Category: Investigations

“As businesses starts grappling with health reform, it’s becoming clearer that the Obama plan is predicated on some false assumptions about the health care industry. Three assumptions underlying the legislation are simply wrong, making it hard to see how the plan ever reduces costs. It assumes that health insurers are highly profitable, that doctors and hospitals operate on lean margins, and that the source of change and innovation in health care delivery is going to come from hospitals and medical practices that consolidate into more closed provider networks.”

ObamaCare cut over $500 billion in Medicare payments to health care providers over the next 10 years. These cuts were in an arbitrary, across-the-board manner, and are unlikely to work properly because it’s difficult to second-guess how medicine will advance over the next decade. “This is an inherent defect of Medicare not found in markets.  Competitive markets automatically translate productivity gains into lower prices for consumers.  Medicare protects providers at the expense of enrollees and taxpayers.”

“In the 2010 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, the Board warns that ‘the actual future costs for Medicare are likely to exceed those shown by the current-law projections.’ The Trustees Report is necessarily based on current law; as a result of questions regarding the operations of certain Medicare provisions, however, the projections shown in the report do not represent the ‘best estimate’ of actual future Medicare expenditures. The purpose of this memorandum is to present an alternative scenario to help illustrate and quantify the potential magnitude of the cost understatement under current law.”

Seeing rising health costs on the horizon, employers are scaling back their insurance plans to put more costs on the consumer. This is despite pledges from the White House that families will see their premiums decrease without any quality reduction because of ObamaCare. “That could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health-care choices.”

“Starting on Oct. 1, 2012, Medicare payments for hospitals with high readmission rates for certain conditions, including heart failure, will be reduced. This means Obamacare may actually punish hospitals and physicians for providing better quality care. As Dr. Eiran Z. Gorodeski of the Cleveland Clinic put it, ‘I think that the message to patients and the general public is that they should be wary of seemingly simple measures of quality of care.’ There’s also a message here for lawmakers: health care is too large and complex to expect central planning to yield positive results. Unfortunately, the passage of Obamacare and the recent recess appointment of Dr. Donald Berwick as Medicare head only move the U.S. further in that direction.”

“The Congressional Budget Office estimates that the PPACA will add 16 million new individuals to Medicaid. And that almost certainly means many, many more emergency room visits. ObamaCare was sold as a way to ease America’s health care burdens. Instead, it looks more and more like its legacy will be to increase the strain on a broken system.”

ObamaCare lets the government define what is or isn’t “preventive care” and thus provided cost-free by insurers. While rulings were previously merely advisory, their increased role will subject them to substantial lobbying pressures, which could lead to politicized decision-making. “Under the new health care overhaul law, insurers will be required to pay fully for services that get an ‘A’ or ‘B’ recommendation from the U.S. Preventive Services Task Force, a volunteer group made up of primary care and public health experts. [I]t puts the group in the crosshairs of lobbyists and disease advocates eager to see their top priorities – including routine screening for Alzheimer’s disease, domestic violence, diabetes or HIV – become covered services. ‘It’s a wide-open door for lobbying,’ says Robert Laszewski, a health insurance industry consultant.”

According to surveys, only about a third of Texas primary care doctors accept Medicaid patients, because the government-run insurance program sets very low doctor fees. Over half of the people who will become newly insured because of ObamaCare will be added to Medicaid, which means their insurance will likely not actually allow them access to medical care.

“As events are now unfolding, the Massachusetts plan couldn’t be a more damning indictment of ObamaCare. The state’s universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.”

Those on Medicaid are more likely than the uninsured to visit the emergency room. Given that ObamaCare assumes substantial cost savings from reduced ER visits after people who were previously uninsured become covered by Medicaid, its cost increases will likely be substantially higher than anticipated by the Administration.