JPandS Talks Medicare Costs, Physician Deficit, Cadillac Tax
By - Along with the fiftieth anniversary of Medicare comes reflection. A recent series of writings within the fall issue of the Journal of American Physicians and Surgeons (JPandS) highlights numerous flaws within medicine and the greater healthcare industry regarding problematic government intervention, the impact of bureaucracy upon physician shortages, and the Cadillac Tax’s insufficiently developed wage-growth theory.
Detrimental government intervention in medicine
Medicare advocates in celebration of what they consider a healthcare milestone are denying numerous quite troublesome realities, says Donald W. Miller, Jr, MD, a Cardiovascular Surgeon and Emeritus Professor of Surgery at the University of Washington School of Medicine, within JPandS. Referencing the poet Robert Frost, Miller confirms walking along the road less traveled makes all the difference, as healthcare’s road has indeed become trodden with governmental intervention that merely overwhelms healthcare workers with regulatory focus and rations care. Resultantly, healthcare costs are skyrocketing, even with price controls formally in effect, he says, referencing the land of healthcare’s “draconian monetary penalties [and] bounty-hunter recovery audit contractors.”
Miller emphasizes medical care spending has escalated following Medicare and Medicaid’s formal conception – from 5.2 percent of Gross Domestic Product (GDP) in 1960 to 17.4 percent in 2013. This 2013 figure amounts to over $9,200 per individual, Miller adds.
“At first Medicare was a bonanza for private, fee-for-service physicians and surgeons, especially procedure-oriented specialists like orthopedists and cardiovascular surgeons. Medicare paid in full hospital bills and the ‘usual and customary’ fees physicians and surgeons charged for their services,” Miller states. “Medicare beneficiaries, the consumer, gave little thought to medical prices, since a third-party, the government, paid the bill,” he adds, additionally confirming prices doctors and hospitals charged for services were simply not questioned for some time. Although lawmakers predicted Medicare would cost $12 billion a year by 1990, actual 1990 costs hit $98 billion, he adds.
The Affordable Care Act (ACA) is one of the latest pieces of legislation to advance the healthcare industry via increased expensive government control, says Miller, who claims “the Affordable Care Organization is destined to fail – like the similar managed-care HMO did 20 years earlier.” Industrialized medicine is merely one result of such, as physicians function as assembly-line workers heavily focused on federally prescribed mandates, he explains.
“With the U.S. economy deeply in debt and faltering, hyperinflation and economic collapse could occur unexpectedly at any point, swiftly dismantling American medicine as it is currently structured,” Miller states. “Free-market medicine offers us the best chance for preventing disease and developing cures for existing, currently incurable chronic diseases, where longevity with well-being is the ultimate goal.”
Free market, not bureaucracy, attracts physicians
The Interstate Medical Licensure Compact (IMLC), already implemented among seven states, will not meet intended goals of advancing telemedicine and easing the physician shortage burden, says economist Michael L. Marlow, PhD, within JPandS. It will, however, both energize and enhance the Federation of State Medical Boards (FSMB), Marlow confirms.
“FSMB is attempting to consolidate its own power and control over physicians. The Compact, in effect, allows FSMB to gain strength in at least two ways. One is that it will gain additional fees when more physicians take advantage of the streamlined interstate licensing process,” states Marlow. “Of 878,194 physicians with an active license to practice medicine in the U.S. in 2012, 78 percent held only one active license, 16 percent had active licenses in two jurisdictions, and six percent had active licenses in three or more jurisdictions.25 Many dollars can be made by raising the number of active licenses,” he adds, additionally confirming a higher number of fees translates into increased lobbying resources.
The IMLC does not increase the amount of physicians, says Marlow. “If a doctor in Montana can now practice in Wyoming, some patients there may have access to another doctor. But, if the Montana doctor is spending time with Wyoming patients, then the doctor is spending less time with Montana patients,” he states. “The net effect is likely to be close to zero. But, also notice that, if the Montana doctor had spare time there, then there is evidence of a surplus of doctors in Montana and not a shortage.” FSMB has not closely considered the issue at hand, he says.
“Growing the bureaucracy is never a mechanism for lowering costs, improving access to quality care, or facilitating physicians’ ability to care for their patients. If state licensing boards are really serious about improving the quality of medical care, they will begin figuring out how to promote a free market in medical care that attracts more physicians rather than further its declining quality by picking their pockets,” confirms Marlow.
Cadillac Tax’s wage-growth theory lacks evidence
As RevCycleIntelligence.com recently reported, Congress was recently urged to repeal the Affordable Care Act’s Cadillac Tax – a 40 percent excise tax to be implemented in 2018 on insurance plans valued beyond a certain monetary threshold – due to serious impending consequences. Says Dana Beezley-Smith, PhD, a Clinical Psychologist, within the fall issue of JPandS, the Cadillac Tax was intended as a crafty means of financial reform.
“A 40% excise tax on insurance plans valued above a dollar threshold, the Cadillac tax, imposed in 2018 and beyond, is first assessed against insurers, then passed along, through higher premium costs, to employers,” says Beezley-Smith. “Because the threshold is indexed to ordinary inflation rather than the higher rate of increase in healthcare costs, the tax will eventually target even the skimpiest policies insurers offer.”
“Very little of this revenue was expected to result from direct taxation of insurance plans; companies were expected to devalue – or drop – coverage to avoid it. Instead, most receipts were thought to accrue from payroll and income taxation of worker pay raises,” states Beezley-Smith. Although workers are paying more, they are actually receiving less than before, she says. "Such sacrifice was confidentially considered necessary to finance the overhaul. But no one told the American worker," Beezley-Smith writes. "Perhaps the only silver lining to the Gruber-CBO affair is that we learned of the need for greater accountability at CBO.”
