April 4, 2010
States Need to Protect Us from ObamaCareBy John Donaldson, MD
If individual citizens are to survive ObamaCare with access and quality, then their state legislatures need to act. Our salvation is less likely to come from the constitutional challenges filed last week by fourteen Attorneys General than from states assuming leadership in the establishment of a parallel system of health care that excludes the federal government from participation.
With the passage and signing of the massive new entitlement last week, a myriad of new regulations were imposed on the states and on individual providers. The Democrats intend to inflict these regulations using the much-abused Commerce Clause and enforce the new rules with the financial lever of federal funding of the Medicare and Medicaid programs.
Thirty-two million new patients will be dumped onto the states and their local providers, professionals, and institutions. About half of these patients will have a negative impact on the budgets of each state through the cost-shared Medicaid program. All of them will negatively impact providers with decreases in reimbursement, the addition of newly-entitled citizens (and likely non-citizens), the disappearance of commercial employer-based insurance, and a blizzard of costly new regulations and mandates from CMS.
State governments need to emulate the Hillsdale College model and design an alternative system free from federal dollars and the bureaucratic baggage that accompanies them. (Hillsdale College accepts no funds from the federal government.)
Currently, the federal government exercises control of much of health care delivery through the funding of the two government programs. Hospitals and providers must accede to standards established by CMS to receive funding. They must conform to EMTALA requirements. In many states, such as Florida, the state runs a duplicate administration to enforce state standards that may be nearly identical to those of CMS.
States license facilities and providers. As the only available federal lever is the threat to withdraw Medicare and Medicaid funding, providers might consider withdrawal from aspects of federal funding of their own accord, provided they are secure holding in their license by receiving state support. The state must keep control of all licensing.
It should be painfully obvious that the current reforms are not intended to provide additional access; "ObamaCare quality" will become an oxymoron. The financial demise of hospitals and insurance companies is likely take less than three years, making them eligible for "bailouts." Surely we have learned by now that any move to control a system, while termed "bailout," is in actuality a "takeover."
This mechanism was used in the General Motors and Chrysler bailouts: The federal government and the unions now control those corporations. In health care, insurance companies, like the automobile bondholders, will be dumped, and the hospitals will by necessity be globally budgeted by government.
None of this is accidental. Merely look at the regulations to be imposed on "doctor-owned hospitals." The legislation will make Medicare certification virtually impossible for these facilities. Clearly, the intention is to control the total amount of health care available for all citizens by restricting access to various services.
The picture is complete when one then begins to examine changes in reimbursement to institutional and individual providers. Radical decreases in payment to cardiologists for cardiac diagnostic services, invasive and non-invasive, are designed to dry up these lifesaving tests without regard to standards of care or patient need. Cost trumps quality to bureaucrats, and we are promised that half a trillion dollars is to be taken from Medicare/Medicaid.
Each state needs to critically evaluate the negative effects ObamaCare will impose in the next two to three years. A little vision will lead state politicians to prioritize the needs of its citizens and conclude that the best way to assist its providers in delivering needed care is by imitating Hillsdale College.
If one looks critically at Medicare reimbursement to hospitals, the addition of more beneficiaries and deceased funding will drive all to bankruptcy. They will have to be funded by government, and any local control becomes merely an exercise to decide what care can be delivered for a fixed dollar amount granted annually by government.
This is the two-tiered model we see in most socialized countries. When the dollar amount is restricted, then quality and/or access are necessarily sacrificed. Politicians at higher levels then blame the local politicians or hospital administrators for failure to meet the needs of the population.
Hospitals very quickly will learn that productivity under global budgeting penalizes their financial health. Filling beds with acute patients by leaving them longer displaces patients needing elective procedures. Acutely ill patients will be found in corridors and elective patients only on ever-lengthening waiting lists.
States must now put aside the old thinking, for that system will fail under ObamaCare. They must begin to examine how they are going to help their providers, both institutional and professional, survive a bad business plan and still deliver needed care.
The states must realign their thinking to break the "Commerce Clause" intrusion by partnering with their providers. These partnerships would establish a parallel system of access outside of the current system. Like Hillsdale College, that system would accept no federal funds and would not participate in any of the federally based programs.
The first action is to remove any Certificate of Need (CON) for facilities that will guarantee not to accept any federal funding. These facilities would not have any requirement to provide an emergency room, allowing patients to have an alternative to Obamacare waiting lists to obtain timely and cost-effective relief for elective care.
To control costs and quality, each state would pass legislation that enshrines non-traditional delivery of care by granting state antitrust exemptions to providers. These exemptions have been shown to confer protection from the federal government intrusion. These non-traditional partnerships of state, hospitals, and physicians could deliver quality care protected from federal interference and mandated cost-shifts.
These partnerships would enjoy significant cost advantage over the "government" care. There would be no "sick tax" to cover government underfunding and no emergency room to absorb a large volume of non-payers. Restrictions would be placed on the type of care delivered to avoid end-of-life care and non-emergency intensive care.
Further enhancement in cost can be obtained by restricting access only to those patients who agree to arbitration rather than litigation. If the state is a partner, then sovereign immunity could be placed. Quality-based panels of physicians, maintenance of logical standards, and evidence-based medicine would deliver the highest standard of care at the lowest price.
These programs will allow insurance companies to reenter the market for those citizens willing to be "doubly taxed" for health care when needed. It will be cheap and un-discounted, paying cost-plus to the partnership. Each patient becomes an "equal-opportunity payer." Insurance can return to spreading out risk rather than managing care.
Finally, the availability of these partnerships will allow communities to keep their best doctors and to maintain a quality alternative in the face of ever-decreasing access under ObamaCare. States that establish this type of model can expect to attract the best, as good doctors will cohort.
Those that don't begin to plan now will be left only ObamaCare, waiting lists, and civil servant "who cares" medicine.