House Republicans laying groundwork for Obamacare replacement
by Joel Gehrke
April 25, 2013
Source: Washington Examiner
House Republicans are laying the groundwork for legislation to replace Obamacare by arguing that the law will exacerbate the rising costs of health care as it further insulates doctors from the need to compete with each other for patients.
“Independent experts believe that the Affordable Care Act, despite its name, will actually further increase what Americans spend on health care, both in terms of money and time,” House Oversight and Government Reform subcommittee on health care chairman James Lankford, R-Okla., said in a statement to The Washington Examiner. “The health care system needs real reform, and the ideal reform would aim to address the two primary concerns highlighted by today’s witnesses – reducing the amount of third-party payment in health care and providing patients with additional information related to health care quality.”
Republicans point to a 2012 report from the Institute of Medicine estimating that 30 percent of health care spending in 2009 was money wasted.
“IOM estimated the total amount of health care waste at over $750 billion,” Oversight committee staff observe in a hearing memo. “IOM attributed $210 billion of the waste to unnecessary services and $190 billion of the waste to excessive administrative costs.”
One of the Republican witnesses suggests the American health care system is already European in one critical respect that drives up cost and diminishes quality.
“The truth is that Americans mainly pay for care the same way people all over the developed world pay for care at the time they receive it—with time, not money,” John Goodman, president of the National Center for Policy Analysis, says of the American health care industry in his prepared testimony. “When patients aren’t spending their own money, doctors will not compete for their patronage based on price. When doctors don’t compete on price, they won’t compete on quality either. The services they offer will be only those services the third parties pay for and only in settings and ways the third parties have blessed.”
The opacity of health care costs is tied to public ignorance about which hospitals and doctors do the best work and which do the worst, according to Dr. Martin Makary, who like Goodman was called to testify by Republican committee members.
“If medical mistakes and preventable infections together were a disease, it would rank as the number #3 most common cause of death in the U.S.,” Makary, director of surgical quality and safety at Johns Hopkins University, says in his prepared testimony. He added that doctors are rarely fired and that the medical culture discourages physicians from reporting their colleagues’ mistakes.
“There are over 150 national clinical registries which track patient outcomes,” Makary also points out. “One-quarter are taxpayer funded, yet only 3 make their outcomes available to the public. Making public access a condition of taxpayer funding is one simple reform which would allow the free market to work to cut waste in healthcare.”
Consumers Union senior policy analyst Lynn Quincy contends that more transparency would be helpful, but the benefits shouldn’t be over-hyped.
“Better transparency around health care prices may not lead to lower costs or better functioning markets,” Quincy, whom the Democratic members of the committee called to testify, argues in her statement. “A lot of health care is complex and/or urgent. At a certain point, consumers can not choose between alternate, complex treatments just because they featuring different price tags.” She cites focus group testing that indicates consumers assume that more expensive treatments are of higher quality.
“Ironically, if we only provide price information, we may inadvertently steer consumers to higher priced services,” Quincy suggests.
She also endorses the idea of using government purchasing power to cut prices. “History shows us that large payers (like Medicare and CalPERS) are much more effective in reining in price increases than individual consumers,” Quincy says.
Obamacare adopts this tactic to the detriment of senior citizens, according to Goodman.
“Under the administration’s health reform law, there is only one effective way to hold Medicare to a lower spending path: reduced fees paid to doctors, hospitals and other providers,” he says in his statement. “Seniors will become less desirable to providers than welfare mothers from a financial point of view. As they are relegated to the rear of the waiting lines, the elderly and the disabled may have to turn to sources of care that many Medicaid patients turn to today: community health centers and the emergency rooms of safety net hospitals.”