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How socialized medicine hurts everyone

How socialized medicine hurts everyone

Idaho Freedom Foundation staff
March 1, 2019

By Dr. John M. Livingston | Medical policy adviser

We hear from all quarters that healthcare is a complex issue and solutions are difficult to implement. One political faction argues for a single-payer, command-control healthcare system. Conservatives like to point out that we haven't had an unfettered healthcare marketplace since 1965 and the problems we have today with costs, quality, and access are the direct result of devolution into socialized medicine.

There has been testimony before state legislative committees that patients on the margins have been harmed because of their lack of access to medical services. But is the lack of access any different for Medicaid patients than for patients with commercial insurance who have to pay 20 percent copays and deductibles(capped at $7,500), forcing them to stay away from emergency rooms and clinics because they can't afford these costs even though they have healthcare insurance? Are just as many of them suffering from lack of access as the indigent?

A medical doctor testified before one committee last year that our healthcare system in the United States was 35th in a ranking by the World Health Organization.In that same 2016 document, the WHO pointed out that methodologies for defining endpoints for morbidity and mortality differ greatly between countries. As an example, they pointed out that the U.S. counted neonatal mortality as any live child delivered irrespective of gestational age, when many countries only counted full-term deliveries. In a footnote, they opined that if the U.S. had used similar methodologies, it would rank third in the world instead of 35th. I am sure the doctor

testifying before the House Health and Welfare Committee either didn't take the time to read the footnote or purposefully didn't disclose the information to the committee because it didn't fit his narrative.

The truth is, in almost all the Western industrial countries we have either hybrid healthcare systems or two-tiered systems. In Canada, more 50 percent British Columbia residents have health insurance via a private carrier. They come to the U.S. for high-risk obstetrics; neonatal, cancer, and heart care; and complex medical imaging.

Invoking public health investment as the solution to these discrepancies is short-sighted. Clean water, air and food, and vaccinations make huge differences in public health, but the major causes of death in the U.S. between the ages of 5 and 55 are smoking, traumatic accidents, cancer, obesity, and diabetes. These, for the most part, aren't public health issues,

but issues of individual responsibility.

In the U.S., the medical causes of morbidity and mortality and the impact of modern medical care strategies for diseases like cancer, infectious diseases, prematurity and it's complications to babies, heart disease, and the care of the injured patientboth in civilian and military, have no other country that can come close to our success.

In Great Britain, more than 50 percent of the population has private health insurance. Private medicine thrives in these countries as do private hospitals clinics and ambulatory centers, but many patients travel across the pond for their medical care. Net import/export for medical services runs above 90 percent and if one were to count overseas missions on the plus side of that balancewe are actually exporting free services, that number is well over 98 percent. If our healthcare system is in fact inferior why do sick people come to our country for care and invite us to their countries?

In the U.S. today, 55 percent of healthcare is either given directly by, subsidized directly by, or incentivized via tax credits from government. Medicare, Medicaid, Tri-Care, the Veterans Administration, and the Indian Health Service fall into this category.

Let me use a simple example of how a well-meaning government program can hurt the people that need the most help.

We all agree that those living on the margins, who through no fault of their own cannot take care of themselves, many times because of their chronic conditions, need to be assisted and helped.

But I would like to point how subsidies and incentives can actually reduce the access that the traditional Medicaid population has to providers and how providers have adjusted their business models to increase profits on the backs of taxpayers.

I am familiar with the conditions in Idaho's rural communities because for 20 years I oversaw a weekly clinic and operated in Emmett Idaho.

I will use small round numbers to make my point. Then I will repeat the argument with real numbers provided by Medscape, an online medical education and Coalescing, a service that most doctors access every day.

Say the average family practitioner sees 10 patients a day and gets $10 per patient. At the end of the day he would bring in $100 of revenue.

Average overhead for employees, rent or mortgage for the office and malpractice coverage is $60 per day. The doctor then takes home $40 daily.

Now say that same doctor takes on three Medicaid patients who pay him $5 per visit instead of $10. He will then have $85 of revenuea 15 percent decrease with $25 left over to pay himself.

Should that doctor take on two more Medicaid patient, giving him five commercial and five Medicaid patients, he would receive $75 of revenue and take home $15 daily. With each new Medicaid patient the doctor sees less marginal income. If he saw 10 Medicaid patients only he would lose $10 each day.

So what does the doctor do? She can see more Medicaid patients with less time for other patiences. What happens in this situation is the patient pool is culled, the doctor will see only those Medicaid patients with few or simple problems. Those complicated patients will shifted to other providers, many times to places distant from where their homes and families are.

Or, the doctor can put a cap on his Medicaid patient percentage, which could also limit access.

The final solution is for the doctor to join a large provider network, an Accountable Care Organization (ACO). By having many doctors join a few organizations it actually limits economic supply and increases prices.  

But also the providers themselves take advantage of the new laws and in many instances double bill for services. That same office visit described above for the private doctor that was billed out at $10 per visitprofessional fee onlyis now billed out at $20, which covers a facility fee in addition to professional. The private doctor again can only charge the professional fee.

In addition, the large provider conglomerates can get direct payments from government agencies in the form of disproportionate use payments. That stated, one of one of the good things about the Affordable Care Act is that these payments are being phased out, as are activation fees for certain specialty designated facilities. And who pays for these additional charges? Taxpayers.

So, the average physician seeing 30 patients a day bringing home $225,000 per year, if instead she sees only Medicaid patients, needs to services are being discounted by Medicaid or indigent patients she will either stop seeing patientswhat many doctors have done when they retire earlyor she will change the acuity of patients she is taking care of. Access then becomes limited.

Most of the Medicaid gap population, we are told, is healthy. We also know that the average patient receiving traditional Medicaid is sicker than the average patient. The simple way for providers to make ends meet is to see more of the gap patients and fewer of the sicker patients.

In reality, the government program is forcing providers to discriminate against sick patients.

We are blessed in Idaho to have an outstanding medical community of doctors, nurses, technicians, physicians assistants, and family nurse practitioners. But ask almost anyone, also ask paramedics and emergency medical technicians who work on squads and Life Flight—ask anyone other than a hospital administrator or upper managementand they will confirm what is happening in medicine today. Sick patients themselves are being discriminated against because they cut into the margins of the large nonprofits.

I went into medicine to take care of sick patients, not subsidize large hospital systems and insurance carriers who, it must be said, adjusted to the new rules of the medical reimbursement game on the backs of patients (medical bills) and citizens (taxes for subsidies and incentives).  More than 80 percent of patients have insurance and have seen their health care premiums go up more than 200 percent over the past eight years, not to mention increasing co-pays and deductibles They are also seeing their taxes go up.

So now you see how the payment system plays out at the bottom end.

Shouldn't the doctor-patient transaction be put at the top?

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