STORY: Health care rationing has already arrived

September 29, 2012

StoryThere will be health care rationing. The only question is who will do the rationing—the government, health care providers, or you and me. The odds are good there will be some rationing from all those sources.

Nearly everyone is agreed that health care spending is too high. A lot of us complain about high monthly health insurance premiums, and Medicaid spending is decimating state budgets. And baby-boomer retirements will exhaust the Medicare Part A fund in just a few years.

Dollars to spend on health care have been deemed an exhaustible resource, so they will be rationed. Somebody is going to be denying care to someone.

In Massachusetts, Gov. Deval Patrick recently signed legislation that said as much. The health care plan enacted under former Gov. Mitt Romney has been eating up an increasingly unsustainable portion of the state budget, so Massachusetts capped health care spending. The hammers ensuring enforcement are fines of up to $500,000 on hospitals and doctors. Providers will NOT run this risk.

How? They will pay their doctors less. When that proves insufficient, they will pay their nurses and technicians less. When that, too, doesn’t save enough money, they will begin reducing the numbers of the most expensive procedures. The providers will ration health care.

President Barack Obama signed the Patient Safety and Affordable Care Act (ACA, or Obamacare) into law in 2010. This law encourages the formation of ACOs, with which the government will bargain to set per-patient annual expenditures. In other words, Medicare will pay an annual per-patient fee to these ACOs and it will be up to the ACOs to provide care the Medicare beneficiaries in their area need.

So, ACOs will pay doctors less. Then, they will pay nurses and technicians less. When that, too, fails to control Medicare spending, the ACOs will cut back the work they do for those beneficiaries.

Many hospitals in small communities, whose ACO budget could be devastated by a single serious illness in a Medicare patient, will close. Doctors, who have rushed to sign contracts with hospitals, will be unhappy with the economic consequences of ACOs. Patients will wait to see physicians and be increasingly triaged by nurse practitioners and other provider extenders. ACO advocates talk about physicians functioning as “team leaders.” I suspect this will make some patients unhappy.

Wisconsin Rep. Paul Ryan, a Republican, and Oregon Sen. Ron Wyden, a Democrat, have a plan in which the government provides a stipend to individuals who then buy the insurance they think they need in the private market. In this way, the government spends a per-patient covered amount that is fixed.

The stipend might be enough that, if you are in good health, you could purchase all the insurance you would need. However, if you are chronically ill (some 10 percent of patients fall into that category), this stipend would probably require you to supplement it with insurance. In this scenario, you and I as health care consumers are the backstop, not the taxpayers or the health care providers.

There will be a private system of health care in this country, too. Physicians who can will work outside the ACO system, selling their services in a private market. This has been a trend with the growth of “concierge” medical practices, with their annual access fees being a sort of “green screen.” Patients will decide how successful and how many such practices will exist.

So, government will ration health care in the ACA setting. Providers will participate in this rationing, too, threatened by fines and the economic facts of ACOs. Patients will ration how vibrant the private health care market is and, perhaps, should something like the Ryan-Wyden plan be adopted, how much they will supplement their government voucher for health care insurance.

We are going to have decisions made, at least in part, with cost an important part of the calculation. We are going to have a two-tiered health care system, where individuals with the means to shortcut the new health care system will do exactly that.

You are going to be exposed to the term “futile care,” which refers to the cost of care extended to those whose condition is nearly hopeless. Some of the voices from Washington suggest there may be penalties to those who provide futile care. How we will always know that at the time is unclear to me and to many.

I am not sure who is going to be happy in this new health care environment. I suspect not many of us—not doctors, not patients. But, by hook or crook, the reality of the rationing of health care services is upon us.•


Story is chief operating officer of FirstLine Personal Health Care in Carmel. Views expressed here are the writer’s.

Comments powered by Disqus