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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Obamacare: Stupid or Devious?

Posted by PITHOCRATES - October 1st, 2010

The passage of Obamacare is cutting quite the swath of destruction in its path.  Businesses had to book million dollar charges to comply with the new legislation.  The requirement to insure children with preexisting conditions has caused insurance companies to drop plans for children.  (Not because they are ogres.  But because no one will buy insurance for their kid until they’re sick or injured.  So the cost of these plans will have to equal the actual medical costs.  So what’s the point?  If you’re paying actual costs just pay them directly to the health care provider.  And cut out the middleman.)  And now McDonald’s may drop their mini-med plans.  Because these low-premium policies have the same overhead as comprehensive plans.  Which means they spend more of the premium on overhead costs (as a percentage) than the big comprehensive plans.  So they can’t meet the required medical-loss ratio (the percent of premiums they must spend on actual health care benefits).

The idea was to prevent the ‘evil’ health insurance companies from paying huge bonuses to their people to keep costs down.  But bonuses are the least of their cost worries.  The Obamacare mandate to cover an additional 32 million people is a much bigger cost worry.  Especially when there is no cap on benefits and they’re required to cover all preexisting conditions.  And you know what?  It can’t be done. 

Oh, there will be a doctor shortage, too.  Especially when we add another 36 million or so to the Medicare program.  (If you’re doing the math, that’s an additional 68 million new patients that will need doctors.  Can you say rationing and ‘death panels’?  Someone will have to decide how to use these limited resources.  Replace the hip of an 89 year old grandmother?  Or do the appendectomy on the 21 year old man?)

Obamacare is a train wreck.  You have to ask yourself how did they make such a mess of it.  Well, there are two possible answers.  Either they’re just stupid and these are all unintended consequences.  Or this was the plan all along to kill the private health insurance industry.  So the devious bastards could get their public option/national health care they’ve wanted all along.

You can read McDonald’s May Drop Health Plan by Janet Adamy on the Wall Street Journal on line for more detail.  McDonald’s has denied this, however.  You can read the AP’s Health care law may hamper limited insurance plans by Tom Murphy on Yahoo! Finance for their denial.  Whether or not McDonald’s is considering dropping their mini-med plans (unless they get their exemption) doesn’t change the fate of these mini-med plans under Obamacare.  Those mandated medical-loss ratios could push these very popular plans into extinction.

Lying or stupid.  Either way it’s bad for us.

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