? He is nothing but a looter and this nightmare we are living through is straight out of AS. I guess Rand shook her head in disapproval and rolled over in her grave.

  16. Here is how this plays out.

    1. Doctors stop accepting Medicare patients.
    2. Congress passes a law saying they have to treat medicare patients, regardless of how much they get reimbursed.
    3a. Law is declared unconstitutional under prohibition on forced labor.
    4a. Congress puts reimbursement rates back where they were. Effect: NIL. Medicare spending continues on it’s insane upward trajectory.
    3b. Law is upheld under some idiotic commerce clause interpretation. (it’s a TAX!)
    4b. People stop becoming doctors. Massive doctors shortage takes care of the problem. If they don’t exist, they can’t treat you.
    Effect: Health care goes to shit for everyone.

    1. You forgot 5. It is all Bush’s/Republican’s fault.

      1. They’ll be blaming Bush when my grandkid’s grandkid is having trouble with his student loans.

      2. It’s a market failure.

        I hate the way the market doesn’t just create free shit for people.
        Fucking price mechanism, how does it work?

        This money thing is so unclean. Why can’t everything just not be contaminated by the disgusting impurity of commerce?

    2. Solution: draft people into med school!

      1. Their solution, really, isn’t much different from that. It’s just that instead of drafting people into medical school, they’re drafting people into buying insurance.

        This is why it’s necessary to force, for instance, young people, who generally don’t need and don’t buy health insurance, into the insurance industry’s arms with the individual mandate.

        You make up for all the money providers lose on Medicaid patients by letting them gouge insurance companies–and you make up for all the money insurance companies get (effectively) gouged for by forcing people who rarely use medical insurance to buy it anyway.

        It’s so effed up. It’s worse than paying farmers not to farm to drive up the price of crops–and giving food stamps to single mothers because they can’t afford the price of food.

    3. 3b. Law is upheld under some idiotic commerce clause interpretation. (it’s a TAX!)

      No novel interpretation needed. Price controls have been ruled to be part of the commerce clause since the 1940s. No activity-inactivity issue there either, since you can avoid the regulation by not becoming a doctor.

  17. “It’s hard to see what the administration’s end game is here. Even if you buy the conspiracy theory that Obamacare is meant to fail in order to pave the way for some full-blown single-payer health system, based, no doubt, on the thriving French system, there’s no road there from here. An entirely government-controlled healthcare system would resemble Medicaid/Medicare writ large.”

    Not so hard to see. *All* patients would be in the government plan, and doctors would accept the reimbursement levels of the government, or find a new profession.

  18. Single-payer legal care, complete with boards deciding who has to do general practice law and who gets to do specialty law. Because there’s not one lawyer out there who does anything worth more than minimum wage.

  19. The solution will be the same as it was for public education: lower the bar on professional qualifications until you can find enough people willing to do the job at your supplier-monopoly pay. It’s not like sick people can go get their own medicines.

    Soon, becoming a Medicaid/Medicare certified doctor will just require a couple of anatomy courses, and no graduate training at all. Medicine will be the refuge of students who can’t pass anythng else, just like Education is now.

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