Free-market economists have long known that “controls breed controls.” In health care, leading Obamacare supporters are now proposing unprecedented new government controls over all medical spending — private as well as public — to “solve” problems caused by prior controls. Welcome to ObamaCare 2.0.
In a recent article in the New England Journal of Medicine (NEJM), several prominent Obamacare supporters have called for a binding “global spending target for both public and private payers.” In regular English, this means a government-enforced cap on how much Americans may spend in aggregate on their health care, both public and private. The co-authors of this article include former Obama administration officials Dr. Ezekiel Emanuel (former White House health care advisor and brother of Rahm Emanuel, former White House chief of staff), Dr. Donald Berwick (former head of Medicare), and Peter Orszag (former budget director).
The authors argue that current Obamacare cost controls do not go far enough. Although Obamacare will reduce government-sector health spending (e.g., Medicare and Medicaid), insurers and medical providers will simply shift those costs onto the private sector. To properly control health care costs (they claim), the government must therefore also control private health spending.
The state of Massachusetts has already passed into law a global cap on public and private health spending to deal with the skyrocketing costs of their “universal coverage” plan. Given that Massachusetts has been the testing ground for national health legislation and given the political clout of the NEJM authors, this proposal will likely be the basis of Obamacare 2.0.
In particular, voters should be aware of five key points:
1) This means rationing.
Obamacare proponents have long denied their plan would result in “rationing,” even going so far as to advocate avoiding the “R-word” in public discussions.
But a hard cap on private medical spending means the government must necessarily restrict Americans’ right to spend their own money for their own medical care. The rationing will not be overt. Instead, the government will use proxies (such as “Accountable Care Organizations”) to limit medical care. But it will be rationing all the same.
2) Get ready for the lobbyist feeding frenzy.
A fixed health care “pie” will create an intense “feeding frenzy” from special interest groups seeking their piece of that pie.
Last year, the Obama administration held a series of nationwide “listening sessions” to solicit public input on what should be included in any “essential health benefits package.” One attendee at the Denver meeting noted well-orchestrated pitches from special interest groups seeking coverage for services including foster care for autism patients, HIV testing, and medical nutrition therapy for African-American patients.
In Massachusetts, the current mandatory insurance benefits package includes chiropractor services and in vitro fertilization — services many ordinary people neither need nor want (but must pay for). In the proposed California essential benefits package, infertility treatments did not make the cut, but acupuncture did.
Under Obamacare 2.0, availability of health services will be increasingly driven by those with political “pull,” at the expense of those without.
3) The government will exert increasing control over how doctors can practice.
Under Obamacare, doctors will already be required to adhere to mandatory “quality measures” to be paid in full. The NEJM authors add a new twist, using the legal system to further control how physicians practice.
The NEJM article proposes a medical malpractice “safe harbor” where doctors “would be presumed to have no liability if they used qualified health-information-technology systems and adhered to evidence-based clinical practice guidelines.” In other words, if doctors follow government practice guidelines, they will be protected from malpractice lawsuits. But if doctors stray from those guidelines and anything goes wrong, they must take their chances in court. This will create tremendous pressure on physicians to practice government-approved “cookbook medicine.”
4) Controls breed controls.
Obamacare has explicitly encouraged hospitals and doctors to merge into large “Accountable Care Organizations.” Because these large entities face less competition in their local markets, health prices have naturally risen. In other words, Obamacare supporters are using these government-spawned monopolies to justify further government medical controls.
5) We need free-market reforms more than ever.
Instead of new government controls to “fix” problems caused by earlier controls, we need free-market health care reforms.
Note that pundits don’t debate whether to impose a national cap on private cellphone spending. That’s because our relatively free market has driven cellphone prices so low that even many of the poorest Americans can afford one.
The free market also works in health care. Consider “calcium scoring” heart scans, which measure how much calcium is deposited in the coronary arteries. Recent studies have shown these to be one of the safest and most reliable ways to measure one’s risk of future heart attack.
These calcium scoring scans do not require a doctor’s order and are not typically covered by insurance. Because patients generally pay out of pocket, motivated consumers shop around. Over time, normal market forces have dramatically driven down their price. Several years ago, they cost $500; now some centers offer them for under $100. This pattern of rising quality and falling prices can and should be the norm in all of health care.
Earlier this year, the U.S. Supreme Court upheld the constitutionality of the Obamacare “individual mandate.” This meant the government could now dictate how Americans must spend their own health care dollars. The proposed cap on private medical spending would also prevent Americans from spending their health care dollars as they wished. Obamacare 2.0 would mean unprecedented government control over our health care — and our lives.
Americans should remember this at the ballot box in November.
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