August 3, 2009

Wherein We Find That Britain's Government "Option" Is a Pain in the Back

Hatched by Dafydd

A crystal ball for America. Here is our future under ObamaCare:

Tens of thousands with chronic back pain will be forced to live in agony after a decision to slash the number of painkilling injections issued on the NHS, doctors have warned.

The Government's drug rationing watchdog says "therapeutic" injections of steroids, such as cortisone, which are used to reduce inflammation, should no longer be offered to patients suffering from persistent lower back pain when the cause is not known.

Instead the National Institute of Health and Clinical Excellence (NICE) is ordering doctors to offer patients remedies like acupuncture and osteopathy.

Acupuncture? Say, if that doesn't work, there's always cupping and bleeding. At least they're cutting pain treatment in a NICE way.

But wait a minute. What percent cut are we talking about? Surely this is just a small statistical adjustment, right?

The NHS currently issues more than 60,000 treatments of steroid injections every year. NICE said in its guidance it wants to cut this to just 3,000 treatments a year, a move which would save the NHS £33 million.

See? It's not a wholesale slashing of patient care; it's only a minor pruning... of 95% of all cortisone pain treatment. In any event, there is an obvious up-side to this: The National Health Service of the UK will save £33 million -- $56 million, a whopping $980 per patient cut from the program.

Here is the problem: When a government gets into financial trouble, there are only three things it can do:

  1. Run an increasingly large deficit;
  2. Raise taxes;
  3. Cut spending.

Number 1 is problematical, because large deficits produce inflation, which produces successful electoral challenges from the other party.

Number 2 doesn't work because of the Laffer curve, which demonstrates that a point exists beyond which increasing tax rates doesn't increase revenue, it reduces revenue. Few countries can resist increasing taxation right up to that point... and bitter experience teaches them that they cannot then increase government revenue by jacking up the tax rates again.

That leaves only number 3, cutting spending. But that itself carries several dangers to the sitting administration. There are only three ways to cut spending:

  1. The administration can cut porkbarrel spending;
  2. It can cut highly visible programs that have powerful champions in Congress;
  3. It can cut the costs of ongoing programs, over which it already has complete control of day to day spending, by a series of nearly invisible changes, none of which individually has strong support in Congress.

Number 1 is problematical, because pork is the primary way that members of Congress buy votes back home, so they jealously guard such spending from Executive monkeying.

Number 2 doesn't work, because powerful members of Congress can hold up all legislation until their own pet programs are restored and even increased.

That leaves only number 3, cutting that spending which is fixed by formula, by quietly manipulating some critical variable in that formula, which results in automatic "savings" -- for which no individual can later be blamed at the polls.

After all, it's not like Uncle Scrooge is simply slashing treatment in order to minimize costs; perish any such thought. The administration is not simply making up policy; the change comes direct from a panel of medical experts -- remote, anonymous, and unaccountable:

The NICE guidelines admit that evidence was limited for many back pain treatments, including those it recommended. Where scientific proof was lacking, advice was instead taken from its expert group. But specialists are furious that while the group included practitioners of alternative therapies, there was no one with expertise in conventional pain relief medicine to argue against a decision to significantly restrict its use.

Put everything together, and what do we get? That one of the easiest, least visible, and cheapest (in units of electoral retribution) way to appear to restore fiscal responsibility is for the president to order changes in a few small variables in spending formulas:

  • Reduce the percent of health-care charges for which the government plan will reimburse doctors and hospitals;
  • Reduce the allowable charges by doctors and hospitals for each procedure;
  • Ban or dramatically reduce certain more expensive procedures -- by declaring them "ineffective," for example;
  • Filter the patient pool by restricting treatment for those less likely to live much longer anyway, thus denying care to older or sicker patients;
  • Lowering the lifetime cap on medical benefits;
  • Funneling patients into particular favored health-care providers, who charge less and make it up in volume;
  • Reduce the amount of time doctors are allowed to spend with each patient (volume, volume, volume!);
  • Reduce the number of days patients are allowed to stay in hospital;
  • Require patients' families to provide some of the care, such as hygiene (bathing, bedpans) and physical therapy;
  • Reduce costs by skimping on ancillary expenses, such as nutrition, heating, and lighting;
  • Shunt more patients into relatively inexpensive hospice care by changing the standards for which conditions get hospital or doctor care and which do not.

Of course, many private or group insurance plans attempt these same cost-cutting measures; but they must deal with actual competition from other plans, so they don't have carte blanche. The more miserly they make their benefits, the less they can charge for coverage, lest they lose their customers.

But such market responses don't affect a government health-care plan, because it doesn't have to worry about competition; it can reduce benefits yet continue to charge the same amount. Consumers cannot jump ship for private competitors for a number of reasons:

  • A national plan can force everyone to pay for it by law; every major country that begins with a government "option" ends with the option being mandatory... so any private plan people obtain must be in addition to, not instead of, the government plan.
  • Even before that happens, the national plan can use its sheer size to force health-care providers, drug companies, and so forth to sell to them at any price the government health-care plan offers, undercutting smaller private plans;
  • It can set administrative standards in a way designed to drive out private companies -- for example, by requiring that every private plan duplicate the federal plan, or by preventing private plans from charging less than the national plan;
  • The national plan can operate at a loss and subsidize itself with taxes (see Amtrack);
  • And It can use its auditing authority to threaten and abuse potential competitors and intimidate them out of the business.

We see this same dynamic in every, single country that has either full-blown national health care, as in many Canadian provinces that actually prohibit private care or private insurance -- or even a "government option" that operates alongside a private health-insurance system, as in Japan and even (to a lesser extent) Great Britain.

A government "option" quickly gobbles up nearly all patients, becoming a de facto or even literal national health service. Typically, fewer than 10% of patients can afford to pay for private health insurance on top of the mandatory premiums and taxes they must pay for the national health service; only the rich can do so.

This sets up a two-tier system: Those with a lot of money get much better health care, the very "scandal" that is used to sell nationalized health care in the first place.

But there is some hope: Even in Canada, some provinces (such as Quebec) are struggling to reform their national health services by introducing a radical, new idea: Competition by private insurance!

So even if the Democrats manage to foist ObamaCare on the entire country, after a couple, three generations, we might possibly regain our senses and try to push it back -- a bit.

The new NICE policy of pain "management" in the United Kingdom illustrates the old saying about national health care: The government health-care policy is... don't get sick! And whatever you do in Merrie Olde England -- or soon to be Merrie Olde Obamastan -- don't let anyone or anything become a pain in the back, unless you don't mind being needled by the pinheads in D.C.

Hatched by Dafydd on this day, August 3, 2009, at the time of 3:56 PM

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