Is the entire argument that Obama is basing his plans for health care on based on a false premise? Dr Scott Gottlieb, writing in The Wall Street Journal makes it pretty clear that Obama has it wrong here. Very, very wrong right out of the starting gate, so to speak.
One theme the president has focused on is doctors’ motives. During a prime-time press conference on July 22, the president referred to a doctor who muses that she makes “a lot more money if I take this kid’s tonsils out”-even if the child might not need surgery. Responding to a woman whose spry 100-year-old mother was given a needed pacemaker despite her age, the president said a few weeks earlier (at an ABC News town-hall event at the White House) that doctors should let patients know that sometimes “you’re better off not having the surgery, but taking the painkiller.”
Mr. Obama’s clinical scenarios represent an excessive-if not erroneous-take on how doctors are influenced by financial incentives. This jaundiced view on medical decision-making may explain why programs the White House is proposing to lower health-care costs rely on the direct regulation of medical decisions. If Mr. Obama is serious about lowering costs, he’ll need to reform the economic structures in medicine-especially programs like Medicare.
Medicare data shows that for the most part, major surgeries aren’t the source of waste in health care. These kinds of procedures are typically guided by clear clinical criteria and are closely scrutinized by doctors and patients alike. Rather it is in routine procedures and treatments that economic incentives factor heavily into doctors’ decisions.
The use of branded over cheaper generic drugs until recently fell into this category. Doctors would regularly prescribe the more expensive option. Today this is far less prevalent, since patients with private plans realized that they were being saddled with higher co-pays when they opted for the brand-name drugs over generic alternatives.
Gottlieb’s point is straightforward: there are no economic incentives for patients in the Medicare or Medicaid systems to save any money. They are completely economically insulated from any consequences of decisions they make. It is not the surgeons driving the costs up – it is the patients who have no incentive to help keep costs down.
They flaw is not as Obama describes it and the “solution”, ObamaCare, does nothing to address that real problem. Obama has demonstrated on several occasions now that he fundamentally misunderstands what incentives are actually in place. I think Gottlieb has this one nailed.
So ObamaCare, far from saving money would expand the existing bureaucratic nightmares of Medicare and Medicaid and actually end up causing costs to escalate rapidly.
