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Dems Push Price Controls For Insurance

From the editorial page of the Wall Street Journal:

ObamaCare Mulligan

APRIL 26, 2010

When President Obama signed his health-care reform last month, he declared it will "lower costs for families and for businesses and for the federal government." So why, barely a month later, are Democrats scrambling to pass a new bill that would impose price controls on insurance?

In now-they-tell-us hearings on Tuesday, the Senate health committee debated a bill that would give states the power to reject premium increases that state regulators determine are "unreasonable." The White House proposed this just before the final Obama- Care scramble, but it couldn’t be included because it violated the procedural rules that Democrats abused to pass the bill.

Some 27 states currently have some form of rate review in the individual and small-business markets, but they generally don’t leverage it in a political way because insolvent insurers are expensive for states and bankruptcies limit consumer choices. One exception is Massachusetts: Governor Deval Patrick is now using this regulatory power to create de facto price controls and assail the state’s insurers as cover for the explosive costs resulting from the ObamaCare prototype the Bay State passed in 2006.

National Democrats now want the power to do the same across the country, because they know how unrealistic their cost-control claims really are. Democrats are petrified they’ll get the blame they deserve when insurance costs inevitably spike. So the purpose of this latest Senate bill is to have a pre-emptive political response on hand…

In Massachusetts, Mr. Patrick says his price-control sally will be followed by reviewing what doctors and hospitals charge—or in other words for price controls on the medical services that make up most health spending. ObamaCare will gradually move in the same direction.

Or maybe not so gradually, judging by the study released last last week by Richard Foster, the Obama Administration’s Medicare actuary. Mr. Foster predicts net national health spending will increase by about 1% annually above the status quo that is already estimated to be $4.7 trillion in 2019. This is one more rebuke to the White House fantasy that a new entitlement will lower health costs.

"Although several provisions would help to reduce health care cost growth, their impact would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions," Mr. Foster writes—and that’s assuming everything goes according to plan. He considers it "plausible and even probable" that prices in the private market will rise as greater demand due to subsidized coverage runs into the relatively fixed supply of doctors and hospitals.

Most of ObamaCare’s unrealistic "savings" come from cranking down the way Medicare calculates its price controls, and Mr. Foster writes that they’ll grow "more slowly than, and in a way that was unrelated to, the providers’ costs of furnishing services to beneficiaries." He expects that 15% of hospital budgets may be driven into deficits, thus "possibly jeopardizing access to care for beneficiaries." Isn’t reform grand?

The official who will preside over this fiscal trainwreck is Donald Berwick, the Harvard professor and chief of the Institute for Healthcare Improvement who the White House has nominated to run Medicare. Dr. Berwick explained in an interview last year that the British National Health Service has "developed very good and very disciplined, scientifically grounded, policy-connected models for the evaluation of medical treatments from which we ought to learn." He added that "The decision is not whether or not we will ration care—the decision is whether we will ration with our eyes open. And right now, we are doing it blindly."

In fact, the real choice with medical care, as with any good or service, is between rationing via politics and bureaucratic lines or via a competitive market and prices. As Democrats are showing by trying to pass a new insurance bill, they want all U.S. health care to function like price-controlled Medicare. Dr. Berwick’s job as the country’s largest purchaser of health care will be to find ways to offset the higher insurance and medical costs that ObamaCare’s subsidies and mandates will cause, which will inevitably mean political rationing of care.

In a 17-minute, 2,600-word answer to a question about tax increases in Charlotte, North Carolina earlier this month, Mr. Obama mentioned that "what we’ve done is we’ve embedded in how Medicare reimburses, how Medicaid reimburses, all these ideas to actually reduce the costs of care." The embedding via price controls is already underway.

As usual, the Wall Street Journal’s editorial page gives us more news than is usually found on the front pages of most newspapers.

This piece actually explains in English the cryptic and probably purposefully confusing article that the Associated Press buried published yesterday.

In a nutshell, the Democrats now wants to give states the power to control how private insurance companies reimburse for medical treatments, just like how the federal government controls how and for what Medicare reimburses.

(And we have all seen how well that has worked out.)

The Democrats in Congress know that the results of this new power will be so ugly — rationing, in one form or another — that they want the states to take the political hit.

Why else would Congress give away a power they could have for themselves?

This article was posted by Steve on Monday, April 26th, 2010. Comments are currently closed.

7 Responses to “Dems Push Price Controls For Insurance”

  1. U NO HOO says:

    Price controls are the goal of a would-be monopolist.

    Get it?

  2. Liberals Demise says:

    Three Card Monty, the Shell game………………
    The dems have turned into regular Flim-Flam artists.

  3. proreason says:

    Nixon’s price controls kicked off the lost decade of the 70’s. By the time it was ended, interest rates had crossed 20% and inflation was about 11%.

    It was the greatest economic disaster since the 30’s, particularly for seniors or people who wanted to buy homes………..until now.

    So the marxists solution, of course, is to do the same thing. They know how disastrous it will be. If they are able to keep the price controls going for a few years, they will win their battle to create their 2-class society…….commissars and mud-squatting serfs. It’s their decades-old dream.

    Since the laws of economics can not be suspended, the people will have to suspend the marxists.

  4. JohnMG says:

    …..”This piece actually explains in English the cryptic and probably purposefully confusing article that the Associated Press buried published yesterday……”

    Not surprising at all when you consider the full name of the news(?) agency should read ‘Associated (with every extreme, liberal nut-case) Press’.

  5. confucius says:

    In 2009, Dr. Berwick published a paper asserting healthcare should be driven by what the patient wants and not needs.

    From Health Affairs, 28, no. 4 (2009): w555-w565:

    What ‘Patient-Centered’ Should Mean: Confessions Of An Extremist

    by Donald M. Berwick

    The concept of the medical home (a practice team that coordinates a person’s care across episodes and specialties) is now reaching center stage in proposals for redesign of the U.S. health care system. … The question remains open, however, about the degree to which medical homes will shift power and control into the hands of patients, families, and communities. In this paper I argue for a radical transfer of power and a bolder meaning of “patient-centered care,” whether in a medical home or in the current cathedral of care: the hospital.

    For better or worse, I have come to believe that we—patients, families, clinicians, and the health care system as a whole—would all be far better off if we professionals recalibrated our work such that we behaved with patients and families not as hosts in the care system, but as guests in their lives. I suggest that we should without equivocation make patient-centeredness a primary quality dimension all its own, even when it does not contribute to the technical safety and effectiveness of care.

    Three useful maxims that I have encountered are these: (1) “The needs of the patient come first.” (2) “Nothing about me without me.” (3) “Every patient is the only patient.”

    My proposed definition of “patient-centered care” is this: The experience (to the extent the informed, individual patient desires it) of transparency, individualization, recognition, respect, dignity, and choice in all matters, without exception, related to one’s person, circumstances, and relationships in health care.

    (1) Hospitals would have no restrictions on visiting—no restrictions of place or time or person, except restrictions chosen by and under the control of each individual patient. (2) Patients would determine what food they eat and what clothes they wear in hospitals (to the extent that health status allows). (3) Patients and family members would participate in rounds. (4) Patients and families would participate in the design of health care processes and services. (5) Medical records would belong to patients. Clinicians, rather than patients, would need to have permission to gain access to them. …

    First, leaving choice ultimately up to the patient and family means that evidence-based medicine may sometimes take a back seat.

    Second, firmly vest in patients and families control over decisions about care in all its aspects. Take over control only rarely and with permission freely granted.

    Third, extend transparency to all aspects of care, including science, costs, outcomes, processes, and errors.

    I freely admit to extremism in my opinion of what patient-centered care ought to mean. I find the extremism in a specific location: my own heart. …

    What chills my bones is indignity. It is the loss of influence on what happens to me.

    Call it patient-centeredness, but, I suggest, this is the core: it is that property of care that welcomes me to assert my humanity and my individuality.


    Does Obama know about this paper?

    Better yet, does Dr. Berwick?

  6. joeblough says:

    The political mind in action.

    Create a problem. Then create another problem to solve the first.

    Blame everybody else at every step.

    Low life scum.

    • All the more reasons to be completely obstructionist.. Have NO PART in the ongoing screw ups the ruling Junta is creating, or be a legitimate cause.

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