We’re in a health care crisis. Health care is a catastrophe. Costs are out of control. Millions of people can’t get quality health care. According to President Obama, our health care system is broken and it is “breaking America's families.” Only a huge, trillion-plus dollar, 1000-plus page, government-controlled, universal healthcare program can fix it. Only government can bend the cost curve down to pay for it.
It may be a good thing that this is all crap. The stink may wake us up. In fact, it smells so bad that not only should we fire the politicians selling it to us, we should fire the scare-mongering health experts too. They are conning us, again, into lining their pockets. Playing on health fears and lifestyle guilt, they are conning us during economic times when we can least afford to do so.
Common sense says that the best way to make health care more accessible and affordable is to increase the supply of doctors. Currently, the medical establishment artificially restricts that supply by limiting medical school enrollment. Removing this restriction would cost nothing in tax dollars, but would greatly increase the availability and affordability of medical care.
But common sense doesn’t seem to hold much weight these days. Something simple like increasing the supply of doctors not only isn’t the first thing to be tried, it isn’t even part of the Obama Universal Heath Care plan. To reduce costs and keep private insurance companies from screwing us, President Obama and the health experts want "a government-run insurance program, modeled after Medicare.”
As can be seen from the chart below, this is right up there with the Postmaster General wanting to model the postal system after General Motors. Medicare costs have risen from just under $400 per patient in 1970 to almost $10,000 per patient today (with the prescription drug benefit, it would be much higher). In contrast, private sector health care costs have risen to only $7114 per patient. That is, Medicare costs have risen over 34% more than private sector costs.
Medicare is screwing us more than private insurance, but the Obama “public option” will put private insurers out of business. And it gets worse. Universal health care means insuring everyone. Well, almost everyone. You can choose not to participate as long as you pay an annual $2500 fine. Aside from these defiant few, “everyone” is to include an estimated 45.6 million uninsured. Apparently, they think our stupidity is unbounded. While we are sympathetic to the plight of those without health insurance, the Obama plan sets an all-time record for fiscal and actuarial irresponsibility, at least for tail-wagging-the-dog government programs.
Of these 45.6 million, 10 million are illegal aliens and another 10 million are young people (18 – 30 years-old) who choose not to have health insurance. There are millions more who are transiently uninsured or are eligible for existing government programs (e.g., S-Chip and Medicaid), but don’t register for them. The bottom line is that there are only about 15 million people, 5% of the population, who are chronically uninsured. It makes no sense to make the rest of us (253.4 million, 75 -85% of whom are satisfied with the quality of their existing healthcare) pay for the 45.6 million uninsured – especially when it will take $1 trillion and a health care system overhaul to do it. Why not simply buy catastrophic health insurance policies for the 15 million people who may have a legitimate need? That’s chump change in the bizarre world of Obamanomics.
The price of treating 45.6 million new patients will bend the cost curve steeply up. And as individuals and employers shift to the public option (i.e., the Medicare model), the cost curve can be expected to bend further northwards. But such a huge tax burden may be tolerable if the Obama plan would simultaneously bend the performance curve up by an equal or greater amount. So let’s take a look at how it will affect life expectancy (see the figure below).
The first thing to note about this chart is that the relentless upward trend does not reflect a health care system that is broken. If anything, it is indicative of a system that is improving. There is no question that healthcare costs could be reduced and healthcare performance increased, but we’re healthier than ever. What’s the problem? What’s the rush to fix it? A system that has raised average life expectancy from around 65 years in 1942 to almost 78 years in 2000 probably doesn’t need a radical revamping.
Unfortunately, our political leaders don’t see it that way and the Obama plan will bend these curves down sharply, decreasing our longevity! For as ridiculously high as its cost will be, its inevitable rationing will be much more insidious. They won’t call it rationing when benefits are denied or replaced with budget treatments. Terms such as quality-adjusted life years, quality-adjusted years remaining, optimized intervention or treatment redistribution might be used instead, not within patient ear-shot. But there will be rationing. And it will be extensive and dispassionate.
Lawrence Summers, President Obama's chief economic adviser, recently stated,
"But the really important issue for the long run is changing the way in which we deliver health care in this country. You know, there have been a whole set of studies done, they look at health care, the frequency of different procedures, whether it's tonsillectomies or hysterectomies in different parts of the country, and what you see is that in some parts of the country procedures are done three times as frequently and there's no benefit in terms of the health of the population. And by doing the right kind of cost-effectiveness, by making the right kinds of investments and protection, some experts that we--estimate that we could take as much as $700 billion a year out of our health care system."
Total 2008 health care expenditures came to $2.5 trillion. Under Obama’s plan, and with 45.6 million new patients added immediately, these expenditures will be much higher. They will have to take much more than $700 billion “out of our health care system” to bend the cost curve down. It’s the only hope they have of preventing the Obama plan from swirling down the bowl. But there is no way to cut $700 billion out of a $2.5 trillion system without wholesale rationing.
Faced with limited healthcare resources, not the least of which will be the severe physician shortage, bureaucrats will get to play God with our lives, ending many of them prematurely in a despicable game of slow-motion euthanasia. For example, smokers, drinkers, the overweight and the obese, drug abusers and many other behavioral derelicts will be denied the best treatment. What bureaucrat worth his salt would waste vital organs, expensive drugs, or elaborate medical procedures on people whose lifestyle choices the government deems inappropriate?
The elderly won’t have a chance. Geriatric care, by far the most expensive and eventually catching up to the vast majority of us, will be the most fertile ground for cost-cutters. This is where the cruelty of the Obama plan will shine its brightest – when faceless bureaucrats deny medical care to the elderly simply because they will be reaching their statistical life expectancy in a few years anyhow or become inflicted with some other life-threatening illness. A 78 year-old woman may be willing to risk a hip replacement if she thought she could live another 5 or 10, maybe 15 years without pain. But based on her life expectancy, a bureaucrat, she has never met, might think she has only 2 years left and deny the operation, approving a prescription for Oxycodone in its place. If she was overweight, she might only get a bottle of aspirin.
Let’s say that you are a 72-year-old man who smokes and drinks and needs an expensive medical test or procedure. Who knows how long you might live if you get it? But you will be at the mercy of a nazi-like social engineering advisory board (who else would take such a job?) hidden somewhere in the bowels of the Obama Health Care System. They will consider allocation principles such as “maximizing total benefits” or “promoting and rewarding social usefulness.” They will punch in numbers on their calculators to compute the quality of your three statistically remaining years. No matter how much you have paid into the system in the past, it will decide how much the government will spend on you based on how long it thinks you will live usefully. The odds are heavily against you getting (or having the opportunity to get) health care that will meaningfully extend your life.
Even if you didn’t smoke or drink, with an existing physician shortage and 45.6 million extra patients, there won’t be much for you. Given the government’s track record of cutting costs, there won’t be anything there. Most of us will eventually get the so-called “Senior Death Discount” embraced by Obama’s advisors (e.g., health care policy advisor Ezekiel Emanuel (Rahm Emanuel’s brother) and regulatory czar, Cass Sunstein). But maybe there’s something to their quality-adjusted-life-years (QALY) formula. Geriatric rationing will certainly bend the Social Security System cost curve down. By my calculation, being old, healthy and broke would have a negative QALY value.
Earlier this month, Henry Allingham died at 113 years of age. He was the world's oldest man and attributed his remarkable longevity to "cigarettes, whisky and wild, wild women." I wonder what Henry would have thought of Obama’s curve bending health care plan.