Government health care runs up against costs too -- and political solutions can be nasty

October 9, 12:03 PMCivil Liberties ExaminerJ.D. Tuccille

Previous Next

2 comments Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the Civil Liberties Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

Health care systems face problems of cost. Political
solutions can be nastier than market solutions.
(Photo: Creative Commons)

Last week, my wife, a pediatrician, gave a patient a prescription for compounded Tamiflu -- that is, the preparation of a children's dose of the anti-viral drug by breaking down adult-dose capsules and turning them into a liquid suspension. The Swine flu scare has made children's Tamiflu scarce, so compounding is often the only way of getting the drug for kids. Before handing the patient the prescription, my wife's office checked with the insurer to make sure it would pay for compounded Tamiflu. Reassured that the drug was covered, the patient went to get the drug compounded at a local pharmacy.

Of course, when the pharmacy went to put the prescription through, the insurer refused to pay. Twice.

Oh, no, not another health insurance company horror story! Well, yes it is -- but with a twist. You see, the insurer was AHCCCS -- Arizona's implementation of Medicaid -- a government program that may provide us all with a peek at the future of American medicine.

The problem was cleared up quickly enough once my wife heard about it. She set her staff to work calling the AHCCCS offices and demanding approval of the prescription. The government employees were all apologies and soon authorized compensation for the patient, who had already paid out of pocket.

But that's the way it always is. My wife and her staff play a frequent game of "guess what AHCCCS will pay for today" that has turned them into constant phone pals with bureaucrats down in Phoenix. The AHCCCS people are almost always polite and usually concede the point.

But this happens over and over again.

Tamiflu wasn't approved for use at all just a few weeks ago, even after the CDC recommended the drug for treating Swine flu. Sure enough, my wife (and other doctors, I'm sure) got on the horn and AHCCCS added Tamiflu to the formulary -- the list of drugs for which it would pay.

Yes, she does this from time to time with the private insurers too -- they're no saints, and occasional arm-twisting is required. But not with such regularity as with AHCCCS, and not to the extent that you start to believe that a system is at work -- though institutional bureaucratic incompetence is a possibility too.

If there is a system, it's not a system for refusing care and treatment. It's a system for making it a little more difficult to get things paid for -- unless somebody with savvy runs interference. But most physicians' offices don't provide this kind of value-added advocacy service. It'sexpensive to have staffers on the phone arguing with Medicaid bureaucrats, none of whom can be fingered as a specific villain in any given case. And without savvy advocates, medications and treatments don't get approved. Not incidentally, I'm sure, such how-did-that-happen refusals to pay for even pre-approved care, spread out across the entire system, must represent a fairly substantial cost saving.

This shouldn't come as a surprise. Medicaid is, after all, a political health-care system, rather than a free market one. It doesn't just charge for services and raise rates as needed; it's given a certain budget to work with, and somehow it has to jam all the demands upon its resources within the limits of that budget. That's not easy.

In countries where politically run health-care systems are the norm, the cost-control measures are more overt. The Los Angeles Times recently published an article about the budget strains to which the government-run health-care system is subject in British Columbia, and the accommodations it has made in response. 

Provincial officials recently announced a $360-million shortfall in the $15.7-billion healthcare budget for the fiscal year that ends in March.

The shortage will mean fewer surgeries and longer waits.

The Vancouver Island Health Authority has said it would reduce the number of nonemergency MRIs by 20%; nonemergency patients now are being booked for scans in March.

Vancouver Coastal Health, which serves a quarter of the province's population, said it would eliminate 450 elective surgeries, about 30% of the schedule, during the four weeks of the 2010 Winter Olympics.

And in the rapidly growing suburbs east of Vancouver, the Fraser Health Authority plans to close its spending gap by, among other things, holding the number of MRIs to last year's total, ending $550,000 in service programs for senior citizens and reducing elective surgeries by about 14%.

How do you control costs in a politically run health-care system? You announce "this much care and no more." Ironically, that leaves one woman described in the article crossing the border and paying out-of-pocket for hip surgery in the U.S. to escape a year-and-a-half long waiting list, and has spurred the establishment of technically illegal private surgery centers in the province at a time when many Americans are touting the advantages of government-run systems like the one in Canada.

And like Arizona's AHCCCS.

Well, maybe Medicaid isn't  the best comparison. After all, it serves the poor (and trust-funders who can hide their wealth -- but that's another story), who are often not so effective as advocates for themselves. But "Medicare for everybody" has become a rallying cry in certain circles, with fans calling for conversion of the medical system that now serves most older Americans into a single -payer, state-run health care system for all Americans. "Medicare doesn't waste money on marketing, profits, stacks of unnecessary paperwork for doctors and hospitals," says Leonard Boasberg of the Philadelphia Inquirer.

It also doesn't waste money on paying for what it gets. The highly respected Mayo Clinic, much touted by President Barack Obama because it "provides care much more cheaply than a lot of other health systems, even though it's better care," is now experimenting with refusing to participate in Medicare. A spokesman says, "Medicare now only covers about half our costs."

The Mayo Clinic isn't alone -- low reimbursement rates and ponderous bureaucracy have been driving doctors away from Medicare for years.

Only a politically run health care operation could try to make providers to sell it services at a loss, because it can force its customers to keep paying premiums even as the ranks of providers dwindle. A private provider would see its customers flee to alternative plans. Political systems face financial crunches and finite resources just like private systems, but they have less incentive to please customers (because they're funded by coerced taxes) than to use the power of the state to decree "solutions" that aren't often solutions at all.

Americans aren't yet ready to face the hard choices that are made by politically run health care systems. That's why we get one unexplained denial after another -- or "villainous" physicians refusing to accept underpayments -- instead of hard limits on care as a matter of policy. But, when Americans wise up to the fact that state-run medicine has a hard-nosed attitude toward cost control, they're likely to discover that doctors like my wife can't always fix the problem.

email J.D.: civilliberties (at) tuccille.com