The
first bloom on the latter nightshade looked lovely to
many people, including the doctors and the hospitals who
would get paid something for the first time for treating
the homeless and the poor, who were formerly written off
as bad debts and charity cases. Who realized, or
admitted, that making the supply of medical care
"free" would push the demand to infinity?
Hospitals were overwhelmed with demand, so Congress gave
them the Hill-Burton Act to expand their facilities –
infinitely.
But
how did the State get into medicine in the first place?
For the answer to that, we have to go back to the 19th
century licensure laws, which artificially limited the
supply of physicians, and then move forward to the
mercantilist collusion between the State, the unions,
and the rust-belt industries, which produced
tax-deductible employee heath insurance. After years of
opposition to "socialized medicine," Medicare
finally flew under the banner of health
"insurance."
Medicare
started out paying "fee for service," which is
the way we pay auto mechanics, with a significant
difference: if the charge is 100, Medicare approves 80,
then pays 64, leaving an unpaid balance of 36. People
took this State gift without question, unfortunately,
accepting the idea that the State may set the price
wherever it wishes, and then pay what it wishes. The
so-called "private" insurance companies who
were (are) the actual Medicare contractors paying the
bills adopted this policy themselves, immediately.
Even
with price-fixing and refusal to pay, Medicare faced
real bankruptcy inside two-decades, and the Reagan
administration got stuck with fixing it. Their best and
brightest dreamed up Diagnostic Related Groups, DRGs, as
the new standard for payment; the State would pay a
fixed amount per diagnosis, period, regardless of the
time or treatment required. This meant that a person who
normally required ten days in the hospital got three,
and went home sick. And DRGs did not end State
price-fixing, and refusal to pay; the new system only
made things more complex, and easier for the State to
refuse payment.
That
didn’t work either, for we still had an infinite
demand for limited resources, so what’s going to give?
Resources. Three hundred hospitals closed during the
first year after the Reagan Medicare Reform Act went
into effect, and the rest were cutting back staff, and
beds. Doctors who could, retired; doctors who couldn’t
retire formed groups to pool the expense and the risk of
the new regulations. Emergency rooms suddenly blossomed
under the new State payment schemes, and became a growth
industry as the clinic of first resort to the public.
Home-health also seemed promising during the late
eighties and early nineties for dealing with the sick
people discharged from hospitals, but expenses again
grew too fast, and State payments were again restricted.
Ten
more years of bureaucratic fiddling with Medicare
accomplished zero savings and another huge cost
inflation, and finally Congress woke up to their
personal peril: what if they got caught with this
stinking mess on their hands? So they immediately
created a scapegoat, the now venerable fraud called the
HMO, baited with short-term incentives to attract the
finest skilled con-artists in the country, who had
lately vanished from the S&L industry, to run them.
So they came and went, leaving the public to hold the
empty bag, as usual, while Congress muddied the waters
further by creating PPOs, POSs, PSOs, and MSAs, as a
potpourri of scapegoats for our senior population to
ponder.
In
parallel with State financing in medicine goes State
policing of medicine, naturally. Everybody and
everything must be licensed, inspected, and approved,
repeatedly, by official agents; you can’t leave these
critical matters to the people who do the job, and who
must work with each other to get the job done. By
federal mandate, for example, a twenty-five–bed
hospital that I worked in had to have twenty-nine
managers to make certain that everybody was following
the rules. This is expensive nonsense.
Doctors
either have to contract with a professional billing
service, or employ their own regiment of bureaucrats to
keep track of the constantly shifting criteria, and code
numbers, demanded by the State for payment. And then
there is malpractice insurance.
Some
doctors leave home without it, while most have too much
to lose to depend on a disclosure contract with the
patient. Malpractice insurance is mighty attractive to
unscrupulous doctors and lawyers too, who can extort
money from insurance carriers and honest doctors with
relative ease once they get their hands on a willing
patient and the medical records. The latest wrinkle in
that scam that I know about is the murder charge,
instead of the wrongful-death suit. The vermin come out
of the woodwork for this kind of cake.
Can
our system of health-care delivery be saved? Yes. If the
State would absolutely, unconditionally, 100% get out of
medicine, and stay out, then the business might be saved
by the people who work in it. Otherwise, no. An infinite
demand for limited resources cannot be satisfied in this
universe. Socialism doesn’t work.
August
4, 2003
Robert
Klassen [send him
mail] is a retired med tech and writer. Here's
his web site.
Copyright
© 2003 Robert Klassen
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