NCPA - National Center for Policy Analysis

GOVERNMENT HEALTH PLANS ALWAYS RATION CARE

June 25, 2009

President Obama objects when people use the word "rationing" in regards to government-run health care.  But rationing is inevitable if we simply expand government control without fixing the way health care is reimbursed so that doctors and patients become sensitive to issues of price and quality, says Dr. Gottlieb, a physician and resident fellow at the American Enterprise Institute.

If preventive care or the adoption of electronic health records, for instance, are implemented and fail to produce savings, government will turn to a less appealing but more familiar tool to cut costs: the regulation of access to drugs and medical services.  Medicare is already going down this path.  What will be new about government-run health care is the instrument of regulatory control.  There will be an omnipotent federal health board, says Gottlieb.

The idea of an omnipotent board that makes unpopular decisions on access and price isn't a new construct.  It's a European import.  In countries such as France and Germany, layers of bureaucracy like health boards have been specifically engineered to delay the adoption of new medical products and services, thus lowering spending, explains Gottlieb.

In France:

  • Assessment of medical products is done by the Committee for the Evaluation of Medicines.
  • Reimbursement rates are set by the National Union of Sickness Insurance Funds, a group that also negotiates pay to doctors.

In Germany:

  • The Federal Joint Committee regulates reimbursement and restrictions on prescribing, while the Institute for Quality and Efficiency in Healthcare does formal cost-effectiveness analysis.
  • The Social Insurance Organization, technically a part of the Federal Joint Committee, is in charge of setting prices through a defined formula that monitors doctors' prescribing behavior and sets their practice budgets.
  • In the past 12 months, the 15 medical products and services that cleared this process spent an average 35 months under review (the shortest review was 19 months, the longest 51).

In short, other countries where government plays a large role in health care aren't shy about rationing, says Gottlieb.  Obama's budget director has acknowledged that rationing reduces costs.  Peter Orszag told Congress last year when he headed the Congressional Budget Office that spending can be "moderated" if "diffusion of existing costly services were slowed."

Source: Scott Gottlieb, "Government Health Plans Always Ration Care," Wall Street Journal, June 25, 2009.

For text:

http://online.wsj.com/article/SB124588779662250705.html

 

Browse more articles on Health Issues