Seeing the Bleak Future of Obamacare in the UK and Canada

Posted by PITHOCRATES - May 6th, 2011

The UK and Canada look to the Private Sector to Rein in Health Care Costs

The UK founded the National Health Service (NHS) in 1948.  That’s over 50 years ago.  And you know what they say?  Practice makes perfect.  So the UK must really have this national health care thing down, right?  Delivering everything President Obama promises to deliver with his Obamacare.  Affordable yet quality health care for everyone.  For the problem the Americans have been having is that they don’t have a national board yet to limit health care costs.  To tell providers how much is enough.  To swat them on the nose with a rolled up newspaper and say, “Bad, health care provider.  Bad.  You have to learn to stop being so greedy.”  Like they must be doing in the UK (see Kill or cure by The Economist posted 5/5/2011 on The Economist).

THE government has put its ambitious health-care reforms on hold, while David Cameron tries to calm a bout of anxiety in his coalition. However, many hospitals are already finding that a combination of rising costs, heavy debts and looming budget cuts is forcing them to seek mergers with stronger institutions or even private-sector takeovers. Even less palatable for the coalition—and patients—there are worries that as the government seeks to save £20 billion ($33 billion) in hospital running costs over the next four years, some closures may be inevitable.

Iain Duncan Smith, a predecessor of Mr Cameron as Conservative leader, last month signed a petition outside 10 Downing Street against closures of the emergency and maternity units of a hospital in his London constituency. Trafford hospital near Manchester—the birthplace of the National Health Service (NHS), where its first patient was treated on its founding in 1948—is considering privatisation, among other options, to resolve its debt crisis. In London, three big hospitals, including the historic St Bartholomew’s, are contemplating joining up into one “superhospital”.

Well, that’s odd.  You see, the UK has a national board to control health care costs.  So they shouldn’t have rising costs.  Heavy debts.  Looming budget cuts.  Mergers.  Or private-sector takeovers.  But here the UK is.  Doing exactly these things.  It makes one wonder why the Americans want to go down this road when the UK has demonstrated that it is the wrong road to go down.  Unless it’s not about providing affordable yet quality health care for everyone.  But the government taking over one-sixth of the nation’s economy.  Whatever the consequences to the quality of health care.

Given how Britons cherish the NHS, privatisations of hospitals might prove as controversial as closures. The government wants a “mixed economy” in the health service, citing Hinchingbrooke hospital in Huntingdonshire as an example of its readiness to bring in private-sector innovation. It will shortly become the first NHS general hospital to be franchised to a private company. Indeed, in Canada’s generally well regarded health service, hospital treatment is often provided by charitable or private operators, with the state paying the fees—so there is no reason why more private-sector involvement in Britain’s NHS would put its principle of free treatment for all at risk.

So things may not be that bad.  The NHS may just become more like the Canadian health care system.  In Canada, the Canada Health Act (CHA) determines how the government reimburses private health care providers for their services.  And it is these private health care providers who hire doctors and nurses.  And funds their retirement.  They are not government employees.  Like in the UK.  Canada is more like the USA.  Only with a single insurance company, i.e., a public option.  So the Britons don’t have to worry about change per se in paying for health care.  It will still ultimately come from tax dollars.  And they will have the same problems they currently have in the UK (see Canada’s health care crisis is an economics problem, not a management problem by Brett J. Skinner, President and Director of Health Policy Studies and Mark Rovere, Associate Director of Health Policy Studies Fraser Institute, posted 4/19/2011 on Troy Media).

Government health spending is growing at unsustainable rates, while patients are facing shortages of medical resources and declining access to necessary medical care.

The Canadian health system has been run as a government monopoly since 1970. It doesn’t really matter which level of government tries to manage the system, our experience shows that political planning doesn’t work. Adding federal management would be as effective at averting disaster as rearranging the deck chairs on a sinking ship.

So, yes, the UK is looking to the Canadian system as a lifeboat for the NHS.  Unfortunately, the lifeboat they chose also happens to be sinking.

This cost crisis is happening despite significant government efforts to centrally restrict spending on health, which has resulted in shortages that create long waits for access to necessary medical goods and services.

The Fraser Institute’s annual survey of Canadian physicians shows that, in 2010, patients waited approximately 18.2 weeks from the time they obtained a referral from a general practitioner to the time they received treatment from a specialist. Although health spending consumes a larger share of provincial revenues each year, Canadians are waiting 96 per cent longer for surgery than they did in 1993 when the average wait was only 9.3 weeks long.

The problem is that both the NHS and the CHA have the same problems.  Adopting a system more like the other doesn’t get rid of those underlying problems.  There is something they both can do, though.  Use less government.  And more market forces.

The real solutions are quite simple: user fees and private insurance options would introduce economic incentives for efficiency that would regulate supply and demand, shift costs off the public system and offer a sustainable source of additional resources.

The US has private insurance options.  For now, at least.  But they wrote Obamacare to put them out of business to get the public option in through the back door.  A two-step process to get the US to a national health care system.  So they can have the same problems as their dear friends in Canada and the UK.

National Health Care makes Unhappy Health Care Providers

The problem with a single-payer system is that there is no competition to keep costs down.  That’s what a free market economy does.  Keeps prices down.  That’s why one store can’t sell a TV set for $2,500 when another sells the exact same set for $750.  Because consumers will not pay more for the same thing.  That’s what competition does.  Makes people honest.  Without competition, though, you have to trust someone.  Or some panel.  To set fair prices.  And fair salaries and benefits.  And when costs are too high the only options available are to ration services.  Or pay health care providers less.  Or make them work longer hours for the same pay (see NHS reforms push third of GPs to head for exit by Laura Passi posted 5/5/2011on PulseToday).

The first part of Pulse’s State of the Profession Survey, published this week, paints an alarming picture of GPs’ working lives, suggesting they are being forced to work longer hours, are spending less time with patients and are struggling to meet expectations as a result. Almost half of the 576 GPs who responded to the poll reported they were suffering from stress.

But it is the fallout from the Government’s far-reaching NHS reforms that appears to have pushed the number of GPs looking to quit to the highest level for more than a decade, with 71% claiming morale had fallen as a direct result of the health bill and only 9% saying it had risen. Just 18% said they believe general practice is currently moving in the right direction.

Here’s a news flash.  Being a nurse is hard.  Being a doctor is hard.  Telling them that they have to work longer and harder for less pay just isn’t going to get people to go into medicine.  Or stay in medicine.

BMA chair Dr Hamish Meldrum told Pulse he feared low morale could lead to an exodus of senior GPs.

He said: ‘Morale isn’t that good when it comes to things like pay, the threats to pensions and the various other things that are going on in the NHS.

Yes, we want you to sacrifice and give all you can so we can live healthier lives.  But we don’t want you to get rich in the process or enjoy life.  Your reward should be knowing that we can live a long and healthy life so we can get rich and enjoy life.

Dr Julia Hodges, a GP in Elephant and Castle, south London, was one of many to blame the fall in morale on the NHS reforms: ‘A lot of people feel quite betrayed because the story was that there would be no major top-down reorganisation, and then suddenly the biggest changes since the inception of the NHS are being discussed. I feel the changes are badly thought out and so destructive. Inevitably there has to be more rationing, more cuts, more waiting lists. I think it’s going to be really unpleasant to try and commission services when the budget is shrinking rapidly.’

Yeah, it has to be this way.  Because when there is no competition, the only way to cut costs is for someone or some panel to determine who they are going to pay less.  Or who they are going to make work harder for the same amount of pay and benefits.

It’s about the Power and the Money

When it comes to the health care debate in the United States, people have to understand it’s not about providing affordable and quality health care for everyone.  It’s all about political power.  And the money.  The utopian solutions pointed to in the UK and Canada are not the utopias some think they are.  Their cost problems are worse than the American cost problems.  But does that dissuade the defenders of Obamacare?  No.  Which should tell you everything you need to know about their true intentions.

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The International Fight against Universal Health Care

Posted by PITHOCRATES - April 16th, 2011

The Most Effective Cost Control Mechanism is Market Forces

They keep saying that they’re not trying to nationalize our health care.  In fact, Obama promised that if you liked your doctor you could keep your doctor with the new Obamacare.  Of course, that decision won’t be entirely yours.  For your doctor may choose to drop you.  And if they keeping cutting Medicare doctor reimbursements, doctors will finally say enough is enough.  I’m outta here.  No more Medicare patients.  Which could force you to find another doctor.  Even though Obama promised that wouldn’t happen.

There’s a lot of talk about controlling costs in Medicare.  And there’s only one way to that with the current system.  You pay doctors less.  Which they are always trying to do.  Is that fair?  Put yourself in their position.  Would you keep seeing patients?  After doing what so few other people do (go to college, medical school, serve an internship and a residency after racking up huge student loan debt that has to be paid back at the same time you have to pay ever rising medical malpractice insurance premiums leaving you with little money to enjoy the first decade or so of your new medical career)?  Because some government bureaucrat says you’ve earned enough money?  All the while no government restrictions are placed on public sector pay and benefits?  To add the ultimate insult to injury, a lot of those same bureaucrats telling doctors that they’ve earned enough money and should be happy with what the government deems is appropriate will no doubt make more than the doctor.  With far less training.  And far less responsibility.  Which just ain’t right.

They like to blame the doctors for the runaway costs.  But they’re not the lone scapegoat.  They also blame the pharmaceutical companies.  The hospitals.  And, of course, the great ‘big bad’ in the health care industry, the insurance companies.  Whose costs keep going up.  Greater than the rate of inflation.  So the runaway costs in the health care system must be their fault.  Because they’re greedy.  It can’t have anything to do with the system we force them into.  Where third party payments shut out all market forces (the person receiving the service isn’t paying the bill), thus eliminating the only effective cost control mechanism.  And introduces government.  Making health care a public good.  Where non-health care government bureaucrats determine fair pricing, supply and demand.  And you know where that will lead to.  To the here and now.

Labour fights against Market Forces for the NHS in the UK

Government bureaucrats don’t like privatization.  Or market forces.  They’d rather manage things.  Because they’re smarter.  Narcissistic.   And they covet that money and power.  They want all those tax dollars funding health care to go through their fingers.  And having people dependent on them for their health care makes that a whole lot easier.  So when conservatives try to introduce effective cost mechanisms, liberals push back.  In the US.  In Canada.  And in the UK (see NHS bill to ‘substantively’ change, says Oliver Letwin posted 4/16/2011 on the BBC).

Labour wants the plans for the NHS in England, which encourage more private sector competition, to be scrapped.

Under the shake-up, GPs are also to be given control of much of the NHS budget.

To cut costs, reduce wait times and improve quality of the NHS, the UK is trying to decentralize the NHS.  Give more decision-making authority to the general practitioners (GPs) in the local communities.  Letting the local health care providers in the communities they serve determine how to best spend the NHS money.  Which, of course, is anathema to Big Government liberals.  Such as Labour in the UK.

Liberals fight against Market Forces for the CHA in Canada

Wherever you find national health care, you’ll find bitter partisan debate over the money paying for that health care.  Except in Cuba.  Or North Korea.  Luckily, for them, there are no opposition parties.  And no one complains about anything.  For they know better.  But Canada has a national funded health care system.  And opposition parties.  Which can get pretty nasty when they’re trailing in the polls (see Liberals drop gloves with attack ad on Harper’s ‘secret’ health agenda by John Ibbitson posted 4/16/2011 in The Globe and Mail).

Conservatives are reacting with fury to a Liberal attack ad that accuses them of harbouring a secret agenda to cut health care funding if they obtain a majority government.

“The Liberal ad uses some of the dirtiest tricks in the book — including twisting words out of context and deliberately altering dates to make old words appear recent,” Tory campaign manager Jenni Byrne wrote to party supporters in reaction to the new attack ad.

In America, the go-to strategy is to threaten Medicare.  In the UK it’s the NHS.  In Canada, it’s the Canada Health Act (CHA).  The reason is, of course, the sheer size of this budget item.  If you’re trying to cut a budget deficit, that’s where you do it.  Cuts elsewhere just won’t be big enough to matter.  And everyone knows it.

If Mr. Harper is given “absolute power,” the ad warns, he plans to cut $11-billion from the federal budget. “Where would Harper’s cuts leave your family’s health?” the narrator asks.

“The stakes are too high. Vote Liberal.”

So you threaten certain death for you and your family should the opposition get elected.  While all the time promising yourself to cut the deficit.  Which, of course, you won’t.  For it will require cuts in health care funding.  And you’re not going to do that.  For there will be another election.  Eventually.  Sure, it makes you a hypocrite.  But a hypocrite with a job.

The Conservatives do plan to cut government spending as part of their own plan to balance the budget, but they promise to do so without reducing transfers to provinces, including health transfers.

It is true that the Liberal government of Jean Chrétien cut funding for health care in the 1990s as part of its efforts to eliminate the federal deficit. Once the budget was balanced, the Paul Martin government signed a ten-year accord to increase funding by six per cent a year. The Conservatives, when they came to power, honoured that commitment, and pledge to continue the arrangement, as does Mr. Ignatieff.

Anyone living near the Canadian-US border only knows too well the consequences of painful health care cuts.  When doctors and nurses get pay cuts, they scoot across the border for higher paying jobs in the US.  Which makes Canadians’ long waits for health care even longer.  This is the ultimate consequence of national health care.  Cost problems you solve by rationing services.  Whether in the UK.  Canada.  Or the USA.

Massachusetts:  Blueprint for Obamacare

We have Obamacare now.  Maybe.  We’ll see.  There’s a popular movement to repeal it.  After it was snuck through Congress.  By the time people learned what was in it (long after Congress voted it into law), the majority of the population didn’t want it.  It’s a big reason why the Republicans won back the House of Representatives in the 2010 mid-term elections.  For the people felt betrayed by their representatives.  So they fired a bunch of them.  Except Nancy Pelosi.  Who the good people of San Francisco reelected with like 80% of the vote even though her national approval numbers as Speaker of the House were closer to 10%.  Which makes it clear that the San Francisco district she represents is an anomaly in the American fabric.  Where the people think against the national grain, so to speak.  But I digress.

Anyway, before Obamacare there was Massachusetts.  And their little experiment in universal health care.  Which now covers every man, woman and child.  Well, almost.  Only 98% are covered.  That other 2% are the state’s Republicans.  I’m kidding, of course.  I don’t know who that 2% is.  Except that they must be the most unlucky sons of bitches ever to live in Massachusetts.  To live in a state where everyone gets free health care and they still get bupkis.  Imagine how that would make you feel.

But even there, in that universal health care utopia, they have a problem.    They gave health care to everyone (except that unlucky 2%, the poor bastards) but they never figured out how to pay for it (see Massachusetts, pioneer of universal health care, now may try new approach to costs by Amy Goldstein posted 4/15/2011 on The Washington Post).

Massachusetts Gov. Deval L. Patrick (D) is trying to “shove,” as he put it, the health-care system here into a new era of cost control. He is proposing a new way of paying for care that would try to propel changes in the way it is delivered. It would give lump payments to teams of doctors responsible for almost all the care of a group of patients, with bonuses for saving money and dispensing high-caliber services that keep people healthy.

Interesting.  Sort of going the route of the GPs in the UK.  Decentralizing the health care system.  After they just centralized it.

Massachusetts in 2006 created a health insurance exchange, a requirement that most residents carry coverage and subsidies to help them pay for it — central elements now in the federal law. As a result, 98 percent of the residents here are now insured, the highest rate in the nation. But the state’s first round of health-care changes devoted far less attention to medical costs.

“We did access first,” said state Senate President Therese Murray (D). “Now we have to figure out how we afford that.”

Oops.  No doubt during the debate for universal care the opponents said something like, “Are you out of your minds?  You have any idea what something like that will cost?”  Which, of course, the proponents replied, “Don’t worry about it.  We have a plan.”  And that plan was apparently to get the law passed first then figure out how to pay for it.

Fee-for-service medicine “is a primary contributor to escalating costs and pervasive problems of uneven quality,” the commission unanimously concluded in 2009.

Despite the consensus, huge questions loom: Who should be part of the new medical teams? How would the idea work for most doctors who practice alone or in small groups? How much clout should the state wield to blunt the ability of powerful local health systems to drive up costs? And, importantly, how heavy a hand should the government use to compel change?

Fee for service is NOT the problem.  It’s never the problem.  If I want to hire a contractor to build a deck in my backyard, I’ll ask some contractors to quote their fee to build a deck.  If the prices are $15,000, $10,000 and $5,000 for identical services, guess who I’m going to hire.  Now, for the sake of argument, let’s say that each of these prices are fair prices for each of these contractors because of their cost structure (e.g., one may have his office on the beach and pays ten times as much in property tax as the others and therefore has to charge more). 

Now in a system where the government steps in to make prices fair, let’s see what happens.  Say a bureaucrat gets three quotes and determines the fair price is $10,000 (the average of the three).  So the contractor who quoted $15,000 now has to build decks at $10,000 and lose money, eventually going out of business.  The contractor that quoted $5,000 will get rich making over a 100% profit on each deck.  And me?  I’ll end up paying twice as much as I had to for the deck.  This is what happens when you don’t let the market set prices.  You get a mess.

In the pressure-cooker of medical costs in the United States, Massachusetts offers a particularly vivid example. The spending per person on health care is 15 percent higher than the national average — even taking into account the comparatively high wages here and outsize role of medical research and training. The move to near-universal coverage, state figures show, accounts for a sliver of recent increases in insurance premiums, which have soared above inflation. The main reason has been a rapid escalation in prices.

“The growth is outstripping every single measure of society’s ability to keep up,” said Glen Shor, executive director of the Commonwealth Health Insurance Connector, which runs the insurance exchange.

So much for the theory of an insurance exchange being the panacea Obama claimed it would be.  For whenever has a bureaucracy been cost efficient?  Never.  It’s impossible.  You can’t manage an economy and do better than market forces.  It’s never happened yet in human history.  So why do some people (i.e., Big Government liberals) still think they can do a better job?  Oh, but we must remove filthy, nasty profits from health care.  This ‘public good’ deserves better.  It deserves the tender love of a caring government bureaucracy.  Not some evil corporation trying to maximize profits.  Of course, look at what happens when these corporations do just that.  Stuff we like and want to buy is plentiful and inexpensive.  But God forbid if we do that to health care.

Some doctors are embracing the new way of working. David C. Pickul is the medical director of the physicians group affiliated with Lowell General Hospital, in an economically bruised community about 30 miles northwest of Boston. The group is in the third year of a five-year “alternative quality” contract with Blue Cross involving a hub of 70 primary care doctors and a looser group of 200 specialists who are responsible for 20,000 HMO patients. The team now has a financial incentive, Pickul said, to track down patients when it is time for their mammograms or for eye exams for those with diabetes. Under Blue Cross’s quality rating, Lowell has soared the past two years.

Blue Cross is not alone. At Partners HealthCare, the famous Boston-based medical system that dominates health care here, Massachusetts General Hospital has been conducting a Medicare experiment in which nurses are assigned to coordinate care for about 2,500 older patients with multiple ailments. The experiment, which began five years ago, so far has reduced hospital re-admissions by one-fifth and cut medical spending by 7 percent.

“Frankly, the market has already . . . responded,” said Gary Gottlieb, Partners’ president and chief executive. “There is enough momentum for us to do this without instrumental regulation” by the state.

The governor and some other officials disagree. The need to lower costs, they say, is urgent enough that the government should step in, and they have been laying groundwork.

Financial incentive?  Isn’t that another word for profit?  And this pursuit of profits has done what?  Improved patient quality?  Reduced hospital readmissions by one-fifth?  And cut medical spending by 7 percent?  Amazing what will happen when you let the market respond.  What a success story.  But they want to do what?  Step in?  To lower costs?  After the market lowered costs already by 7 percent?  You got to be kidding me.  Whatever happened to if it ain’t broke don’t fix it?

And Alice Coombs, president of the Massachusetts Medical Society, is especially concerned about physicians who work alone or in small groups, older physicians who might choose to retire rather than switch or new doctors who might leave for other states.

And how do you solve that problem?  With compulsory medical service.  Which universal health care coverage gives you.  If you worry about doctors opting out of a new cost-contained system, you make it impossible to opt out.  You simply nationalize health care.  Letting the doctors know, yeah, they may be miserable and unhappy with the new system, but you’ll be just as miserable and unhappy where ever you go.  So why move out of state?  For any where you go, we’ll be there.  Understand?  So just keep curing the people and stop your bitching. 

Sure will make all that medical school, internship and residency worth it, won’t it?

The Song Remains the Same

Liberals everywhere want to expand the size of government.  And a national health care is the holy grail of government expansion.  But everywhere it’s tried the same thing happens.  Cost and wait times increase.  Quality decreases.  And services are rationed.  Most people (especially liberals) want to blame the greed of those who work in health care.  So they come up with new ways to manage and control costs.  Which inevitably adds yet more layers of bureaucracy.  Which benefits liberal governments.  At the expense of the taxpayer.  And patients’ health.

But nothing they try works.  Costs keep going up.  For good reason.  Because the problem is not the greed of the health care people.  It’s the health care system.  There are no market forces in it.  Which is the most efficient cost control mechanism.  Of course, admitting this is an admission that Big Government has failed.  And liberals can’t have that.  So they fight.  Demonize.  And scapegoat. And try to scare the bejesus out of everyone by saying conservatives want to cut health care funding so they can kill your family.

Whatever the name, whatever the country, the song remains the same.  Conservatives will try to cut deficits by reforming the biggest budget item.  And liberals will fight them every step of the way.  Ultimately giving us a health care system with greater costs, longer wait times, lower quality and rationed care.  As demonstrated everywhere in countries with a national health care system.

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