Thinking in public about anything that matters.

Category: Obamacare

Cutting out the Third Party in Medical Care

‘Three years ago, Dr. Keith Smith, co-founder and managing partner of the Surgery Center of Oklahoma, took an initiative that would only be considered radical in the health care industry: He posted online a list of prices for 112 common surgical procedures. The 51-year-old Smith, a self-described libertarian, and his business partner, Dr. Steve Lantier, founded the Surgery Center 15 years ago, after they became disillusioned with the way patients were treated at St. Anthony Hospital in Oklahoma City, where the two men worked as anesthesiologists. In 1997, Smith and Lantier bought the shell of a former surgical center with the aim of creating a for-profit facility that could deliver first-rate care at a fraction of what traditional hospitals charge.’

And it appears that they’ve been very successful in accomplishing their purpose.



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Obamacare’s “Independent Payment Advisory Board”


I believe in government as policeman.  Its job is to be the legal power that pursues those who commit violence and fraud, who initiate physical force against others.   Its job is to punish right’s violators.  It’s job is to go after criminals and defend against foreign aggressors.  It’s job is the use of force in retaliation against those who initiate it and to stop those who threaten to initiate it.

It is *the* legal entity that has the right to use violence in pursuit of rights violators and to use violence, if necessary to stop, to imprison, or even to kill those who do not demonstrate through their actions a willingness to avoid initiating violence or using fraud against their fellowman.  That job is complex enough and requires vigilance on the part of the population to ensure that the coercive power of the state doesn’t get out of hand.

But there are many people who think that government should not be limited to the policing power.  It should provide a security net for senior citizens and for the poor, it should pay for or at least help with health care, and a whole host of other duties that are not normally coercive… except that when government gets into them, they become so.  At the very least, the taxpayer is forced to pay into funds that he or she might otherwise opt out of, on pain of some legal punishment.  But beyond that, there is the addition of layers of bureaucracy and the expense and complications that that brings.  And there is the narrowing of choice, in order to make the administration of the sphere involved simpler and less expensive for the bureaucracy to handle.  Instead of the expansion of alternatives, bureaucratic management tends toward a one size fits all model.

This is one of the reasons I don’t approve of government involvement in health care insurance.  As long as it’s guarding against fraud in the industry, it’s doing its job.  But when it interferes in the market itself, things get complicated.  And coercive.

Sometime I’d like to explore the case for alternative solutions to our health care cost/payment troubles instead of the government-controlled ones.  But the topic I want to put up for discussion  is a particular part of Obamacare: the Independent Payment Advisory Board (IPAB).

Howard Dean,  governor of Vermont from 1991 to 2002 and a former chairman of the Democratic National Committee, has written an article for the Wall Street Journal.  Unlike me, Mr. Dean favors Obamacare overall, but like me he sees that the IPAB – Obamacare’s health-care rationing body – is a serious threat to individualized care necessary to suit the needs of actual patients.

Here is an excerpt from his article:

“One major problem is the so-called Independent Payment Advisory Board. The IPAB is essentially a health-care rationing body. By setting doctor reimbursement rates for Medicare and determining which procedures and drugs will be covered and at what price, the IPAB will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them.

“There does have to be control of costs in our health-care system. However, rate setting—the essential mechanism of the IPAB—has a 40-year track record of failure. What ends up happening in these schemes (which many states including my home state of Vermont have implemented with virtually no long-term effect on costs) is that patients and physicians get aggravated because bureaucrats in either the private or public sector are making medical decisions without knowing the patients. Most important, once again, these kinds of schemes do not control costs. The medical system simply becomes more bureaucratic.

“The nonpartisan Congressional Budget Office has indicated that the IPAB, in its current form, won’t save a single dime before 2021. As everyone in Washington knows, but less frequently admits, CBO projections of any kind—past five years or so—are really just speculation. I believe the IPAB will never control costs based on the long record of previous attempts in many of the states, including my own state of Vermont.”

I invite readers to join a serious discussion of a serious topic that will affect us all in the near future.  If you take part in the discussion, please do not resort to deliberate personal attacks on your opponents, no personal insults or moral accusations that can distract from dealing with the very important matters at hand.  Everyone needs to sort out the complex of issues here, to understand them and think seriously and honestly about them.   It’s our health and perhaps even our lives at stake.



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