“The new health care law specifically targets reimbursement for new drugs and devices as a way to save money in programs like Medicare and Medicaid. These savings, in turn, are used to pay for new health coverage for the uninsured. But the legislation doesn’t take down drug and medical device prices directly. Rather, it creates a series of new agencies, boards, and authorities that separately will be empowered to construct new rules to impact how medical products are priced, as well as to restrict their use by defining when and if products are covered by insurance.”
Many doctors acquire their own imaging equipment so they can conduct CT scans,
MRIs, and other services directly in their office without an outside referral.
They say this allows them to better treat their patients in a more timely and
efficient manner. ObamaCare put new regulations on doctors providing
self-referrals, because bureaucrats mistrust the motives of doctors, believing
them to be ordering wasteful, extra tests.
ObamaCare creates numerous expert panels to make determinations about the worthiness of many medical treatments. Supporters say these decisions will never amount to rationing, but the experience we already see with similar boards suggest otherwise. “If there’s an American precedent for the medical central planning of ObamaCare, it’s the Food and Drug Administration. Witness a looming FDA ruling that may deplete the drug arsenal for terminally ill cancer patients.Last month, an FDA advisory board recommended withdrawing government approval of Avastin as a treatment for advanced breast cancer. The decision betrays a bias that puts costs above treatment, and unless the FDA leadership overrules its own experts, the 40,000 women killed by breast cancer each year will be denied an important clinical option.”
“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’s regulations dictating the spending levels of insurance companies may result in them ending their disease management programs, where insurance companies provide free counseling to chronically ill enrollees. “These phone-based programs have sparked debate, with critics claiming there is little evidence that they actually work, and proponents — including many insurance companies — lauding them as precisely the sort of prevention-oriented approach needed to fix the health-care system. That debate has gained new salience because of a key requirement of the sweeping health-care overhaul enacted by Congress this year.”
“The NICE precedent also undercuts the Obama Administration’s argument that vast health savings can be gleaned simply by automating health records or squeezing out “waste.” Britain has tried all of that but ultimately has concluded that it can only rein in costs by limiting care. The logic of a health-care system dominated by government is that it always ends up with some version of a NICE board that makes these life-or-death treatment decisions. The Administration’s new Council for Comparative Effectiveness Research currently lacks the authority of NICE. But over time, if the Obama plan passes and taxpayer costs inevitably soar, it could quickly gain it.”
“Although administration officials are eager to deny it, rationing health care is central to President Barack Obama’s health plan. The Obama strategy is to reduce health costs by rationing the services that we and future generations of patients will receive.”
With its stock prices falling as Obamacare’s impact is assessed, Big Pharma may regret spending roughly $100 million in support of the overhaul — but health care innovation could become the bigger casualty.
ObamaCare’s huge cuts to Medicare and Medicaid will especially hurt rural hospitals. “Nestrick said President Obama’s health care plan likely will end up costing his business and others in rural areas more money because the plan focuses on sending more patients to larger, city-based clinics where they can receive cheaper medical services.” The new medical device tax will be passed on to patients, raising the costs of care and reducing innovation in the industry.
The pharmaceutical industry was first out of the gate to cut a deal with the White House and Senate Democrats, limiting the new costs to their industry in exchange for funding ads supporting ObamaCare. But what seemed like a good deal to the industry actually creates substantial disincentives to finding new cures and developing innovative new drugs. “It will inevitably increase drug costs inside Medicare, inviting the kind of politically driven price controls that discourage investment. For good measure, the Obama health plan is full of new tools that will enable Medicare to set rules not only on prices, but the clinical criteria for accessing new medicines.”