How Government-Run Health Care Worsened the Coronavirus Crisis

Leftist politicians have spent a great amount of time over the past two months attacking President Trump for his handling of the coronavirus crisis. But instead of reflexively criticizing the administration, those liberals might want to examine how the left’s dream of government-run health care has exacerbated the crisis within the United States.

One of the major causes of the dearth of testing over the past several months: Low payments from Medicare, which led to low payment rates from private insurance plans. It may come as a shock to people like Rep. Alexandria Ocasio-Cortez (D-NY), but guess what labs did when low payments meant they suffered a financial loss for every coronavirus patient tested? They performed fewer tests.

Low Reimbursements Equals Fewer Tests

A recent expose in USA Today highlighted how Medicare “lowballed payments” to labs for coronavirus tests, leading those labs to restrict the number of tests they performed. An executive at one lab, Aaron Domenico, told the paper that “I’m an American first, and if I could do it for cost, I’d be happy to do it for the people at cost.” But Medicare initially reimbursed laboratories only $51 for a coronavirus test, much less than Domenico’s costs of $67 per test.

Paying $51 for a diagnostic test sounds like a lot, but Medicare gives laboratories nearly twice that amount, or approximately $96, to test for the flu. And government bureaucrats setting unrealistically low prices meant that private insurers followed Medicare’s lead. Little wonder that the head of the National Independent Laboratory Association said “a number of labs are holding back” on performing additional tests “because they didn’t want to lose money.”

Thankfully, on April 14 Medicare raised its reimbursement for a coronavirus test from $51 to $100. Unsurprisingly, the number of tests performed daily has roughly doubled since that point. Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma said she “recognized that there may have been some issues with reimbursement” discouraging labs from performing coronavirus tests.

Bureaucrats Can’t Micromanage Health Care

Therein lies one of the major problems with government-run health care: The notion that federal bureaucrats can determine the correct price for every prescription drug, laboratory test, physician service, or hospital procedure across the country. Donald Berwick, a former CMS administrator who helped develop Sen. Elizabeth Warren’s single-payer proposal, once said, “I want to see that in the city of San Diego or Seattle there are exactly as many MRI units as needed when operating at full capacity. Not less and not more.”

Berwick’s comments suggest that the federal government can determine the “right” amount of MRI units in each city, and use policy levers to achieve that “correct” outcome. But the coronavirus testing fiasco demonstrates how federal bureaucrats often do a poor job of trying to micromanage health care from Washington. Paying doctors and laboratories too much will encourage over-consumption of care, while paying too little discourages providers from even offering the service.

Low Payments Lead to Job Losses, Too

The problems with coronavirus testing also preview the left’s efforts to expand government-run health care. For instance, Joe Biden’s campaign platform calls for a government-run health plan that “will reduce costs for patients by negotiating lower prices from hospitals and other health care providers.”

But all these proposals—whether they would abolish private insurance outright, as Warren and Sen. Bernie Sanders support, or offer a government-run “option,” as in Biden’s platform—would have the government “negotiate” prices by forcing doctors, nurses, and hospitals to accept less money. By lowering payment levels, those plans would lead to massive job losses—as many as 1.5 million jobs in hospitals alone under a transition to single-payer, according to one estimate in the prestigious Journal of the American Medical Association.

The pay cuts and furloughs affecting many front-line health workers—the health-care sector lost 1.4 million jobs during the month of April—provide a preview of the future. Instead of suffering temporary revenue declines due to the coronavirus pandemic, hospitals and medical practices would face permanent reductions in revenue from lower-paying government programs.

Worse yet, care will suffer when people cannot access the care they need at the paltry prices government programs will pay. While the left lays the coronavirus testing flaws at the feet of President Trump, they should look instead at the government-run programs they support as a major source of the problem. Voters being asked to endorse the movement towards socialism in November should take note as well.

This post was originally published at The Federalist.

Colorado Plan Shows the Coercion Behind the Public “Option”

Former Vice President Joe Biden’s political comeback prompted health care stocks to surge last month following the Super Tuesday primaries. The rally, which occurred before the coronavirus pandemic took hold in the United States, stemmed in large part from Wall Street’s belief that Biden represents less of a threat to the sector as a potential president than Vermont Sen. Bernie Sanders’ single-payer health-care system.

But anyone who considers Biden’s alternative to single payer, the so-called “public option,” innocuous should look to Colorado. Lawmakers in the Centennial State recently revealed their version of the concept, and it represents an “option” in name only. Indeed, the state’s plan contemplates a level of coercion that in some respects exceeds that of Sanders’ system of socialized medicine.

Big Government Forces Hospitals’ Participation

For starters, the legislative proposal dictates prices for hospitals, based on a percentage of Medicare rates. As one might expect, the bill’s supporters believe the rates proposed in the legislation represent fair reimbursement levels, while some hospital executives disagree.

But the bill would also take away hospitals’ negotiating leverage, by requiring all Colorado facilities to participate in the new insurance offering. Hospitals refusing to participate would face fines of up to $40,000 per day. And if the prospect of nearly $1.5 million in government-imposed sanctions does not force a recalcitrant facility into submission, the bill also permits Colorado’s insurance commissioner to “suspend, revoke, or impose conditions on the hospital’s license.”

Think about that for a moment: The government forces hospitals to offer patients a service—even if the government’s price for that service could lead them to incur financial losses—and threatens to take away their license to do business if they refuse. That level of heavy-handed government involvement far exceeds the individual mandate in Obamacare.

Insurers Required to Participate, Too

The bill similarly requires all Colorado insurers to offer the new government-dictated “option” in each county in which they offer Obamacare exchange products. In counties where only one insurer currently offers coverage, the bill directs the insurance commissioner to “require carriers to offer the Colorado option in specific counties,” such that at least two carriers offer the plan in every county.

According to one report, the bill’s sponsors called their new offering the “Colorado option” rather than the “public option” because lawmakers did “not want to put the state budget at risk by creating a government-run insurance company.” Instead, lawmakers want to dragoon insurers into assuming that risk, even as the bill prohibits efforts by insurers to absorb potential losses from the “Colorado option” by raising rates elsewhere.

Worse Than Berniecare?

Sanders’ legislation would effectively put private insurers out of business, by making coverage for services covered by the single-payer system “unlawful.” The issue of whether to ban private insurance, and take away individuals’ ability to keep their current coverage, became a defining characteristic of Democrats’ nominating contest.

But the Colorado legislation could put private insurers and hospitals out of business, if they refuse the state’s commands. At least Sanders’ proposal allows hospitals to opt out of the government system if they decide—few would, but they do have that choice.

The Colorado legislation shows how Obamacare set a dangerous precedent, which Democrats want to extend throughout the health-care system. Just as Obamacare forced all Americans to buy a product for the first time ever, now lawmakers want to force hospitals and insurers to treat patients, even at their financial peril. Each could face a Hobson’s choice: Putting themselves out of business by incurring losses on “Colorado option” patients, or taking the “option” to decline to participate, at which point the state will regulate them out of business.

Colorado’s proposal of dubious merit and equally dubious constitutionality demonstrates the way in which even purported moderates like Biden have embraced a health-care agenda defined by ever-increasing levels of government intrusion and coercion. At present, Sanders’ single-payer legislation represents the far end of that continuum, but liberals will use proposals like Colorado’s “public option” to get there.

This post was originally published at The Federalist.

How Single Payer Would Make Outbreaks Like Coronavirus Worse

The past several weeks have seen two trends with important implications for health policy: Vermont Sen. Bernie Sanders’s burst of momentum following strong political showings in both Iowa and New Hampshire has drawn greater attention to his proposal for single-payer health care, as China struggles to control a coronavirus outbreak that first emerged at the end of last year.

The two events are linked by more than just time. The coronavirus outbreak provides a compelling argument against Sanders’s so-called “Medicare for All” program, which would upend the health-care system’s ability to respond to infectious disease outbreaks.

In an Outbreak, Could You Obtain Care?

For starters, supporters of Sanders’s plan have admitted that under single payer, not all patients seeking care will obtain it. In 2018, People’s Policy Project President Matt Bruenig claimed that while demand for care might rise under single payer, “aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit.”

By eliminating virtually all patient payments for their own care, single payer would increase demand for care—demand Bruenig concedes the system likely could not meet, even under normal circumstances. Consider that an outbreak centered more than 6,000 miles from the Pacific coast has already led to a run on respiratory face masks in the United States. During a widespread outbreak on our shores, an influx of both sick and worried-but-well patients could swamp hospitals already facing higher demand for “free” care.

Bureaucrats’ Questionable Spending Priorities

While Sanders’s legislation attempts to provide emergency surge capacity for the health-care system, experience suggests federal officials may not spend this money wisely. Section 601 of the House and Senate single-payer bills include provisions for a “reserve fund” designed to “respond to the costs of treating an epidemic, pandemic, natural disaster, or other such health emergency.” However, neither of the bills include a specific amount for that fund, leaving all decisions for the national health care budget in the hands of the Department of Health and Human Services.

And federal officials demonstrated a questionable sense of policy priorities in the years leading up to the 2014 Ebola outbreak. Of the nearly $3 billion from Obamacare’s Prevention and Public Health Fund given to the Centers for Disease Control in the years 2010-2014, only about 6 percent went towards building epidemiology and laboratory capacity. Instead, CDC spent $517.3 million funding grants focused on objectives like “improving neighborhood grocery stores” and “promoting better sidewalks and street lighting.”

Socialized Medicine Brought to Its Knees By…the Flu?

Including a system of global budgets as part of a transition to single payer would leave hospitals with little financial flexibility to cope with a sudden surge of patients. Sanders’s Senate version of single-payer legislation does not include such a payment mechanism, but the House single-payer bill does. Sen. Elizabeth Warren and other liberal think-tanks believe the concept, which provides hospitals lump-sum payments to cover the facilities’ entire operating budget, can help reduce health-care costs.

But in its May 2019 report on single payer, the Congressional Budget Office noted that consistently slow growth of global budget payments in Britain’s National Health Service has “created severe financial strains on the health care system.” And how: Rising hospital bed occupancy rates have created longer wait times in emergency rooms, with patients stuck on gurneys for hours. In one example of its annual “winter crisis,” two years ago the NHS postponed 55,000 surgeries due to capacity constraints, with one ER physician apologizing for “Third World conditions of the department due to overcrowding.”

A British health system barely able to cope with a predictable occurrence like a winter flu outbreak seems guaranteed to crumble in the face of a major pandemic. Voters lured by the siren song of socialism should bear that in mind as they ponder news of the coronavirus and Sanders’ “Medicare for All.”

This post was originally published at The Federalist.

Joe Biden’s Obamacare Gaffe Points to a Larger Truth

In Iowa just before the New Year, former Vice President Joe Biden had an interesting response to a voter’s concerns about Obamacare. The voter said his father had lost his coverage when the law’s major provisions took effect in 2014, and the “replacement” plans proved far more expensive. Asked to apologize for what PolitiFact dubbed its “Lie of the Year” for 2013—that “If you like your plan, you can keep it”—Biden demurred by claiming the following:

There’s two ways people know when something is important. One, when it’s so clear when it’s passed that everybody understands it. And no one did understand Obamacare, including the way it was rolled out. And the gentleman’s right—he said you could keep your doctor if you wanted to, and you couldn’t keep your doctor if you wanted to, necessarily. He’s dead right about that.

On its face, Biden’s comments initially resemble House Speaker Nancy Pelosi’s “We have to pass the bill so that you can find out what is in it” gaffe. But in reality, they hint at a larger truth: the federal government has gotten so big and sprawling, nobody really understands it.

Pelosi’s ‘Kinsley Gaffe’

Just before Obamacare’s passage in March 2010, Pelosi made comments that conservatives have parodied for most of the ten years since:

Upon closer inspection, though, her comments centered on the political messaging about the law, rather than the underlying policy. She prefaced her infamous quote by noting that “You’ve heard about the controversies within the bill, the process about the bill.”

But in Pelosi’s view, the American people had not heard about the substance of the bill itself: “I don’t know if you have heard that it is legislation for the future.” She went on to talk a bit about preventive care measures contained in Obamacare, which in her view would lower health-care costs. She then gave her infamous quote about passing the bill “so that you can find out what is in it, away from the fog of the controversy.”

Pelosi’s statement still seems extraordinary. She admitted that, even with Barack Obama—who won the presidency in fair measure through his rhetoric—in the White House, more than 250 Democrats in the House, and 60 Democrats in the Senate, Obamacare had proven a political failure. Democrats had lost the messaging battle in 2009 and 2010, and could only hope that enacting the legislation and allowing Americans to see its purported benefits could turn the dynamic around.

But Pelosi’s comments said “we have to pass the bill so that you can find out what is in it”—emphasis on the second person. She still claimed to know the contents of the legislation, contra the recent claims of the vice president at the time.

So Much for ‘Experts’

On one level, Biden’s comments echoed Pelosi’s. He talked about “the way it was rolled out”—a likely reference to the messaging battles of 2009-10, the “debacle” of the exchange launch in late 2013, or a combination of the two.

But unlike Pelosi—who said the public didn’t understand Obamacare—Biden said that “no one did understand Obamacare.” One wonders whether the statement meant to inoculate Obama from accepting blame for his “like your plan” rhetoric, even though Obama himself apologized for misleading the public on the issue in late 2013.

Regardless, Biden’s rhetoric echoes the example of Max Baucus, at the time the chairman of the Senate Finance Committee. Asked shortly after the legislation passed whether he had read Obamacare prior to its enactment, he responded that “I don’t think you want me to waste my time to read every single word of that health care bill,” because “we hire experts” who are the only people who “know what the heck it is:”

Except that four years later, one of those “experts” who worked on Baucus’ staff at the time, Yvette Fontenot, admitted that when drafting Obamacare’s employer mandate, “We didn’t have a very good handle on how difficult operationalizing the provision would be at that time.” So, to borrow Baucus’ own phrase, even one of his self-appointed “experts” didn’t “know what the heck it is” either.

Why Expand a Government You Can’t Even Understand?

Biden’s comments once again reveal that the federal government has become too big and sprawling for anyone to understand. Yet he and his Democratic colleagues continue to push massive, multi-trillion-dollar expansions of government as part of their presidential campaigns. Sen. Elizabeth Warren goes so far as to claim that “experts” can fix just about everything that’s wrong with the world, even though Biden’s admission shows that they need to start by fixing the problems they caused.

As the old saying goes, when you’re in a hole, stop digging. That axiom applies equally to Biden’s propensity to put his foot in his mouth and Democrats’ desire to expand a government they do not understand.

This post was originally published at The Federalist.

Elizabeth Warren’s Health Plan and the Limits of “Experts”

By one count, Sen. Elizabeth Warren used 9,275 words in her health care plan (that is, her original health care plan, not the one she released two weeks later, to overcome the political obstacles she created in the first version). Of that lengthy verbiage, one word stands out: “Expert” appears no fewer than 18 times in the document.

According to Warren, “the experts conclude” that her plan would cost $20.5 trillion over a decade; other “top experts…examine[d] options” to pay for that new federal spending. She cited experts in triplicate for emphasis, noting “the conclusions of expert after expert after expert” that a single-payer health care system can cover all Americans while lowering costs. Warren even pledged that “no for-profit insurance company should be able to stop anyone from seeing the expert…they need.”

Therein lies her biggest problem: In farming out every policy issue for “experts” to solve, Warren effectively insults the intelligence of American voters—telling them they’re not smart enough to solve their own problems, or even to understand the details of her proposed solutions.

‘Experts’ Couldn’t Even Build a Website

The Massachusetts senator’s reliance on experts jives with her campaign’s unofficial slogan. No matter the issue, Warren has a plan for that—blessed by the experts—to enact her agenda. But as Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” For reasons both practical and philosophical, Warren and her technocratic ilk might benefit from some humility as they seek to remake the health care system—and the nation.

Six years ago this fall, the failure of healthcare.gov provided a searing example of the limits of expertise. After years of planning and countless federal dollars, what Health and Human Services Secretary Kathleen Sebelius called a “debacle” played out in slow-motion on national television. Half a century on from Halberstam’s best and brightest, Barack Obama had to concede that government was “generally not very efficient” at procurement and technology.

Another politician who invoked “experts” regarding health policy, Max Baucus, did so in August 2010. Then the chairman of the Senate Finance Committee, Baucus said he did not bother to read the Obamacare legislation he helped to draft because “It takes a real expert to know what the heck it is. We hire experts.”

Nearly four years later, one of those experts—Yvette Fontenot, who worked on Baucus’ staff during the Obamacare debate—admitted that when drafting the law’s employer mandate, “we didn’t have a very good handle on how difficult operationalizing the provision would be at that time.” Here again, remaking a health system approaching $4 trillion in size brings unintended consequences lurking at every corner.

Yet Warren and her “experts” see no such reason for caution. One of the authors of her health care paper, former Obama administration official Donald Berwick, once said, “I want to see that in the city of San Diego or Seattle there are exactly as many MRI units as needed when operating at full capacity. Not less and not more.” Implicit in his statement: Federal officials, sitting at desks in Washington, or at Medicare’s headquarters in Baltimore, can quantify and assess the “right” number of machines, facilities, and personnel in every community across the land.

Liberals Act Like Voters Are Stupid

A belief that administrators should, let alone can, effectively micromanage an entire health system requires no small amount of hubris. Indeed, Berwick said in a 2008 speech that “I cannot believe that the individual health care consumer can enforce through choice the proper configurations of a system as massive and complex as health care. That is for leaders to do.”

In this vein, Berwick echoed his Obama administration colleague Peter Orszag, who in advocating for an unelected board to make recommendations reducing health spending—a change included in Obamacare, but repealed by Congress last yearargued that “we might be a healthier democracy if we were slightly less democratic.”

From the 2004 work “What’s the Matter with Kansas?” to the post-mortems after the last presidential election, liberals continue to question why some households vote against their supposed financial interests. The “expert” mentality—as Orszag wrote, “relying more on…depoliticized commissions for certain policy decisions”—likely plays a role, as by its very nature and through its soft paternalism it disenfranchises Americans.

For instance, studies suggest most low-income individuals do not particularly value Medicaid coverage, yet neither Warren nor others on the left spend much time debating whether expanding health insurance represents the best way to help the poor. As Reagan would note, they’re from the government, and they’re here to help.

Warren thinks that to win the presidency, she must convince voters she has a plan for everything. In reality, her campaign’s hopes may rest instead on developing a plan to narrow the growing gap between the rulers—her beloved “experts”—and the ruled.

This post was originally published at The Federalist.

The Left’s Health Care Vision a Prescription for Brute Government Force

Even as Democrats inveigh against President Trump for his alleged norm-shattering and contempt for the rule of law, their health care plans show a growing embrace of authoritarianism. For instance, Rep. Adam Schiff (D-CA) recently dubbed the President’s July 25 call with Ukrainian President Volodymyr Zelensky “a classic mafia-like shakedown.” He knows of which he speaks, because the Democratic agenda on health care now includes threats to destroy any entities failing to comply with government-dictated price controls.

The latest evidence comes from Colorado, where several government agencies recently submitted a draft report regarding the creation of a “state option” for health insurance. The plan would not create a state-run health insurer; instead, it would see agencies dragooning private sector firms to comply with government diktats.

The plan would “require insurance carriers that offer plans in a major market,” whether individual, small group, or large group, “to offer the state option as well.” In these state-mandated plans insurers must offer, carriers would have to abide by stricter controls on their administrative costs, in the form of medical loss ratio requirements, than those dictated by Obamacare.

For medical providers, the Colorado plan would use “payment benchmarks” to cap reimbursement amounts for doctors and hospitals. And if hospitals decline to accept these government-imposed price controls, the report ominously says that “the state may implement measures to ensure health systems participate.”

In comments to reporters, Colorado officials made clear their intent to coerce providers into this price-controlled system. Insurance Commissioner Michael Conway admitted that “If our hospital systems don’t participate, this won’t work….We can’t allow that to happen.” The head of Colorado’s Department of Health Care Policy and Financing, Kim Bimestefer, said that “if we feel that the hospitals are not going to participate, we will require their participation.”

State officials did not elaborate on the mechanisms they would use to compel participation in the state option. But they could attempt to require hospitals and insurers to participate in the new plan to maintain their license to operate in Colorado—a likely unconstitutional condition of licensure.

In threatening this level of coercion—agree to price controls, or we’ll shut down your business—Colorado Gov. Jared Polis imitated his fellow Democrat, House Speaker Nancy Pelosi. Pelosi’s proposed drug pricing bill, up for a vote in the House as soon as next month, would impose excise taxes of up to 95 percent of a drug’s sale price if companies refuse to “negotiate” with the federal government.

In its analysis of Pelosi’s legislation, the Congressional Budget Office (CBO) noted that, because drug makers could not deduct the 95 percent excise tax for income tax purposes, “the combination of income taxes and excise taxes on the sales could cause the drug manufacturer to lose money if the drug was sold in the United States.” Perhaps unsurprisingly, CBO concluded that the excise tax would not generate “any significant increase in revenues,” as “manufacturers would either participate in the negotiating process”—because they have no effective alternative—“or pull a particular drug out of the U.S. market entirely.”

CBO also noted, in a classic bit of understatement, that Pelosi’s bill “could result in litigation,” for threatening losses on any company that dares defy the government’s offer of “negotiation.” But the left seems uninterested in abiding by limits on government power—or the consistency of its own arguments. As I noted this spring, other proposed legislation in Congress would abolish the private health care market. Less than one decade after forcing all Americans to buy a product for the first time ever, in the form of Obamacare’s insurance mandate, liberals now want to prohibit all Americans from purchasing care directly from their doctors.

These recent proposals continue a virulent strain of authoritarianism that has permeated progressivism’s entire history. Franklin Roosevelt threatened to invoke emergency powers during his first inaugural address, and Rahm Emanuel infamously said during the Great Recession that “you never want a serious crisis to go to waste.” Make no mistake: The health care system needs patient-centered reform. But the true crisis comes from the progressives who would utilize blunt government force to seize control of one-fifth of the nation’s economy.

This post was originally published at The Daily Wire.

How a Massive Medicare Regulation Illustrates the Problems of Single Payer

What do provisions in a federal regulation, released on a sleepy Friday in August, have to do with the raging debate regarding single-payer health care? As it turns out, plenty.

By definition, single-payer health care assumes that one payer will finance all the care provided by the nation’s doctors, hospitals, and other medical providers. But this premise comes with an important corollary: Funding all medical providers’ care through a single source means that source—the federal government—must pay those providers the right amount. Paying providers too much wastes taxpayer resources; paying them too little could cause them to close.

The Rural Wage Index and MRI Counting

Consider, for instance, the regulation governing Medicare inpatient hospital payments for 2020, which the Centers for Medicare and Medicaid Services (CMS) released on Friday, August 2. That 2,273-page regulation—no, that’s not a typo—included major changes to Medicare payment policies.

Most notably, the final rule changed the Medicare hospital wage index. For years, hospitals in rural areas have complained that the current wage index exacerbates wage disparities, under-paying hospitals in low-wage and rural areas, while over-paying hospitals elsewhere. According to CMS, the final rule increased the wage index for many rural hospitals, while slightly reducing payment rates to other hospitals, because CMS must implement the change in a budget-neutral manner.

Consider also a comment made several years ago by Donald Berwick, former CMS administrator and a strong advocate of single-payer health care. In a 1993 interview, Berwick said that “I want to see that in the city of San Diego or Seattle there are exactly as many MRI units as needed when operating at full capacity. Not less and not more.”

‘Little Intellectual Elite’

I don’t know whether the wage index change represents a more accurate way of calculating hospital payments, although I suspect it will make some hospitals’ payments more accurate, and some less accurate. But I don’t presume to know the financial situations of each of the United States’ thousands of hospitals, let alone believe I can calculate the change’s effects for each of them.

Conversely, liberals have the arrogance, even hubris, to believe that a massive—not to mention costly—federal bureaucracy can track and micro-manage the health care system to near-perfection. Remember, this is the same federal government that but a few years ago couldn’t build a website for Obamacare. As Ronald Reagan famously said in his “A Time for Choosing” speech 45 years ago:

This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can govern ourselves.

Berwick, and his fellow single-payer supporters want to place our health care system in the care of that intellectual elite—although, given the size of our health care system, the bureaucracy needed to control it may prove far from “little.” (But hey, they’re from the government and they’re here to help.)

Invitation to Corruption

Four years ago, federal prosecutors obtained an indictment of Sen. Robert Menendez (D-NJ) on bribery charges, for accepting campaign contributions and other gifts from Miami physician Salomon Melgen. Among other things, Menendez repeatedly contacted Medicare officials and asked them to stop seeking $9 million in repayments from Melgen, who was eventually convicted on 67 counts of Medicare fraud.

A U.S. senator receiving nearly $1 million in gifts from a Medicare fraudster seems shocking enough. But increasing the federal government’s influence over health policy will make scenarios like this even more likely—and will make things like hospitals’ yearslong lobbying over the wage index seem like small potatoes.

In “Federalist 51,” James Madison famously wrote that “In framing a government which is to be administered by men over men, the great difficulty lies in this: You must first enable the government to control the governed; and in the next place oblige it to control itself.” Single-payer supporters’ obsession over the former, to the exclusion of the latter, bodes ill for any supposed “efficiency gains” resulting from single payer—to say nothing of the integrity of our government.

This post was originally published at The Federalist.

Antiquated Kidney Care System Shows Single Payer’s Poor Care

Earlier this month, President Trump signed another executive order on health care, this one related to the treatment of patients with kidney disease. The administration estimates the measures will ultimately save billions of taxpayer dollars, and up to 28,000 lives per year.

Critics highlighted that Trump’s order relies upon authorities in Obamacare to reform the kidney care system, even as his administration argues that federal courts should strike down the entire law. But these critics omitted another, even greater irony: At a time the left wants to create a single-payer health care system, the deplorable condition of kidney care in this country—with high death rates, and patients unnecessarily suffering because they continue to receive outdated and inefficient treatments—illustrates perfectly all the flaws of government-run health care.

Health Care ‘Innovation,’ Circa 1973

  • Only 12 percent of American patients undergo dialysis at home, compared to 80 percent in Hong Kong. Even Guatemala has a 56 percent in-home dialysis rate.
  • A total of $114 billion in federal spending, just to treat this one condition.
  • Half of the patients who undergo dialysis die within five years.
  • We’re currently using “Decades-old models of care,” as described by one kidney care administrator: “The last 30 years as a country all we’ve done is wait for kidneys to fail and we put people on dialysis.”

As Health and Human Services Secretary Alex Azar, whose father received a transplanted kidney five years ago, noted in a speech in March: “One of the key reasons for our failing policies is that kidney care in particular has some of the worst incentives in American health care.”

Why does kidney care have some of the worst incentives in a health care system plagued with all sorts of perverse disincentives? Even Vox stumbled across the truth in an article on the issue: “Medicare has covered all end-stage kidney disease treatment since 1973.”

Because Medicare provides full coverage for most kidney care patients, providers have very little incentive to innovate. The two largest dialysis providers—DaVita and Fresenius—get paid more for providing care in clinics rather than at home. As a result, American patients (as opposed to patients in other countries) must endure the hardship of taking hours out of their day several times per week to go to dialysis clinics, rather than receiving the treatment in the comfort of their home while they sleep.

But because dialysis providers have little qualms charging the federal government beaucoup bucks for substandard care, and because the federal government does not adapt nearly as quickly to new care models as the private sector, kidney patients—and taxpayers—have suffered. It’s but another example of how government-run health care inflicts its greatest harms on the most vulnerable patients.

Health Care Run by Bureaucrats

The Trump administration’s executive order envisions new delivery models for kidney care proposed by the Center for Medicare and Medicaid Innovation (CMMI). As noted above, some pointed out that Obamacare created CMMI, meaning that if federal courts strike down all of the law, the authority to implement these changes would disappear. The critics ignore one key fact: Congress enacted Obamacare into law nearly a decade ago—yet neither Congress nor CMMI took action on kidney care issues until this point.

The fact that it took a self-proclaimed “innovation” center nearly a decade to propose reforms to kidney care reinforces the inability to change within the entire federal health care bureaucracy. Just before Obamacare’s enactment, Sen. Max Baucus (D-MT), then-chair of the Senate Finance Committee, called officials within the Centers for Medicare and Medicaid Services “hidebound, not very creative, a crank-turning bunch of folks.”

The lack of progress on kidney care for so many years reinforces the accuracy of Baucus’ assessment. Yet the left wants to empower these same “hidebound” bureaucrats with authority not just over Medicare, but all Americans’ health care treatments.

Note to American patients: If you want the best health care money could buy as of 1973—the year when Medicare began coverage of end-stage renal disease—then you’ll love single-payer health care. If, on the other hand, you prefer access to modern, 21st-century medicine, then you might want to stick with another type of health care system—one run by doctors and patients rather than government bureaucrats.

This post was originally published at The Federalist.

Meet the Radical Technocrat Helping Democrats Sell Single-Payer

If anyone had doubts about the radical nature of Democrats’ health care agenda, they needn’t look further than the second name on the witness list for this Wednesday’s House Ways and Means Committee hearing on single-payer health care: Donald Berwick of the Institute for Healthcare Improvement.

If that name sounds familiar, it should. In summer 2010, right after Obamacare’s passage, President Obama gave Berwick a controversial recess appointment to head the Centers for Medicare and Medicaid Services (CMS). Democrats refused to consider Berwick’s nomination despite controlling 59 votes in the Senate at the time, and he had to resign as CMS administrator at the end of his recess appointment in late 2011.

Berwick’s History of Radical Writings

Even a cursory review of Berwick’s writings explains why Obama’s only option was to push him through with a recess appointment, and why Democrats refused to give Berwick so much as a nomination hearing. As someone who read just about everything he wrote until his nomination—thousands of pages of journal articles, books, and speeches—I know the radical nature of Berwick’s thinking all too well. He believes passionately in a society ruled by a technocratic elite, thinking that a core group of government planners can run the country’s health care system better than individual doctors and patients.

Here is what this doctor believes in, in his own words:

  • Socialized Medicine: “Cynics beware: I am romantic about the National Health Service; I love it. All I need to do to rediscover the romance is to look at health care in my own country.”
  • Control by Elites: “I cannot believe that the individual health care consumer can enforce through choice the proper configurations of a system as massive and complex as health care. That is for leaders to do.”
  • Wealth Redistribution: “Any health care funding plan that is just, equitable, civilized, and humane must—must—redistribute wealth from the richer among us to the poorer and less fortunate.”
  • Shutting Medical Facilities: “Reduce the total supply of high-technology medical and surgical care and consolidate high-technology services into regional and community-wide centers … Most metropolitan areas in the United States should reduce the number of centers engaging in cardiac surgery, high-risk obstetrics, neonatal intensive care, organ transplantation, tertiary cancer care, high-level trauma care, and high-technology imaging.”
  • End of Life Care: “Most people who have serious pain do not need advanced methods; they just need the morphine and counseling that have been available for centuries.”
  • Cost-Effectiveness Rationing of Care: “The decision is not whether or not we will ration care—the decision is whether we will ration with our eyes open.”
  • Doctors Putting “The System” over their Patients: “Doctors and other clinicians should be advocates for patients or the populations they service but should refrain from manipulating the system to obtain benefits for them to the substantial disadvantage of others.”
  • Standardized “Cookbook Medicine”: “I would place a commitment to excellence—standardization to the best-known method—above clinician autonomy as a rule for care.”

For those who want a fuller picture of Berwick’s views, in 2010-11 I compiled a nearly 30-page dossier featuring excerpts of his beliefs, based on my comprehensive review of his prior writings and speeches. That document is now available online here, and below.

Where’s the Political Accountability?

Some of Berwick’s greatest admiration is saved for Britain’s National Health Service on the grounds that it was ultimately politically accountable to patients. For instance, Berwick said his “rationing with our eyes open” quote was “distorted,” claiming that

Someone, like your health insurance company, is going to limit what you can get. That’s the way it’s set up. The government, unlike many private health insurance plans, is working in the daylight. That’s a strength.

When running for governor of Massachusetts in 2013, Berwick claimed he “regrets listening to White House orders to avoid reaching out to congressional Republicans.” But that doesn’t absolve the fact that Berwick went to great lengths to avoid the political accountability he previously claimed to embrace.

It also doesn’t answer the significant questions about why Obama waited until after Obamacare’s enactment to nominate Berwick—deliberately keeping the public in the dark about the radical nature of the person he wanted to administer vast swathes of the law.

Thankfully, however, Wednesday’s hearing provides a case of “better late than never.” Republicans will finally get a chance to ask Berwick about the extreme views expressed in his writings. They will also be able to raise questions about why Democrats decided to give him an official platform to talk about single payer (and who knows what else).

This post was originally published at The Federalist.

Inside the Federal Government’s Health IT Fiasco

Recent surveys of doctors show a sharp rise in frustrated physicians. One study last year analyzed a nearly 10 percentage point increase in burnout from 2011 to 2014, and laid much of the blame for the increase on a single culprit: Electronic health records. Physicians now spend more time staring at computer screens than connecting with patients, and find the drudgery soul-crushing.

What prompted the rise in screen fatigue and physician burnout? Why, government, of course. A recent Fortune magazine expose, titled “Death by 1,000 Clicks,” analyzed the history behind federal involvement in electronic records. The article reveals how electronic health records not only have not met their promise, but have led to numerous unintended and harmful consequences for American’s physicians, and the whole health care market.

Electronic Bridge to Nowhere

The Fortune story details all the ways health information technology doesn’t work:

  • Error-prone and glitch-laden systems;
  • Impromptu work-arounds created by individual physicians and hospitals make it tough to compare systems to each other;
  • An inability for one hospital’s system to interact with another’s—let alone deliver data and records directly to patients; and
  • A morass of information, presented in a non-user-friendly format, that users cannot easily access—potentially increasing errors.

The data behind the EHR debacle illustrate the problem vividly. Physicians spend nearly six hours per day on EHRs, compared to just over five hours of direct time with patients. A study concluding that emergency room physicians average 4,000 mouse clicks per shift, a number that virtually guarantees doctors will make data errors. Thousands of documented medication errors caused by EHRs, and at least one hundred deaths (likely more) from “alert fatigue” caused by electronic systems’ constant warnings.

Other anecdotes prove almost absurdly hysterical. The EHR that presents emergency room physicians 86 separate options to order Tylenol. The parody Twitter account that plays an EHR come to life: “I once saw a doctor make eye contact with a patient. This horror must stop.” The EHR system that warns physicians ordering painkillers for female patients about the dangers of prescribing ibuprofen to women while pregnant—even if the patient is 80 years old.

What caused all this chaos in the American health care market? One doctor explained his theory: “I have an iPhone and a computer and they work the way they’re supposed to work, and then we’re given these incredibly cumbersome and error-prone tools. This is something the government mandated” (emphasis added). Therein lies the problem.

Obama’s ‘Stimulus’ Spending Spree

In June 2011, when talking about infrastructure projects included in the 2009 “stimulus” legislation, President Obama famously admitted that “shovel-ready was not as shovel-ready as we expected.” Electronic health records, another concept included in the “stimulus,” ran into a very similar problem. Farzad Mostashari, who worked on health IT for the Obama administration from 2009-11, admitted to Fortune that creating a useful national records system was “utterly infeasible to get to in a short time frame.”

At the time, however, the Obama administration billeted electronic health records as the “magic bullet” that would practically eliminate medical errors, while also reducing health costs. Every government agency had its own “wish list” of things to include in EHR systems. Mostashari admitted this dynamic led to the typical bureaucratic problem of trying to do too much, too fast: “We had all the right ideas that were discussed and hashed out by the committee, but they were all of the right ideas” (emphasis original).

Meanwhile, records vendors saw dollar signs, and leapt at the business opportunity. As Fortune notes, many systems weren’t ready for prime time, but vendors didn’t focus on solving those types of inconsequential details:

[The] vendor community, then a scrappy $2 billion industry, griped at the litany of requirements but stood to gain so much from the government’s $36 billion injection that it jumped in line. As Rusty Frantz, CEO of EHR vendor NextGen Healthcare, put it: ‘The industry was like, ‘I’ve got this check dangling in front of me, and I have to check these boxes to get there, and so I’m going to do that.’’

The end result: Hospitals and doctors spent billions of dollars—because the government paid them to do so, and threatened to reduce their Medicare and Medicaid payments if they didn’t—to buy records systems that didn’t work well. These providers then became stuck with the systems once they purchased them, because of the systems’ cost, and because providers could not easily switch from one system to another.

David Blumenthal, who served as national coordinator for health IT under Obama, summed up the debacle accurately when he admitted that electronic health records “have not fulfilled their potential. I think few would argue they have.”

Electronic health records therefore provide an illustrative cautionary tale in which a government-imposed scheme spends billions of dollars but fails to live up to its hype, and alienates physicians and providers in the process. When the same thing happens under Democrats’ next proposed big-government health scheme—whether single payer, or some “moderate compromise” that only takes away half of Americans’ existing health coverage—don’t say you weren’t warned.

This post was originally published at The Federalist.