Tag Archives: Congressional Democrats

Driving Your Doctor Out Of Business

It began almost as a footnote. 

Five months after Obamacare was passed, members of the Obama administration quietly published an article in The Annals of Internal Medicine describing the law’s planned impact on physicians.  

Shortly thereafter, the piece disappeared and was replaced with a more benign one, with the obvious cooperation of the journal. 

You won’t be able to find the original. It’s been wiped from the internet. 

(And no, not “like with a cloth or something.”)

What was so controversial about the article?

The admission that the law aimed to eliminate private medical practices — and drive physicians into the arms of hospital bureaucrats and huge medical groups. 

From the original:

“The economic forces put in motion by [the ACA] are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups … Physician practices that accept the challenge will be rewarded in the future payment system.”

The article’s authors were Nancy-Ann DeParle, JD, Office of Health Reform director, Robert Kocher, MD, formerly from the Obama National Economic Council — and the now rather infamous Ezekiel Emanuel, MD, Obamacare architect and a really special kind of bad guy.

What’s “vertical organization?”

In Medscape Medical News coverage of the piece, the writer likened “vertical organization” to the military and the federal government.

“This business catchphrase refers to enterprises
with a hierarchal structure and centralized management.
An integrated delivery system that owns hospitals,
medical practices, and other healthcare services is a prime example.”

Wow. Sure sounds like single payer, doesn’t it?

And the Obamacare masterminds have been largely successful in moving the medical community in this direction. Journalist Keith Speight observed in 2013 that:

“While the shift away from private practices was already under way prior to Obamacare, the legislation definitely threw gasoline on the fire.”

In its 2014 survey, the Physician’s Foundation found that “only 35% of physicians describe themselves as independent practice owners, down from 49% in 2012 and 62% in 2008.” In contrast, 53 percent of the survey respondents described themselves as hospital or medical group employees, increasing from 38 percent in 2008 and 44 percent in 2012.

Many of the physicians remaining in small practices have already been heroically laboring to comply with ACA and other federal requirements, spending evenings and weekends transmitting patient data through expensive electronic health record systems. 

The newest iteration of health reform,
MACRA (the Medicare Access and CHIP Reauthorization Act),
will break their backs.

MACRA (previously covered here) restructures physician pay by rewarding more patient data-gathering and obedience to government-dictated clinical and electronic activities.

The Centers for Medicare & Medicaid Services, the agency fleshing out the MACRA regulations, admits that its new rules will penalize 87 percent of solo practitioners  and 69.9 percent of practices with 2 to 9 doctors. Over time, many small practices will lose up to nine percent of their Medicare reimbursements. Meanwhile, only 18.7 percent of clinicians in groups of 100 or more will be penalized.

Tom LaGrelius, MD, president of the American College of Private Physicians, explains that “small organizations cannot possibly comply” with MACRA’s complex data-reporting requirements and will be unable to absorb the MACRA penalties. “Such practices are already running on very narrow margins with 70 percent-plus overheads.” 

The Physician’s Foundation reported that even pre-MACRA Medicare reimbursement has risen only 3.6 percent since 2001, while overhead expenses “have increased well over 20 percent.”

Orthopedic surgeon Tony Francis believes “compliance will be difficult or impossible” for small groups.

“Just reading a 962-page proposed rule would be daunting enough.
Comprehending the meaning of it is something else.
That would take a full team of lawyers and CPAs.
What small practice has that kind of resources?”

Why force independent physicians into hospital jobs? Physician and health policy expert Scott Gottlieb explains:

“It will be easier for Medicare to gain
more direct leverage over their clinical decisions.”

And you know what that means.

RATIONING

The inevitable results of the proposed MACRA regulations are these:

  • We can expect an increase in the “silent exodus” of physicians from clinical care, either through retirement or career change. Even health IT whiz John Halamka, MD, finds the MACRA proposals to be “so overwhelmingly complex that no mere human will be able to understand them… as a practicing clinician for 30 years, I can honestly say that it’s time to leave the profession if we stay on the current trajectory.
  • Some will no doubt surrender their positions as “the knuckle-draggers who just won’t get with the Managed Care 2.0 program,” and join corporate medicine, a move that didn’t turn out well in the 1990’s, and will certainly devalue the medical care Americans have enjoyed in the past. 
  • Others will decide to opt out of the Medicare program and treat Medicare patients through private contracts.
  • Wisely realizing that private insurance companies (the Aetnas and UnitedHealths of the world) will eventually make these very same data-collection demands, many physicians will terminate all insurance contracts, offering private individually-tailored care only through direct-pay or concierge arrangements.

If the MACRA regulations are finalized, not only will independent practices suffer, but so will Medicare beneficiaries. Small physician-owned practices are already known to result in fewer preventable hospital admissions than hospital-owned practices. As the Physicians Foundation points out, while mega-health systems “can handle government rules and regulations,” they simply cannot provide “the personalized care found in the offices of private practices.”

Patients, physicians, and other stakeholders can voice their opinions about the destruction of our physicians’ small businesses at http://bit.ly/macracomment.

Your opportunity to comment will close on June 27, 2016.

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Obamacare’s Biggest Legacy? More Welfare Beneficiaries.


Once upon a time, in the darkest, most putrid bowels of the White House, the diabolical creators of the worst piece of health legislation in American history connived to completely uproot one-sixth of the economy by convincing the populace this was first, necessary, and second, a boon to the country.

The Obamacare architects knew that there weren’t that many Americans truly locked out of health insurance, and certainly not in the numbers that would justify such a massive overhaul. Yet they, with the help of the lapdog media, touted completely bogus numbers of 45 MILLION!, 47 MILLION!, and 50 MILLION! (depending on the source) to get your attention.

It worked, didn’t it? And we all felt bad to learn this, didn’t we? Half of the country was covered by company plans and we thought it was unconscionable that people hoping to purchase their own health insurance couldn’t afford to.

We were told in 2010, by Jonathan Gruber’s CBO, that the Obamacare insurance exchanges would cover 22 million more Americans by this year (which is, you’ll note, less than half of the purported 50 million uninsured. Some “universal coverage” plan!).

We were also told that insuring these long-suffering individuals would actually save us money!

“$2500 per family per year!”

Employers “would see premiums fall by as much as three-thousand percent, which means they could give you a raise!

Eureka, Big Daddy Government will deliver us from ever-increasing health care costs!!! We’re on board!

Now, of course, we realize that the middle-class is taking this law directly on the chin. Workers with health insurance benefits are seeing their out-of-pocket costs skyrocket — while many in the individual market have decided to take their chances as they abandon expensive Obamacare policies with unreachable deductibles. 

Meanwhile, as the Congressional Budget Office churns its new Obamacare numbers, we find that the 2009-2010 CBO — Jonathan Gruber’s CBO — was remarkably off-base in its projections. In short, this year’s CBO report shows that the enrollment numbers are roughly half the 21-22 million 2016 exchange customers CBO had consistently forecast in years past, even as recently as March 2015. 

 

Get this: For all the sacrifice
the American people are making,
only 10 million people
are expected to be enrolled
in the exchanges by year’s end.

 

So what happened? 

Well, what happened was that an unexpectedly large number of Americans were folded into Medicaid, the worst coverage in the entire country, instead of signing up for Obamacare plans.

As the Weekly Standard’s Jeffrey Anderson points out, “In 2013, the CBO projected that, in the absence of Obamacare … 34 million people would have been on Medicaid or CHIP” in 2016.

What are the Medicaid/CHIP numbers now? 

Sixty-eight million. 

That’s right. Sixty-eight million American human beings are now on (lousy) Medicaid. Let that sink in.

Even better news for Progressives: CBO also believes that slower wage growth in the future will qualify even more Americans for the welfare programs.

What’s ironic for Obamacare proponents is that increased Medicaid enrollment also poses an existential threat to the exchanges. Take it from CBO itself, which projects that “as more people become eligible for Medicaid coverage, enrollment in coverage through the marketplaces will decline.”

Dentons, a global legal firm, maintains that this is already happening:

“Medicaid and the Children’s Health Insurance Program (CHIP) cover 17 million more people in 2016 than projected, while private insurance through the non-group market, including exchanges … covers 10 million fewer people. Millions of young, healthy people are enrolled in Medicaid and CHIP, rather than in private insurance offered through the exchanges.”

Before a 2012 Supreme Court ruling made Medicaid expansion optional for the states, CBO assumed all Americans with incomes at or below 138 percent of the federal poverty level (FPL) would receive Medicaid. Nineteen states are currently opting not to expand, so a smaller pool of Americans are Medicaid-eligible.

Still, as Dentons notes, “in the past six years Medicaid and CHIP enrollment has nearly doubled from the 2010 baseline.

We’ve repeatedly been told that state legislatures opting not to expand their Medicaid programs are “greedy, selfish and uncaring.” Yet it is in Medicaid expansion states that Obamacare enrollment and risk pools suffer the most.

In non-expansion states, low-income, young, able-bodied Americans can purchase highly-subsidized exchange policies and help to balance out the costs of older, sicker enrollees. In expansion states, those same young, able-bodied Americans at or below 138 percent FPL are FORCED into Medicaid — as in:

“Sorry, you can’t have a real insurance policy.
You’re too poor.”

In the nation as a whole, insurers need about 40 percent of Obamacare enrollees to be 18- to 34-year-olds. Meanwhile, over at healthcare.gov, only “26 percent of the individuals who selected, or were automatically reenrolled in, a 2016 Marketplace plan are ages 18 to 34.” 

Where’d they go?
Medicaid, anyone??

The Wall Street Journal reports the reason the young and healthy are needed in the exchanges: to “hold down premium rates by balancing out the greater medical spending of older enrollees.” Insurers are already dismayed over the greater-than-expected costs of their current Obamacare populations and are threatening to raise 2017 premiums by double digits. As a result, reports of adverse risk selection and death spirals are proliferating.

It wasn’t enough that Progressives like Harry Reid, Chuck Schumer, and Nancy Pelosi put the exchanges at risk by insisting on a Cadillac Tax delay — which thus postpones the incentive for employers to dump workers in the Obamacare “exchanges, whether they like it or not.

Now we see that their failed Medicaid policies have doubled down on the damage.

The Obamacare exchanges are doomed,
and Progressives have only themselves to blame.

Obamacare’s “Wage Growth” Hoax

Families across the country are facing escalating out-of-pocket health care costs and, as a result, less disposable income, thanks to Obamacare’s Cadillac Tax. A major funding mechanism for the law, the 40 percent excise tax forces employers to cut back on health benefits, leaving workers increasingly subject to higher deductibles and copayments.

(Note: See here, here, and here for more details on the Cadillac Tax.)

The drive-by media originally maintained the Cadillac Tax was merely a justified penalty on unusually expensive gold-plated plans — such as those owned by Goldman-Sachs executives — that theoretically encourage over-utilization of medical care. 

However, we now know that the tax was designed to eventually target every employer-sponsored insurance (ESI) plan. We’re talking about 158 million Americans.

Since employers have already begun reducing the generosity of their plans to prepare for the tax’s 2018 implementation, even the drive-by media has had to pay attention to a flurry of reports — from sources like Forbes, The Los Angeles Times, Bloomberg, the Institute for Policy Innovation, The Wall Street Journal, and more — on soaring employee cost-sharing.

Completely blindsided by these revelations, Progressives are now referring to copayment and deductible victims as “underinsured” and calling for action, including government requirements that insurers lower deductibles. Some are even demanding a repeal of the Cadillac Tax.

This situation shouldn’t have been a surprise to anyone. This is, as they say, a feature, not a bug, of the law; the Cadillac Tax was always intended to discourage patients from consuming health care. This is Obamacare’s promised “cost control.”

Law professor (and big-time Cadillac Tax fan) Edward Zelinsky explains:

 “Those who drafted the Cadillac Tax presumed that this tax…would be passed on to the employer and that the employer, in turn, would transfer this additional cost to its employees. In this indirect fashion, the Cadillac Tax should sensitize employees to the high costs of their health care coverage.”

Steve Wojcik of the National Business Group on Health described the policy’s intention:

“If employees have more cost sharing…then they’re more mindful when they access health care to choose a more efficient provider or say, ‘You know, I don’t need to go to the doctor every time I have a cough.’” 

America, you were conned from the very start. Not only did politicians lie — including Obama, dozens of times — in maintaining we could keep our plans, period, but so did Progressive reporters, who insisted that job-based coverage would be untouched.

Young Jonathan Cohn explained that for most of those with employer-sponsored insurance, Medicare, or Medicaid, 

“Very little about their health plans are changing because of the law,
at least outwardly.”
 

America’s alleged wunderkind and intellectual giant Ezra Klein told us

“For most companies, the Affordable Care Act won’t bring much change at all.” 

And Ryan Lizza  assured readers that:

“About eighty percent of Americans are more or less left alone by the health-care act—largely people who have health insurance through their employers.” 

To prove that most people wouldn’t be affected by Obamacare, the liberals even paraded a pie chart, because apparently, in their view, “stupid” Americans understand colorful pictures more clearly than words. 

Even now, in the midst of this massive shift to higher employee cost-sharing, at least one of the law’s engineers is still perpetrating the fable that Obamacare isn’t affecting company plans.

Why did Obamacare’s designers aim to abuse American workers this way? Why was it necessary that Americans lose their policies to make Obamacare work?

To rake in more federal money, of course. The tax was devised to undercut the IRS provision that allows workers to receive tax-free company benefits. Policy experts estimate the government is robbed of $250 billion per year through this arrangement. 

And Progressive lawmakers rationalized that as employers scaled back or eliminated tax-free plans, they’d offset the loss with pay raises — in other words, taxable wages.

Here’s then-Senate Finance Committee chair Max Baucus explaining your raise.

Progressive politicians — backed by the Congressional Budget Office (CBO) — predicted that the excise tax itself would raise relatively little, since companies would have no choice but to bring plan costs below the tax’s threshold. Obamacare crafter Jonathan Gruber is quoted to say, “I would be surprised if [the IRS] even collect[s].’” 

Most of the $201.4 billion revenue over 2013-2019 was predicted to result from payroll and income taxation of, yes, your raises.

Are you following? America’s gonna get a raise, any day now.  There’s even an econo-wonk term for this phenomenon — the “Wage Growth” effect.

So what about this “Wage Growth?” And who was the genius predicting with absolute certainty how companies would react to any savings on benefit costs?

Let’s flip the calendar back to 1993-94, when Hillary Clinton and Friends were busily at work trying to accomplish a very similar government takeover of America’s health care sector. 

“Wage Growth” was a major assumption in the Clinton bill: employers were expected to “shift to wages” any savings or costs they experienced due to the employer mandate to offer insurance. Those offering ESI for the first time were predicted to offset costs by reducing wages; companies that had previously offered ESI would receive government subsidies and were expected to pass along those savings to employees. 

The proponent of the Wage Growth hypothesis was 28-year-old Jonathan Gruber — yes, that Jonathan Gruber — who explained it to a health reform group in December 1993, and in testimony before a House committee five days later. When testifying before a Senate committee in July 1994, he again maintained the legitimacy of his unproven assumption.

Gruber was successful in persuading the 1994 CBO to accept the same premise: “employers facing an increase in their premiums would probably shift most of the added cost to their workers by reducing cash wages” and “employees of firms that would pay less would receive higher wages.” CBO’s evidence? Two research papers (one of which was still “forthcoming”) written by Jonathan Gruber.

Fifteen years later, in the midst of the Obamacare battle, Gruber was again peddling Wage Growth, offering professional papers and articles attempting to prove that Wage Growth would materialize with Obama’s reform package as well. Gruber, then more heavily involved with the CBO, influenced the body to repeatedly make the same Wage Growth assumption with Obamacare. (That’s for a subsequent post.)

For now, remember that it was critical that CBO find that Obamacare would pay for itself, as Obama promised and demanded a reform package that didn’t increase the deficit by a dime. Also remember that CBO analysis killed HillaryCare when it found the proposal increased the deficit by $74 billion

Obama and his Progressive Senate buddies couldn’t endure such an outcome. And government control of one-sixth of the economy couldn’t wait. 

So Jonathan Gruber rode in to save Obama by convincing just about everyone who mattered that the plan was deficit-friendly. Gruber then effectively went “on tour” to sell his claim to the American people, citing the support of the “independent CBO” — that’s right, the CBO that relied upon his Wage Growth hypothesis. 

Why is this important now, six years later? Because a wage increase has not occurred, despite ever-increasing benefit cuts, and was known to be improbable before Obamacare was passed. In a December 2009 Mercer employer survey, only 16 percent of respondents said they’d convert any cost savings into pay raises. In Towers Perrin’s September 2009 survey, a paltry nine percent said they’d increase wages.

It’s less than clear that even Jonathan Gruber believed in the Wage Growth hypothesis, since he appears to have solely relied on his analysis of wage and health insurance trends in the late-90s. And he doesn’t appear entirely convinced he hadn’t overlooked some confounding variables.

Gruber told The New York Times in January 2010, “‘There are many academic studies showing that when health costs rise, wages fall,’ he said. ‘In the mid- and late-1990s, when we got health costs under control, wages rose nicely.’ But he added that other factors could have also lifted wages during that period.” (More on that later, too.)

Additionally, liberal economist Lawrence Mishel, a critic of Gruber’s Wage Growth hypothesis, wrote on January 12, 2010, that ”Gruber clearly overreached with the argument about health care driving wage trends and has acknowledged that to me privately (yesterday).

Given this, one must wonder: would Obamacare have passed if not for the false narrative of deficit reduction? Even in Gruber’s 2011 comic book, he admits this about the law:

“There are risks.  But we have the benefit of
the independent projections of the CBO
…to suggest that this should work out.”
 

Now we’re discovering that those CBO projections were not very “independent” and instead were biased by Gruber’s assumptions.

Stay tuned. A subsequent post will explain how Jonathan Gruber manipulated economic research to advance his Wage Growth hoax.