How can President Obama and leading Democrats continue to insist
that government-run health care will not lead to rationing and
exploding health care costs? The explanation to this delusional
thinking rests in their belief that each year the American health
care system spends $700 billion a year that does not improve
outcomes.
It is this article of faith, based on nothing but a back of an
envelope calculation by Obama budget director Peter Orszag, that
allows leading health care lights such as Senator Ted Kennedy to
claim in his recent Newsweek essay that a
government run health plan is last best hope “to ensure that
someday, when there is a cure for the disease I now have, no
American who needs it will be denied it.”
Every health care proposal — including the one with his name on
it — forces up to 100 million Americans to give up the health
care plan they have and enter a government run plan, whether it
be Medicaid or the new plan in which doctors would be forced into
accepting fees that are 30 percent lower.
Will such a system deliver the promise of a cure when you need
it? Of course! Kennedy truly believes that only government can
“move from a system that rewards doctors for the sheer volume of
tests and treatments they prescribe to one that rewards quality
and positive outcomes.”
His example? “In Medicare today, 18 percent of patients
discharged from a hospital are readmitted within 30 days — at a
cost of more than $15 billion in 2005. Most of these readmissions
are unnecessary, but we don’t reward hospitals and doctors for
preventing them. By changing that, we’ll save billions of dollars
while improving the quality of care for patients.”
Senator Kennedy seems sure it’s easy to reduce useless admissions
and truly believes that wherever people are seen or enrolled they
will get the right kind of care. That’s because Kennedy believe
Orszag’s assertion that “$700 billion a year in health care costs
do not improve health outcomes. It occurs because we pay for more
care rather than better care.”
Orszag relies on the Dartmouth Atlas — a map of Medicare
hospital spending in the last two years of life that divides
America into five regions ranging from the highest cost per
person to the lowest. The Atlas purports to show that Medicare
patients in the highest cost areas are no better off than those
in lowest cost areas. So if patients in Salt Lake City with
cancer cost less than patients in New York City and both die in
two years, that means the care in Manhattan was a waste of money.
See? From there you assume that more care anywhere wastes money.
That’s how Orszag came up with $700 billion. The Theory of
Relativity it isn’t.
The jump from hospital spending on Medicare patients to all
health care spending is one leap of faith. The other is assuming
patients haven’t changed over the 20 years Dartmouth has been
collecting data. In fact they have. Fewer people are entering
hospitals. People with chronic illnesses are less likely to enter
the hospital. Their procedures, if they have them, are done on an
outpatient basis. Hence, the smaller percentage of people going
into the hospital are increasingly much older, entering for
riskier procedures, and sicker than the population as a whole.
Yet, this group is Orszag’s benchmark for eliminating care and
costs across the entire system.
Those that are “sicker” include people like Ted Kennedy who are
living longer with brain cancer and other serious illnesses. For
instance, according National Cancer Institute estimates, someone
Kennedy’s age with a brain cancer has less than a 5 percent
chance of living five years let alone one. But over a year ago he
went through difficult surgery to remove his tumor and received
Temodar and Avastin to shrink the remainder of the tumor not
surgically removed. He may be a candidate for a new vaccine to
beat back his cancer for good.
Yet, Medicare pays for none of those treatments. Soon it will not
pay for readmissions related to the kind of surgery Kennedy
received. Jack Wennberg, creator of the Dartmouth Atlas that
Peter Orszag worships, calls readmissions for cancer patients
such as the Senator “‘rescue medicine’ to people who are in
advanced stages of diseases that can’t be cured… the costs of
such care are very high, both in dollars spent and in providing
care that the majority of chronically-ill patients might not
want, such as admissions to intensive care and being sent to
specialist after specialist.”
According to the “reward” system Kennedy proposes and Orszag
would implement, neither Medicare nor a government run health
system would pay for such care or future advances against cancer,
Alzheimer’s, and other illnesses. Kennedy’s legislation would rob
Americans first of choice, then of progress, and ultimately of
victory against diseases like cancer, Alzheimer’s, and stroke.
Health care reform should accelerate innovation and promote
choice. Instead, both will be strangled in a failed effort to
control costs. In blessing this sordid exercise, Ted Kennedy will
be remembered for breaking his promise to the American people.
