Obamacare Will Play A Role In Determining What Care Patients Get

 

The media “fact check” business is incredibly tiresome given how pedantic and downright inaccurate it is, but I wanted to weigh in on this one before it hardens. The LA Times somehow thinks that the ACA (aka Obamacare) will have no effect on determining what care patients can get, and consequently dings Romney for saying it will. There isn’t a single honest health economist out there who agrees with the LA Times on this one.

First, the “exchange” market place that the ACA creates explicitly regulates the services covered by private insurance plans. Changes in these sorts of regulations have a direct effect on what care patients get — if insurance does not pay for something, you can be sure most doctors will not do that thing. You can get some hint of this if you recall the stories about Obamacare requiring health plans provide contraceptives for “free.” 

Second, as both Romney and Obama acknowledged in their debate tonight, the ACA establishes the Independent Payment Advisory Board (IPAB), which is responsible for implementing the $700 billion+ cuts to Medicare — the government health insurance plan for the elderly — imposed by the ACA. The IPAB will consist of 15 unelected bureaucrat/experts and it will require a 3/5ths majority of Congress to undo their decisions. The vast bulk of these cuts start after 2014, which is why this has not yet become a big issue (until the debate tonight, that is).

It is true that the IPAB is not allowed to “ration” care , but they have to find some way to cut that money (and no, there’s not enough in “waste, fraud, and abuse” to fund it unless you mean something very expansive by “waste”). Most expert observers believe that IPAB will do two things to cut that money: (1) reduce payments to Medicare Advantage plans, which means that up to a quarter of the elderly population of the U.S. may have to start looking for a different insurer; and (2) cut payments to doctors who take Medicare patients. The main consequence of the second strategy will be that it will be harder for elderly patients to find care even though they are covered by Medicare. Thus, the LA Times notwithstanding, Obamacare will have the effect of determining what care patients receive. 

There are 7 comments.

  1. Idahoklahoman Member

    The IPAB cannot ration care directly, but as I understand it, it can set standards of care which would have that effect. Dr. Emmanuel has written glowingly of adopting the Quality Adjusted Life Years model used by the NHS, under which those under age 5 or over 65 simply don’t receive some kinds of expensive health care. Certain modalities would be denied on the basis of IPAB’s large-scale cost-benefit analysis, which would also be a form of rationing. And, by cutting Medicare rates, and therefore Medicare participation by doctors and hospitals, the IPAB will create waiting lists for medical services. Wait lists are deliberately used in Britain and Canada to ration services; if you make them wait for a year to see a specialist, a percentage of them will either get better or die, free.

    • #1
    • October 4, 2012, at 6:13 AM PDT
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  2. DocJay Inactive

    You are spot on about the IPAB. Id suggest furthermore, that once they’re in then you have the planned expansion of those powers in relation to future problems.

    • #2
    • October 4, 2012, at 6:57 AM PDT
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  3. Umbra Fractus Inactive

    I think you nailed it. They’re not going to call it “rationing” they’re going to call it “cutting waste,” but the effect is going to be the same; old people will be denied care by the federal government. I don’t understand how someone can think, a la Mickey Kaus, that “You can write your congressman” is supposed to be comforting here.

    Jay Bhattacharya: unless you mean something very expansive by “waste”
    • #3
    • October 4, 2012, at 7:05 AM PDT
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  4. ConservativeWanderer Inactive
    DocJay: You are spot on about the IPAB. Id suggest furthermore, that once they’re in then you have the planned expansion of those powers in relation to future problems. · 2 minutes ago

    Exactly.

    The IPAB may not be allowed to ration care today, but what happens later, when some Democratic President and Congress decide to “expand” their authority in the name of more cost-containment?

    • #4
    • October 4, 2012, at 7:12 AM PDT
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  5. Jay Bhattacharya Inactive
    Jay Bhattacharya Post author
    ConservativeWanderer: The IPAB may not be allowed to ration care today, but what happens later, when some Democratic President and Congress decide to “expand” their authority in the name of more cost-containment? · 36 minutes ago

    You have hit on the main problem with how ACA treats Medicare. It will inevitably lead to a government board making these decisions, instead of doctors, patients, and insurers who stand to lose customers if they do the wrong thing.

    • #5
    • October 4, 2012, at 7:56 AM PDT
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  6. Hartmann von Aue Member

    An excellent post. Many thanks for taking the time.

    • #6
    • October 4, 2012, at 8:27 AM PDT
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  7. ConservativeWanderer Inactive
    Jay Bhattacharya
    ConservativeWanderer: The IPAB may not be allowed to ration care today, but what happens later, when some Democratic President and Congress decide to “expand” their authority in the name of more cost-containment? · 36 minutes ago

    You have hit on the main problem with how ACA treats Medicare. It will inevitably lead to a government board making these decisions, instead of doctors, patients, and insurers who stand to lose customers if they do the wrong thing. · 1 hour ago

    I’ve seen it happen with far too many government programs. Look at what Medicare started out as.

    • #7
    • October 4, 2012, at 8:58 AM PDT
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