Whenever Congress attempts to “reform” the tax system by passing new laws, they inevitably create new winners and losers. But one group always wins — the consultants and special interest groups best able to “game” the system to their advantage. The same is happening now with Obama’s health care “reform,” except this time the stakes won’t just be money, but Americans’ lives.
We’ve already seen such political gamesmanship with the over 1400 ObamaCare waivers granted disproportionately to the president’s labor union supporters or to businesses in the congressional district of former House Speaker Nancy Pelosi.
Similarly, Politico reported on how the new government-mandated health exchanges are a “gold mine“ for consultants collecting federal dollars for helping to implement the new laws.
Another gold mine for consultants are the new government-driven accountable care organizations (ACOs). ACOs are the federal government’s latest attempt to control health care costs. Through financial carrots and sticks, doctors and hospitals would be “encouraged” to merge into large provider groups to deliver medical care according to government practice guidelines. Government would monitor ACO performance with mandatory electronic medical record systems. ACOs that saved money would be financially rewarded; ACOs that spent too much money on their patients by government standards would be penalized.
And even though the official ACO guidelines have not yet been finalized, a massive industry of consultants has already sprung up to advise hospitals and doctors who don’t want to be left behind in the new system. The Washington Post notes that some consultants charge as much as $25,000 a day for ACO strategy sessions, or $1 million to actually implement the strategy.
Under the ACO system, patients basically become cost centers for hospitals and doctors. ObamaCare legislation states an ACO patient should be free to see whatever doctor he wishes. But for the purpose of “accountability,” all the costs he incurs will be attributed to a single physician within the ACO. Hence, even if a patient sees a specialist in another city who then orders expensive tests or performs some specialized procedures, those costs will still be “attributed” to his primary ACO physician.
In theory, this “assignment” system is supposed to encourage doctors to work together to provide efficient “integrated” care. But in practice it also creates tremendous perverse ethical incentives for primary care physicians. If his patient has chest pain and needs to see a cardiologist, should his physician recommend the better but more-expensive expert across town — or steer him towards the cheaper but not-quite-as-good cardiologist in the same ACO?
Even worse, ObamaCare allows patients to be “invisibly assigned” to an ACO. Suppose a patient sees his doctor for a bad headache and the doctor says, “No, you don’t need an MRI scan for that headache; just take two Tylenol and call me in the morning.” The patient may never know if the doctor is giving his best objective medical advice, or being swayed by the latest memo from the ACO administrator demanding greater cost savings.
Under the new system, the sickest patients will be viewed as the biggest burden on the ACO. Currently, the sickest 5% of U.S. patients account for 47% of medical spending, whereas the healthiest 50% of the population accounts for only 3% of health spending. Hence, individual doctors (and ACOs at large) will have a powerful incentive to include as many of the healthy 50% on their patient rolls — and as few of the sickest 5%. According to Dr. Stewart Segal, this will create a new class of patients called “ACO lepers.” As Dr. Segal bluntly warns:
Are you overweight, out of shape, or arthritic? Do you smoke, drink alcohol, or do drugs? Do you have any chronic medical problems? Are you old, have poor eyesight, losing your hearing or memory? Are you at risk of falling?
If the answer to any of these questions is yes, you are the 2011 definition of a leper. Face it, if I am accountable for how well you handle an illness, and for what your outcome is, I cannot afford to treat you unless you are highly compliant, have no other risk factors, and stand a 99% chance of getting well.
Less scrupulous providers will thus be tempted to manipulate the assignment rules to avoid these burdensome “ACO lepers.” Consulting firms are already advising prospective ACOs on the pros and cons of various patient assignment systems. Because the financial stakes are so high, some will inevitably seek to exploit these rules to their advantage, even if it’s at their patients’ expense.
Note that such gamesmanship is a problem caused by the government-imposed ACO structure. These problems don’t arise when patients control their own health spending, for instance with “direct pay” health care or with health savings accounts (HSAs). The patients decide if certain tests or procedures are worth it to them, not the government. Doctors are free to openly and honestly advise their patients on the costs and benefits of various testing and treatment options, while leaving the ultimate decision up to the patient. The incentives of doctors and patients are thus aligned, rather than pitted against one another.
Under ObamaCare, the winners will be those lobbyists, consultants, and less-scrupulous hospitals and doctors willing to “game” the system to their advantage. The losers will be those doctors unwilling to play those games — and their patients. If Americans don’t want to become sacrificial pawns to ObamaCare gamers, they must speak out before it’s too late.
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