Unbending the Curve

Since the Latino Activist and The Illegals are focused on Armegeddon and the Nazi Holocaust because Illegal mean Illegal.

I want to focus on a real Armageddon coming down the pike, ObamaCare.

IBD:  An analysis from an objective source — Medicare’s actuary — says ObamaCare will increase costs and relies on projected savings that may be unrealistic. Now isn’t that a surprise?

The Obama administration has been trying hard to find good news in a new report by government experts on the outlook for the health care economy, now at 17% of GDP and continuing to climb.

To HHS Secretary Kathleen Sebelius, the analysis confirms that “the Affordable Health Care Act will cover more Americans and strengthen Medicare by cracking down on waste, fraud and abuse.”

More neutral observers will notice that the administration no longer talks about “bending the cost curve” in health care. The analysis released last week by Medicare’s Office of the Actuary tells why. It looks ahead 10 years and reaches two conclusions about the new health care overhaul: More people will be covered, and costs will continue to soar. The cost curve is unbending still.

But since costs wasn’t why The Democrats passed ObamaCare to begin with…

Chief Actuary Richard Foster pegs ObamaCare’s added costs (that is, beyond what was projected without the overhaul in effect) at $311 billion over 10 years. That’s just under 1% of overall expected health care spending, and administration officials are calling that sum a small price to pay for adding 34 million Americans to public or private insurance rolls.

But the president had set a goal of extending coverage without adding any new cost. More to the point, the problem of runaway costs that plagued the pre-overhaul health care system has not been solved. As Foster points out, much of what ObamaCare proposes to reduce the nation’s health tab, especially in Medicare, is politically unrealistic.

The overhaul projects a net decrease in projected Medicare spending (more accurately, a reduction in future spending increases) of more than $400 billion. But Congress has talked this way before and has been notably timid about pulling the trigger.

Under a 1997 law, for instance, a 21% cut in Medicare reimbursements to physicians was supposed to go into effect on April 1. But Congress two weeks later put the cut on hold as part of a bill to extend unemployment benefits. As usual, mobilized doctors and frightened seniors got their way.

This pattern of avoiding politically difficult spending cuts has been going on pretty much since the start of Medicare. ObamaCare promises that this behavior will somehow change. That would be a miracle, and actuaries tend to stick with more mundane probabilities.
And like any good actuary would be, Foster is unimpressed with the cost-reduction side of the ObamaCare equation. He says “the long-term viability of the Medicare … reduction is doubtful.”

Nothing in Foster’s report should come as a surprise, since it was clear from an early stage in the health care debate that the Democratic Party had one overriding goal — universal coverage or something close to it — with cost-reduction secondary.

The cost-cutting promises served mainly to obscure the actual price tag of the overhaul in future taxes and deficits. They were a means to the end of extending insurance, and to that degree they worked — as politics. But as policy they are empty promises.

Foster’s study is further evidence of how badly ObamaCare missed the point. All along, high cost has been the fundamental problem with American health care; the lack of universal coverage was only one symptom. To put it another way, the problem of coverage would have been solved long ago, largely by the private sector, if the medical tab in the U.S. were more like that in other advanced nations.

At 17% of GDP and rising, the nation’s health care economy is a case study in how to structure incentives, price signals (if any) and buying power to maximize inflation. Those who receive services hardly ever pay for them directly, and prices are rarely revealed, much less advertised.

Providers long ago learned the power of lobbying to keep the money rolling in and to defeat any attempts at fiscal restraint. What was billed as “reform,” in other words, actually reformed nothing.

But gave the government the in-road to taking it over completely, which was the plan all along…

And while the full effects of ObamaCare might not be felt until Tax Day 2014, the promise of free health care to millions of Americans will begin to prove hollow long before then.

Already Rep. Henry Waxman, D-Calif., says the public option might not be dead if insurance companies do not offer competitive rates within the exchanges. And Sen. Tom Harkin, D-Iowa, has revived a proposal that gives the secretary of health and human services the power to review premiums and block any rate increase bound to be “unreasonable.”

America’s primary care system is already under stress. Low reimbursement rates, bureaucratic paperwork and long hours are driving family physicians out of medicine and pushing new doctors into specialized practices. Half a century ago, one in two doctors practiced general medicine. Today, 7 in 10 specialize.

And the gap is growing. A mere 1 in 12 medical-school graduates now head to family medicine. In 2009, the American Academy of Family Physicians warned that we’d be short 40,000 family doctors in a decade, if present trends continued. Today, medical schools produce one primary care doctor for every two who are needed.

ObamaCare will add strain to an already burdened system. The new bill seeks to increase the load on family doctors while holding the line on costs by putting price controls on government insurance plans. In due course, price controls on private plans will be inevitable.

We saw them come into effect on April 1 in Massachusetts, when the state Division of Insurance rejected 235 of 274 premium increases proposed by insurers for individuals and small businesses. The rate increases — ranging from 8% to 32% — were deemed excessive.

The combination of increased coverage and emphasis on primary care, experts say, will increase demand for primary care docs by as much as 29%, or 44,000 doctors, over the next 15 years.

But just as demand is increasing, doctors are making plans to exit. A 2009 survey by medical recruiters Merritt Hawkins found that 10% of respondents were planning to leave medicine within three years.

Another poll of physicians conducted in 2009 by Investor’s Business Daily found that 45% of doctors would consider early retirement if ObamaCare passed.

So higher demand and lower supply equals what exactly? 🙂