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Primary-Care Doctors Who Refer Patients to Specialists Will Face Financial Penalties Under Obamacare
Economic Policy Journal ^ | 12/25/09 | Robert Wenzel

Posted on 12/25/2009 1:23:37 PM PST by FromLori

A lot has been made about the "public option" in early versions of the healthcare plan. Many feared that all would eventually be driven into government control of healthcare if a public option existed. But for all practical purposes, total government control of healthcare will have arrived with the current healthcare bill.

Although the Obama team may have wanted it, the "public option" is not necessary for Obama to control the entire healthcare system. The healthcare bill is nothing but incentive after incentive to reduce many services and control the services that remain.

If the general public really understood what this bill was really about, they would be camped out in front of Congress, with pitchforks, just waiting to spot one of the "Representatives" of the people.

In today's WSJ, Dr. Scott Gottlieb points out some of the ways services will be cut and discouraged and the way the bill will attempt to freeze out the small medical practioner: Democrats are touting the American Medical Association's endorsement of President Obama's health plan. But there's an important reason why the American College of Surgeons and 18 other specialty groups are opposed.

The plan's most tangible efforts to restrain medical costs are through its controls on specialist physicians. Based on the government's premise that they often make wasteful treatment decisions, the health-care legislation in Congress will subject doctors to a mix of financial penalties and regulations to constrain their use of the most costly clinical options. The penalties and regulations are aimed first and foremost at surgeons and the medical devices that they use, largely because that's where the bulk of spending is.

It all starts with the sweeping power that the Senate bill gives to the Centers for Medicare and Medicaid Services. The agency will be given the authority to unilaterally write new rules on when medical devices and drugs can be used, and how they should be priced. In particular, the Obama team wants to give the agency the power to decide when a cheaper medical option will suffice for a given problem and, in turn, when Medicare only has to pay for the least costly alternative....

...the Obama team will use murky provisions embedded in the Senate bill to subtly attain in law those powers they couldn't more artfully acquire in court. In fact, the bill lets Medicare seek almost any restrictive payment authority it wants from a Medicare Commission established for the purposes of cost control.

If Congress believes Medicare has overreached, it has to pass a separate law to explicitly block the agency's newly acquired powers. These provisions are deliberately designed to leverage Congress's inability to act in a timely fashion.

The Senate health-care bill also exempts Medicare's actions from judicial review, taking away the right of patients to sue the government. Unlike existing Medicare coverage laws, patients won't have the ability to appeal any of the decisions of this new Medicare Commission.

Ironically, private health insurers must comply with new patient appeals rights under the Senate bill. The government has exempted itself from the same sort of protections.

Thus Medicare will have the power to control which medical devices surgeons use. But clamping down on expensive procedures also means the agency will need to have authority over the specialists themselves. The organization of doctors into mostly small, disaggregated practices always made it hard for a central bureaucracy to control individual physicians. ObamaCare tries to fix this by putting doctors on the financial hook for their treatment decisions.

Primary-care doctors who refer patients to specialists will face financial penalties under the plan. Doctors will see 5% of their Medicare pay cut when their "aggregated" use of resources is "at or above the 90th percentile of national utilization," according to the chairman's mark of Section 3003 of the bill. Doctors will feel financial pressure to limit referrals to costly specialists like surgeons, since these penalties will put the referring physician on the hook for the cost of the referral and perhaps any resulting procedures.

Next, the plan creates financial incentives for doctors to consolidate their practices. The idea here is that Medicare can more easily apply its regulations to institutions that manage large groups of doctors than it can to individual physicians. So the Obama plan imposes new costs on doctors who remain solo, mostly by increasing their overhead requirements—such as requiring three years of medical records every time a doctor orders routine medical equipment like wheelchairs.

The plan also offers doctors financial carrots if they give up their small practices and consolidate into larger medical groups, or become salaried employees of large institutions such as hospitals or "staff model" medical plans like Kaiser Permanente. One provision, laid out in Section 3022, allows doctors to share with the government any savings to the government they achieve by delivering less care—but only if physicians are part of groups caring for more than 5,000 Medicare patients and "have in place a leadership and management structure, including with regard to clinical and administrative systems."

While these payment reforms are structured as pilot programs in the legislation, this distinction has little practical meaning. Medicare is being given broad authority, for the first time, to roll these demonstration programs out nationally without the need for a second authorization by Congress.

Regulation of medicine has always been a local endeavor, and it's mostly the province of medical journals and professional medical societies to set clinical standards. This is for good reason. Medical practice evolves more quickly than even the underlying technologies that doctors use. This is especially true in surgery, where advances flow from experimentation by good doctors to try different surgical approaches.

The regulation of medical devices and their pricing will also have consequences for patients by discouraging innovation. Most improvements in medical devices come incrementally, with each generation of a device having small but clinically relevant advance over prior versions. This owes to the underlying hardware, which turns on embedded software and microprocessors that themselves undergo constant upgrades.

But if Medicare starts pricing similar devices off one another—a form of the same "reference" pricing schemes used in Europe—manufacturers will start holding back the small changes. Instead, they will introduce new models every four or five years that are sufficiently unique to fall outside of Medicare's pricing scheme. Meanwhile, patients will have lost the benefit of regular improvements and annual upgrades that characterize medical devices today.

The impact of these provisions won't be confined to Medicare. Private insurance sold in the federally regulated "exchanges" will take cues from Medicare, since they're both managed from the same bureaucracy. Medicare will set the standard for medical care across the entire marketplace.

Mr. Obama promised that under his plan people wouldn't have to change their doctors. But it's clear that doctors will be forced to change how they make their medical decisions.

I repeat again, life expectancy in the US under this bill will begin to decline within two to three years. Unnecessary pain, agony and a lowered quality of life will be the order of the day for the chronically ill. This is very, very evil stuff.


TOPICS: Government; News/Current Events
KEYWORDS: obamacare
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To: MrB

Bingo! Now apply that reasoning to a myriad other situations, and see how the government tries (and often succeeds) in pitting citizens against one another, so as to distract them from the fact that the enemy is *the government*.


21 posted on 12/25/2009 2:12:59 PM PST by Tax-chick (For those who seek, there must be seen a little Child, God before the ages.)
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To: JPG
What MD will be willing to put up with this kind of BS?

Pakistani ones. This is why a very significant percentage of doctors in Britain and Canada are from the Middle East and Asia. Doesn't that make you feel all warm and fuzzy? Allahu Akbar!

22 posted on 12/25/2009 2:14:59 PM PST by Tax-chick (For those who seek, there must be seen a little Child, God before the ages.)
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To: manonCANAL

Let me. Why are these people still alive let alone in power?? Must be the sheep in us.......


23 posted on 12/25/2009 2:22:02 PM PST by yadent
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To: yadent

We need to hang politicians from lamp posts. It’s past time.


24 posted on 12/25/2009 2:32:52 PM PST by ClearCase_guy (We have the 1st so that we can call on people to rebel. We have 2nd so that they can.)
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To: businessprofessor

Ain’t no thang. They even let you watch it on TV.


25 posted on 12/25/2009 2:55:25 PM PST by muawiyah
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To: FromLori

Insanity.

Rationing is what the dems are using despite all their denials.

If I take my husband out of the country for treatment and pay for it myself, will that be forbidden?


26 posted on 12/25/2009 2:56:31 PM PST by OpusatFR (Tagline not State Approved. Thoughts not State Approved. Actions not State Approved)
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To: FromLori

European socialism.


27 posted on 12/25/2009 3:21:22 PM PST by free1977free
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To: FromLori

These “medical home” provisions referenced in the US House plan disincentivizes primary care doctors form referring out patients to specialists. The obvious catch 22 for primary care provider is that they will still be held to the same high medical standards of care. This leaves them wide open to failure to diagnose lawsuits when they fail to order a laboratory test or MRI scan. Specialists provide a greater percentage of care than when this failed model was tried in the 1980s with HMOs. Patients will be denied a higher quality of care according to the specialist standard of care. Now what standard of care will trial lawyer demand for their “injured” clients?
The dilemma for primary care physicians will be your money or your licence.


28 posted on 12/25/2009 3:28:21 PM PST by grumpygresh
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To: FromLori

How wreckcreational!


29 posted on 12/25/2009 3:34:25 PM PST by HiTech RedNeck (I am in America but not of America.)
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To: OpusatFR

There’ll prolly be a steep tax on it.


30 posted on 12/25/2009 3:35:20 PM PST by HiTech RedNeck (I am in America but not of America.)
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To: OpusatFR

Highly unlikely. There will be plenty of high quality offshore clinics with US doctors if 0bamacare goes through and becomes unchallenged law. You could probably even purchase an insurance policy let’s say in the Caymans or Costa Rica for offshore medical services. With 0bamacare, offshore services will continue to improve (and US health care deteriorates) as US doctors emigrate offshore and reputable hospitals and clinics emerge. If you wanted rapid access in the US for medical treatment out of pocket you probably could find a doctor to treat you (for basic services) as long as you used an alias (you could state that you are not a US citizen for example) and paid cash.
The free market will eventually prevail.


31 posted on 12/25/2009 3:41:08 PM PST by grumpygresh
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To: FromLori

bump


32 posted on 12/25/2009 3:44:39 PM PST by ChildOfThe60s
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To: businessprofessor

Hey, you might not even get a sigmoidoscope and have to make due with a rectal blood test under 0bamacare depending on your age or usefulness to the collective.


33 posted on 12/25/2009 3:45:20 PM PST by grumpygresh
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To: grumpygresh

My brother was treated in Belize and was pleased with the medical care.

He lives there on and off during the year.


34 posted on 12/25/2009 3:45:36 PM PST by OpusatFR (Tagline not State Approved. Thoughts not State Approved. Actions not State Approved)
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To: FromLori

Ping


35 posted on 12/25/2009 3:50:47 PM PST by Jack Black
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To: OpusatFR

Belize could indeed benefit as it is the only Central American English speaking country. 0bamacare will accelerate the outflow of US retirees offshore. We will have to look at the ratings for House Hunters International to spot this trend.


36 posted on 12/25/2009 3:52:55 PM PST by grumpygresh
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To: grumpygresh
Yes, I see a massive and lucrative off-shore practice of medicine.

I see some of our best physicians, including specialists, departing the U.S. for practices in these locations.

It's funny. Communists never foresee the dictates of government causing the victims to pack up and leave on the next thing smokin'.

The Soviets had such a great thing going they had to build walls and stretch razor wire to try and keep people from getting the hell out of Dodge City.

37 posted on 12/25/2009 4:11:23 PM PST by NoControllingLegalAuthority (Tyranny - are we there yet?)
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To: manonCANAL

I know that feeling all too well!
Waiting for the feds...


38 posted on 12/25/2009 5:24:30 PM PST by Senormechanico
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To: FromLori

Wow.


39 posted on 12/25/2009 8:31:33 PM PST by fightinJAG (Mr. President: Why did you appoint a bunch of Communists to your Administration?)
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To: Lysandru

Would you have your primary care doctor take out your appendix, even though they are not qualified to do the procedure? I hate this bill. It will lead to nothing but death and injury to patients.


40 posted on 12/26/2009 12:04:27 AM PST by boop (Democracy is the theory that the people get the government they deserve, good and hard.)
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