Elkhorn Creek Lodge

Socialized Medicine; Stiffing and Snuffing

Posted in economics, medical by Eugene Podrazik on May 10, 2009

A few thoughts about Barry O’s plan to take us to universal health care nirvana.  It’s real expensive.  Now in a the-dog-ate-my-homework moment, we have even newer tax proposals to pay for the monstrosity.  

First the stiffing.  Medical care consumes about 14 to 18 percent of the GDP which works out to about 1.8 trillion dollars annually (these are rough figures).  Already 800 billions dollars are in some way tied up with governmental programs such as Medicare and the like.  So, the question is what to do about the one trillion dollars that still lie in the private sector.  But, the biggest dead beat in the medical system is the government; not the uninsured.  Which means that trillion dollars isn’t just lying around just waiting to be expropriated, banana republic style.  That trillion dollars is already tied up in propping up governmental programs.  

This money, the private sector money, already makes up for shortfalls in the form of cost shifting.  The practice of charging more in other areas to make up for shortfalls in governmental reimbursement.  Moreover, there are any of a number of unfunded governmental mandates regarding requirements of the rendering of care.  EMTALA (the Emergency Medical Treatment and Active Labor Act) requires, regardless of ability to pay, legal status or citizenship, that hospitals provide emergency treatment regardless of ability to pay.  The law provides no mechanism for funding this mandate.  And, something like half of all emergency room presentations go uncompensated.  These costs are written off as bad debt by the hospitals.  Or, these costs are built into general costs and charges of the hospital to make up that shortfall.

And, as big a money loser EMTALA is, it really get expensive when it comes to trauma care where you can run through $20,000 worth of care in the first 2o minutes of presentation.  And, a lot of these folks aren’t just innocent bystanders.  Drunks with jaw fractures who were “just minding their own business” at the local bar.  Or, drunks, laced with other illicit drugs who happened to roll their cars in a motor vehicle accident.  Also, very likely not wearing seat belts.

The bottom line is that that trillion dollars in the private sector isn’t free and clear.  Huge chunks of the money are already accounted for and spent to keep Medicare and Medicaid from collapsing.  Trauma and emergency rooms services are, in essence a tax amounting to hundreds of millions of dollars, given gratis but virtue of unfunded governmental mandates.

This trillion dollars is also what brings new innovation to medical care.  Demographically driven medicine, a large part what falls into public health, will no longer yield significant savings or new treatment horizons.  Epidemics of, say, cholera, are largely things of the past simple because we’ve already invested in sewers and municipal water systems.  Vaccines are now common place.  And, so on.  Health Maintenance Organizations (HMO’s) have been playing this worn out turn since the 1930’s without any measurable effect.  

In the same fashion, Obama’s proposal to create some governmental program to “honestly broker” treatment options.  He makes a hypothetical of say Minnesota doctors treating patients of 25 percent less than, say, Florida doctors.  But, these guidelines work except in exceptions.  Which happen just about every time you see a patient.  Moreover, Florida’s residents being, on average, older that those of Minnesota, will likely have sicker patients requiring more resources to obtain a similar outcome.  And, everyone would just be healthier if they would all just exercise, cut those trans-fats and stop sitting in front of computers blogging.  So, shall we have the health police banging on our doors every morning so we get out and exercise.  And, shutter every McDonald’s.  Maybe, in the name of health care savings those Florida residents should do their patriotic duty and just die (more below).

The real frontier is technology driven medicine.  This frontier is hard to predict in terms of breakthroughs; and these breakthroughs create new arenas for medical treatment.  They create more demand.  They create more cost.  Because people actually want this treatment because they want to live and live comfortably.  But, this area will be sucked dry because of the cost and in order to limit care (see, again, below).  MRI scanners have allowed more accurate diagnosis in a myriad of disorders.  Our small town of Casper, Wyoming has four or five such machines.  More that entire Canadian provinces.  But, accurate diagnosis leads to unanticipated demands in whole new arenas of treatment.  Socialism above all requires stasis and ossification.

Then, to, is the fact that much of the medical infrastructure comes from the private sector.  Whether a private doctor’s office or a major medical center.  Governmental medical programs have largely piggy-backed on the infrastructure.  In many respects, governmental medical programs have largely survived because these programs merely make use of capacity at the margins.  Economic medical decision making is first of all, based on the economics of private sector finances.  Only then do you figure out if a given service can stand, economically, on governmental reimbursement.  If new medical initiatives rested on reasonable profits from governmental medical programs, you’d see all sorts of medical construction in our inner cities.

Finally, of course, will be the stiffing of the doctors themselves.  It will be some sort of pressure that will evolve from government fiat and monosopy power as a single payer.  Surgeons and specialties that do procedures can better survive, to a point, because one can be reimbursed both the procedure and the visit.  But, a primary care doctor, without the benefit of procedures, is going to go out of business.  A grim reality even today as Medicare patients are having increasing difficulty finding doctors that will take Medicare.

But, while those “bad” doctors may be everyone’s favorite whipping boy, are you also going to cut reimbursements in the form of salary cuts to our nurses?

The bottom line is that trillion private sector dollars will become a recurrent cost annually.  It might inject some honesty into the system since the unfunded mandates will also become a formal governmental responsibility.  Therefore, each and every year, the federal government will need to raise one trillion extra dollars just to nationalize what we have.  New initiatives?  New coverages?  New innovations?  That’s going to cost extra.

Now the snuffing.  As in killing.  And, this will ultimately be the effect of rationing.  In some fashion, rationing of medical care will result in people dying.  And, on purpose for reasons outlined below. 

Can this really happen?  Well, yes, because is already is in a sub rosa fashion.  The great tobacco settlements were supposed to drive a stake in the heart of big tobacco.  And, those settlement monies were to educate the public to finally put an end to that filthy habit of smoking.  We’ll pass over the fact that humans have been smoking and fermenting just about every plant since time immemorial.  What really happened was that every state in this settlement became a knowing partner in the enterprise of tobacco use because of the tax revenues.  And, states, instead of taxing cigarettes out of existence, tax at a rate to maximize revenue.  Moreover, state treasury officials know that smoking usually kills the smoker of a nice clean heart attack at about age 60; thereby freeing the state of any expense for future state Medicare and Medicaid expenditures.  It’s a wonder that the Social Security Administration isn’t pushing to revitalize smoking habits.

Debates over state motorcycle helmet laws now revolve on the fact that lack of helmet wearing usually results in the motorcycle rider being killed outright.  A much cheaper out come that treating a helmet-wearing rider who survives but with severe, very expensive to treat injuries.

Europe’s experience with euthanasia has already crossed a number of ethical barriers.  Doctors increasingly make decisions out of greater loyalty “gate-keeping” state medical resources than loyalty to a patient.  Elderly in Holland are afraid to go to the hospital over this very fact.  This fear serves as a great rationing tool since the hospital isn’t expending resources on that patient.  If that patient were to die, all the better, since dead patients are really cheap to treat.

A colleague tells me, that in New Zealand, cardiac surgeons don’t work very hard.  On purpose.  It can literally take months to get a heart operation.  You might even die in the interim.  More bottom line savings.

And, oh, did you know that approximately 50 bucks of Pentothal is a lot cheaper than 100,000 dollars of hospice care?

Rationing is particularly pernicious to American Exceptionalism and a governing philosophy that organizes around the concept of the maximization of individual liberty (the pursuit of happiness).  Yes, as a surgeon, I have participated in the agonizing decision on when to “pull the plug” on a hopeless ill, dying patient.  And, in doing so, have had to face the fact the in this particular case, any further efforts are simply futile.  But, this was a decision entirely made by private parties.  Done only after assuring ourselves that we left no stone unturned.  Done without the intrusion or pressure of outside parties with other agenda, read financial, forcing a decision.  This was a decision with me acting with an overarching philosophy that only the best interest of my patient matters in this decision.

One must understand the tension of medical economics and Judeo-Christian morality that plays in this issue; and how government sponsored rationing will tear down the latter.  In tearing down the latter, to spawn an attitude that runs contrary to the importance of the individual and individual rights.  Those individual rights that are central to this thing we call Western Civilization. 

Modern medicine operates at the margins.  As a volunteer manager of our mutual medical insurance plan, I note, in reviewing our financial data, that 20 percent of our members covered consume 80 percent of the resources (in the form of medical benefits paid out) and the other 80 percent consume on 20 percent of the resources.  In the case of Medicare, we find that your last year of life, your last hospital admission, will be the most expensive.  Some 30 to 50 percent of Medicare expenditures specifically fund these very expensive end-of-life events.  Note, by being on the margins that many of these patients are in no real position to defend themselves.  Their illnesses impair their ability to work with a concomitant income disadvantage.  They are individuals, who if they died, wouldn’t materially affect statistics such as longevity and infant birth rates; especially if you knew how to fudge those statistics.  If you count infant mortality rate as only term babies, the infant mortality rate for premature births never comes on the radar.  You’re only a step away from saving enormous bucks by letting those premies, just, go.  If you’re in the last year of life, on that last hospital admission, national longevity statistics aren’t going to materially change if, you, just, pull the plug.  There’s hundreds of millions of dollars on the line if you do.

On the other hand, there is the temptation to move  into post-Christian (? pre-Islamic) America and abandon the Ten Commandments and their requirement to honor our mothers and fathers.  Well, maybe the ten suggestions.  There is the temptation to abandon the concept that every human is indeed a unique individual, created by God in His own image.  There is temptation no longer respect a life time of work and contributions of our elders and give comfort  and respect in their old age; rather, to discard them with the old Chicago Machine greeting of “Yeah, but what have you done for me lately.”

There is a temptation to embrace your inner socialist and no longer regard each citizen of our republic as a resource and spark of creativity.  But, to regard people as so many parts of a machine that consume food, shelter and create a big carbon footprint.  Machine parts to be discarded and replaced as they are worn out.  It becomes tempting as a “gate-keeper” to dole out medical resources only to repair those “parts” that are still functioning and “worth” repairing.  It becomes tempting to, say, regard every retiree as useless dead weight, past prime and past repair, to be discarded since maintenance now far exceeds the replacement cost.  Especially if your butt isn’t on the line.

It is only that trillion dollars, in private hands, that will effectively enforce the precepts of the sanctity of the individual and stand firm against the financial temptations to cut ethical corners in the name of preserving the public’s” medical resources.


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