Single-payer Healthcare is the End Game of Reform

When the marketing of Obamacare began in 2009, I always believed that the end game was for a federal single-payer system. Since the present Affordable Care Act (ACA), was passed in 2010, there has been nothing to convince me otherwise. The only reason single-payer wasn’t passed two years ago was because it was hard enough to arm-twist and bribe even Democratic legislators to pass the present 2,000+ pages of legislation. The following is my prediction of how this will unfold.

Remember the president’s marketing lines? “This won’t cost a dime. It will be funded by savings in fraud and abuse.” Millions of dollars in fraud and abuse have been recouped, but the dollars saved do not even come close to paying for this program. Or how about this one, “If you like your health plan and your doctor you can keep it.”  True - assuming that your employer still offers you health insurance, as many will drop this worker benefit come 2014.

Doctors have always been the weakest link in the healthcare chain. Compared to pharmaceutical companies, AARP, attorneys, health insurance companies, and hospital chains, we are poorly organized and underfund lobbing efforts. So like the slowest gazelle in the pack, we are the easiest to pick off first. By the end of 2013, estimates are that over one-half of cardiologists will be owned and or financially affiliated with a hospital corporation. Office-based ancillaries such as imaging and cardiac cath labs have had reimbursements cut to below levels of provider cost, making it almost financially impossible for a cardiologist to remain independent. How did this happen? Let’s see.

The rap against cardiologists, and other specialists, has been that since they owned so much diagnostic and treatment equipment, that over-testing and procedures, largely due to self-referral, drive up the cost of healthcare. That is a legitimate hypothesis, but has never been proven. Medicare’s solution was to simply cut away at physician-owned outpatient facility payments while simultaneously increasing the reimbursements for the same procedures at the hospital; thus eliminating any conflict of interest when a doctor orders a test or procedure. In theory, this idea seems sound, but in actuality, it ends up costing Medicare more, not less. That is because any test, or procedure, done in the hospital costs many times more than if it was done in the physicians’ office.

For example, in my area of Florida, a physician-owned cardiac cath lab can do a procedure for under $2,000 and still make a profit. The exact same procedure in the hospital (even if it is done as an out-patient), can cost Medicare anywhere from $5 to $10,000. Plus the patient must pay a Medicare Part A deductible, which is more than Part B. None of this has dissuaded Medicare from cutting reimbursements to non-hospital owned outpatient cath labs, which will likely become extinct within the next two years.

Along with this big stick, is also a big carrot. Hospital-employed cardiologists are now paid on the basis of work relative value units (RVUs). So no longer do they have to worry about being under-, or non-reimbursed, for their work due to poor or a lack of health insurance. The hospital can more than make up for these bad debts by write-offs and over-charging Medicare and other private carriers. Thus, it has become a win-win for the hospital and the cardiologist. Who loses? We all do. There is now even less of a free market system of healthcare testing and procedure purchasing, and costs will inevitably rise.

I believe that federal government policy makers are not blind to this. When most cardiologists are employed by hospitals in the not-to-distant future, Medicare and other payers will start to cut payments to the hospitals as well, under the guise of reducing costs of the program. Inevitably, rationing will then increase, as it has in every industrialized country with national health insurance. Private insurance premiums will escalate, and the populace will become increasingly angry and demand changes. The politicians will throw up their hands and say, “Oh well, we tried to do this through the private sector, but it just hasn’t worked out as we had expected.” Voila: single payer.

I hope I am wrong. But as implementation of Obamacare rolls along, and Medicare directs better payments to hospitals than physicians, I doubt it. The only alternative is consumer-driven healthcare. But that is a subject for another day.