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.

Note to Britain: You Can Have Your NHS

As expected, the American press has heavily covered President Trump’s visit to Europe, including his time spent in Great Britain. But a row (that’s British for “argument”) that has gone under-reported on this side of the Atlantic also holds major implications for American patients.

Based on comments the President made earlier in the week, British politicians now believe they need to protect the country’s National Health Service (NHS) from “privatization” at the hands of American corporations. But even as they do so, another controversy—about the ways in which Britain denies life-saving treatments to patients, solely on cost grounds—illustrates the problems with socialized medicine, which the left wants to export to the United States.

Concern about Trade Agreements

During a press conference in London Tuesday, a British reporter questioned Trump about a post-Brexit trade deal between the U.S. and Britain. The reporter specifically asked whether “the entire economy needs to be on the table” in those discussions, “including the NHS.” Trump responded that “everything with a trade deal is on the table.”

Those comments—which Trump later attempted to walk back—prompted outrage that Britain’s “beloved” NHS was at risk. British politicians across parties raised concern that American companies could receive NHS contracts (even though subsidiaries of U.S. corporations have already done so), or that a free trade agreement could supersede legislative efforts by Parliament to prohibit additional private contracting within the health service.

The Health Secretary, Matt Hancock—an announced candidate in the race to succeed Theresa May as Conservative Party leader and Prime Minister—epitomized the sentiments, claiming that “the NHS

NHS Denying Patients Care

The controversy continued at Prime Minister’s Questions in the House of Commons Wednesday. In that hourlong session, no fewer than five questions asked whether the NHS was “for sale,” or some variation thereof. But the sixth NHS-related question, by Labour MP Karl Turner, proved the most revealing:

Twelve months ago, the Prime Minister told this House that she wanted a speedy resolution to the funding row between NHS England and Vertex regarding the drug Orkambi to treat cystic fibrosis. My seven-year-old constituent Oliver Ward wrote to the Prime Minister recently asking what progress she has made. Could the Minister please give Oliver some good news and tell him that he need not get up every day worrying about this terrible injustice?

Turner’s question referred to Orkambi, a drug that could help thousands of British patients currently suffering from cystic fibrosis. But the NHS refuses to pay for the drug—not because it does not work, but because it does not meet cost thresholds that government bureaucrats have set.

Britain’s National Institute for Health and Clinical Excellence decided in 2016 that the NHS would not pay for Orkambi at the price set by its manufacturer. For the three years since, British patients have not found that decision very NICE at all.

A Precursor of an American Single-Payer System?

Unfortunately, however, liberals want to export the British model of rationing health care on cost grounds to the United States. Recall President Obama’s comments about the issue a decade ago:

The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here….There is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place.

Months after those comments, the New York Times ran an article, entitled “Why We Must Ration Health Care,” that argued for bringing a British-style rationing model to our shores.

This prevailing mentality among intellectual elites explains why neither the House nor Senate single-payer bills prohibit a government-run health plan from implementing cost-effectiveness research. In fact, the House bill explicitly provides for cost-effectiveness research as a method of determining drug prices, because most liberals believe that bureaucrats can and should have the power to restrict access to care on cost grounds. Most Americans, on the other hand, would strongly object to this rationing of care.

As for British politicians saying the NHS “isn’t for sale,” I could not care less—I wouldn’t want to buy it even if it were. The American health care system has its flaws, to be sure, but I have little interest in creating a system where government bureaucrats have near-total control over patients’ medical decisions, and use that power to deny access to life-saving care. I think most Americans would agree.

This post was originally published at The Federalist.

The CBO Report on Single Payer Isn’t the One We Deserve to See

On Wednesday, the Congressional Budget Office (CBO) released a 30-page report analyzing a single-payer health insurance plan. While the publication explained some policy considerations behind such a massive change to America’s health care market, it included precious few specifics about such a change—like what it would cost.

Sen. Bernie Sanders (I-VT), perhaps single payer’s biggest supporter, serves as the ranking member of the Senate Budget Committee. If he asked the budget scorekeepers to analyze his legislation in full to determine what it would cost, and how to go about paying for the spending, CBO would give it high-priority treatment.

But to the best of this observer’s knowledge, that hasn’t happened. Might that be because the senator does not want to know—or, more specifically, does not want the public to know—the dirty secrets behind his proposed health-care takeover?

Hypothetical Scenarios

The CBO report examined single payer as an academic policy exercise, running through various options for establishing and operating such a mechanism. In the span of roughly thirty pages, the report used the word “would” 245 times and “could” 209 times, outlining various hypothetical scenarios.

That said, CBO did highlight several potential implications of a single-payer system for both the demand and supply of care. For instance, “free” health care could lead to major increases in demand that the government system could not meet:

An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care. People who are currently uninsured would receive coverage, and some people who are currently insured could receive additional benefits under the single-payer system, depending on its design. Whether the supply of providers would be adequate to meet the greater demand would depend on various components of the system, such as provider payment rates. If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.

The report noted that in the United Kingdom, a system of global budgets—a concept included in the House’s single-payer legislation—has led to massive strains on the health-care system. Because payments to hospitals have not kept up with inflation, hospitals have had to reduce the available supply of care, leading to annual “winter crises” within the National Health Service:

In England, the global budget is allocated to approximately 200 local organizations that are responsible for paying for health care. Since 2010, the global budget in England has grown by about 1 percent annually in real (inflation-adjusted) terms, compared with an average real growth of about 4 percent previously. The relatively slow growth in the global budget since 2010 has created severe financial strains on the health care system. Provider payment rates have been reduced, many providers have incurred financial deficits, and wait times for receiving care have increased.

While cutting payments to hospitals could cause pain in the short term, CBO noted that reducing reimbursement levels could also have consequences in the long term, dissuading people from taking up medicine to permanently reduce the capacity of America’s health-care market:

Changes in provider payment rates under the single-payer system could have longer-term effects on the supply of providers. If the average provider payment rate under a single-payer system was significantly lower than it currently is, fewer people might decide to enter the medical profession in the future. The number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities. That decline could lead to a shortage of providers, longer wait times, and changes in the quality of care, especially if patient demand increased substantially because many previously uninsured people received coverage and if previously insured people received more generous benefits.

That said, because the report did not analyze a specific legislative proposal, its proverbial “On the one hand, on the other hand” approach generates a distinctly muted tone.

Tax Increases Ahead

To give some perspective, the report spent a whopping two pages discussing “How Would a Single Payer System Be Financed?” (Seriously.) This raises the obvious question: If single-payer advocates think their bill would improve the lives of ordinary Americans, because the middle class would save so much money by not having to pay insurance premiums, wouldn’t they want the Congressional Budget Office to fully analyze how much money people would save?

During his Fox News town hall debate last month, Sanders claimed a large show of support from blue-collar residents of Bethlehem, Pennsylvania for single payer. The ostensible support might have something to do with Sanders’ claim during the town hall that “the overwhelming majority of people are going to end up paying less for health care because they’re not paying premiums, co-payments, and deductibles.”

Where have we heard that kind of rhetoric before? Oh yeah—I remember:

At least one analysis has already discounted the accuracy of Sanders’ claims about people paying less. In scrutinizing Sanders’ 2016 presidential campaign plan, Emory University economist Kenneth Thorpe concluded that the plan had a $10 trillion—yes, that’s $10 trillion—hole in its financing mechanism.

Filling that hole with tax increases meant that 71 percent of households would pay more under single payer than under the status quo, because taxes would have to go up by an average of 20 percentage points. Worse yet, 85 percent of Medicaid households—that is, people with the lowest incomes—would pay more, because a single-payer system would have to rely on regressive payroll taxes, which hit the poor hardest, to fund socialized medicine.

Put Up or Shut Up, Bernie

If Sanders really wants to prove the accuracy of his statement at the Fox News town hall, he should 1) ask CBO to score his bill, 2) release specific tax increases to pay for the spending in the bill, and 3) ask CBO to analyze the number of households that would pay more, and pay less, under the bill and all its funding mechanisms.

That said, I’m not holding my breath. A full, public, and honest accounting of single payer, and how to pay for it, would expose the game of three-card monty that underpins Sanders’ rhetoric. But conservatives should keep pushing for Sanders to request that score from CBO—better yet, they should request it themselves.

This post was originally published at The Federalist.

Democrats’ Single-Payer Health Care Bill Raises Serious Questions

On Tuesday, the House’s Democratic majority will hold its first formal proceedings on single payer legislation. The House Rules Committee hearing will give supporters an opportunity to move past simplistic rhetoric and answer specific questions about H.R. 1384, the House single payer bill, such as:

Section 102(a) makes “every individual who is a resident of the United States” eligible for benefits, regardless of their citizenship status. But in September 1993, Hillary Clinton testified before Congress that she opposed “extend[ing]” benefits to “those who are undocumented workers and illegal aliens,” because “too many people come [to the United States] for medical care as it is.” Do you agree with Secretary Clinton that single payer will encourage “illegal aliens” to immigrate to the United States for “free” health care?

Section 102(b) prevents individuals from traveling to the United States “for the sole purpose of obtaining” benefits. Does this provision mean that foreign nationals can receive taxpayer-funded health care so long as they state at least one other purpose—for instance, visiting a tourist site or two—for their travels?

Section 104(a) prohibits any participating provider from “den[ying] the benefits of the program” to any individual for any of a series of reasons, including “termination of pregnancy.” What if the nation’s more than 600 Catholic hospitals—which collectively treat more than one in seven American patients—refuse to join the government program because this anti-conscience provision forces them to perform abortions and other procedures in violation of their deeply-held religious beliefs? How will the government program make up for this lost capacity in the health care system?

Section 201(a) requires the Secretary of Health and Human Services (HHS) to compile a list of “medically necessary or appropriate” services that the single payer program will cover. Does anything in the bill prohibit the Secretary from including euthanasia—now legal in at least eight states—on that list of covered benefits?

Section 401(b) requires HHS to compile an “adequate national database,” which among other things must include information on employees’ hours, wages, and job titles. Will America’s millions of health care workers appreciate having the federal government track their jobs and income? Why does the bill contain not a word about employees’ privacy in this “adequate national database?”

Section 611 creates a system of global budgets to fund hospitals’ entire operating costs through one quarterly payment. But what if this lump-sum proves insufficient? Will hospitals have to curtail operations at the end of each quarter if they exceed the budget government bureaucrats provide to them?

Section 614(b)(2) prohibits payments to providers from being used for any profit or net revenue, essentially forcing for-profit hospital, nursing home, hospice, and other providers to convert to not-for-profit status. Coming on top of the bill’s virtual abolition of private insurers, how much will this collective destruction of shareholder value hurt average Americans’ 401(k) balances?

Section 614(c)(4) prohibits hospital providers from using federal operating funds to finance “a capital project funded by charitable donations” without prior approval. Does this restriction—preventing hospitals from opening new wings funded by private dollars—demonstrate how single payer will ration access to care, by limiting the available supply?

Section 614(f) bars HHS from “utiliz[ing] any quality metrics or standards for the purposes of establishing provider payment methodologies.” Does this prohibition on tying any provider payments to quality metrics serve as confirmation of the low-quality care a single payer system will give to patients?

Section 616 states that, if drug and device manufacturers will not agree to an “appropriate” price for their products—as defined by the government, of course—the HHS Secretary will license their patents away to other companies. But the average pharmaceutical costs approximately $2.6 billion to bring to market. How many fewer drugs will come to market in the future due to this arbitrary restriction on innovation?

Section 701(b)(2)(B) sets future years’ appropriations for the program based in part on “other factors determined appropriate by the [HHS] Secretary.” But this month, Nancy Pelosi filed suit against President Trump’s border emergency declaration, after she claimed that the declaration “undermines the separation of powers and Congress’s [sic] power of the purse.” How does allowing an unelected executive branch official to determine trillions of dollars in appropriations uphold Congress’ “power of the purse?”

Section 901(a)(1)(A) states that “no benefits shall be available under Title XVIII of the Social Security Act”—i.e., Medicare—two years after enactment. How does abolishing the current Medicare program square with the bill’s supposed title of “Medicare for All?”

If single payer supporters can answer all these queries at Tuesday’s hearing, many observers will only have one other question: Why anyone thought the legislation a good idea to begin with.

This post was originally published at Fox News.

Single Payer Wouldn’t Make Health Care a “Right”

In talking about his single-payer bill, which he reintroduced in the Senate on Wednesday, Sen. Bernie Sanders often claims that “I want to end the international embarrassment of the United States of America being the only major country on earth that doesn’t guarantee health care to all people as a right and not a privilege.”

But his legislation would do no such thing. Understanding why demonstrates the inherent drawbacks of his government-centered approach to health policy.

In our own country, low reimbursement rates in many state Medicaid programs can make finding doctors difficult. One 2011 study found that two-thirds of specialist physicians would not accept Medicaid patients, whereas only 11 percent of patients with private insurance could not obtain appointments. Patients with Medicaid also had to wait an average of three weeks longer for an appointment for the few doctors who would see them.

Medicaid suffers from so many access problems that one former director of a state program called a Medicaid card a “hunting license,” because it “gave you a chance to go find a doctor.” That’s the only “guarantee” the Sanders bill actually provides—the guarantee you can try to go find care, not a guarantee you can receive it.

But “access to a waiting list is not access to care.” So ruled four Canadian justices in a landmark 2005 ruling, Chaoulli v. Quebec. In that case, Canada’s Supreme Court overturned Quebec’s ban on private health insurance, finding that it “interfere[d] with life and security,” because “the government is failing to deliver health care in a reasonable manner.”

Indeed, delays and long waits for care plague Canada’s single-payer health system. One study found that approximately 3 percent of the nation’s population remained on waiting lists for care in 2018. From physician referral to the start of treatment, waiting times averaged five months—double that for orthopedic surgery cases.

Government-run health care systems traditionally attempt to contain costs by limiting the available supply of care. Britain’s National Health Service (NHS) follows the same approach as Canada’s single payer system. So patients wait for care there, also.

Consider what happened just last year, when the winter flu outbreak created a national “crisis”: The NHS had to cancel tens of thousands of operations, emergency rooms resembled “Third World” conditions, and ambulances waited for hours to unload patients—because hospitals had no place to put them.

The language in Sanders’ legislation demonstrates how, instead of making health care a “right,” single payer would instead increase demand for care—demand the system could not fulfill. To add insult to injury, the Sanders bill would ban private health insurance—the same type of ban Canada’s Supreme Court struck down—here to the United States, giving patients little way out of a clogged government health system.

Promises aside, Sanders’ “guarantee” of coverage would quickly turn into a guarantee that patients would wait, and wait, for care. The American people deserve better.

This post was originally published at The Federalist.

Single Payer’s Road to Rationing

The reintroduction of Democrats’ single-payer legislation has some families contemplating what total government control of the health-care sector would mean for them. Contrary to the rhetoric coming from liberals, some of the families most affected by a single-payer system want nothing to do with this brave new health care world.

As this father realizes, giving bureaucrats the power to deny access to health care could have devastating consequences for some of the most vulnerable Americans.

Determining the ‘Appropriate’ Use of Medical Resources

To summarize the Twitter thread: The father in question has a 12-year-old son with a rare and severe heart condition. Last week, the son received an implantable cardioverter defibrillator to help control cardiac function.

But because the defibrillator is expensive and cardiologists were implanting the device “off-label”—the device isn’t formally approved for use in children, because few children need such a device in the first place—the father feared that, under a single-payer system, future children in his son’s situation wouldn’t get access to the defibrillator needed to keep them alive.

The father has reason to worry. He cited a 2009 article written by Zeke Emanuel—brother of Rahm, and an advisor in the Obama administration during the debate on Obamacare—which included the following chart:

The chart illustrates the “age-based priority for receiving scarce medical interventions under the complete lives system”—the topic of Emanuel’s article. If a picture is worth a thousand words, then this chart sure speaks volumes.

Also consider some of Emanuel’s quotes from the same article, in which he articulates the principles behind the allocation of scarce medical resources:

Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments.
The complete lives system discriminates against older people….[However,] age, like income, is a ‘non-medical criterion’ inappropriate for allocation of medical resources.

If those quotes do not give one pause, consider another quote by Zeke Emanuel, this one from a 1996 work: “[Health care] services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia.” When that quote resurfaced during the debate on Obamacare in 2009, Emanuel attempted to claim he never advocated for this position—but he wrote the words nonetheless.

The Flaw in Centralized Decision-Making

The father in his Twitter thread hit on this very point. Medical device companies have not received Food and Drug Administration approval to implant defibrillators in children in part because so few children need them to begin with, making it difficult to compile the data necessary to prove the devices safe and effective in young people.

Likewise, most clinical trials have historically under-represented women and minorities. The more limited data make it difficult to determine whether a drug or device works better, worse, or the same for these important sub-populations. But if a one-size-fits-all system makes decisions based upon average circumstances, these under-represented groups could suffer.

To put it another way: A single-payer health care system could deny access to a drug or treatment deemed ineffective, based on the results of a clinical trial comprised largely of white males. The system may not even recognize that that same drug or treatment works well for African-American females, let alone adjust its policies in response to such evidence.

A ‘Difficult Democratic Conversation’

The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here….There is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place.

Some would argue that Obama’s mere suggestion of such a conversation hints at his obvious conclusion from it. Instead of having a “difficult democratic conversation” about ways for government bureaucrats deny patients care, such a conversation should center around not giving bureaucrats the right to do so in the first place.

This post was originally published at The Federalist.

Lowlights of Democrats’ New Single-Payer Bill

Some might think that, having embraced socialism and taking away the health coverage of millions of Americans, the Democratic Party couldn’t move further to the left. Think again.

House Democrats introduced their single-payer bill on Wednesday, and claimed that it’s a “significantly different” bill compared to versions introduced in prior Congresses. It definitely meets that definition—because, believe it or not, it’s gotten significantly worse.

What Remains

Abolition of Medicare—and Most Other Insurance Coverage: As I noted last year, the bill would still eliminate the current Medicare program, by prohibiting Title XVIII of the Social Security Act from paying for any service (Section 901(a)(1)(A)) and liquidating the current Medicare trust funds (Section 701(d)). Likewise, the bill would eliminate the existing insurance coverage of all but the 2.2 million who receive care from the Indian Health Service and the 9.3 million enrolled veterans receiving care from the Veterans Administration.

Taxpayer Funding of Abortion: As before, Section 701(b)(3) of the bill contains provisions prohibiting “any other provision of law…restricting the use of federal funds for any reproductive health service” from applying to the single-payer system. This language would put the single-payer system outside the scope of the Hyde Amendment, thereby permitting taxpayer funding for all abortions.

Lack of Accountability: As with the prior bill, the legislation would give massive amounts of power to bureaucrats within the Department of Health and Human Services (HHS). For instance, the legislation would establish new regional directors of the single-payer system—none of whom would be subject to Senate confirmation.

What Lawmakers Added

More Spending: Section 204 of the new bill federalizes the provision of long-term supports and services as part of the single-payer benefit package. Prior versions of the bill had retained those services as part of the Medicaid program, implemented by states with matching funds from the federal government.

In addition, the revised bill eliminated language in Section 202(b) of the Sanders legislation, which permitted co-payments for prescription drugs to encourage the use of generics. With the co-payments (capped at an annual maximum of $200 in the Sanders bill from last Congress) eliminated, the bill envisions the federal government providing all health services without cost-sharing. This change, coupled with the federalization of long-term supports and services, will result in increased spending—as more people demand “free” health care.

Faster Elimination of Private Coverage: Rather than envisioning a four-year transition to the single-payer system, the revised bill would eliminate all private health insurance within a two-year period. Over and above the myriad philosophical concerns associated with single-payer health care, this accelerated transition period raises obvious questions about whether the new system could get up and running so quickly. After all, Obamacare had an implementation period of nearly four years—yet healthcare.gov failed miserably during its initial launch phase.

In theory, moving away from a fee-for-service method of paying medical providers would eliminate their incentive to perform more procedures—a worthy goal. But in practice, global budgets could also lead to de facto rationing, as hospitals that exceed their budgets might have to stop providing care to patients—just as under-funding within Britain’s National Health Service (NHS) has led to chronic hospital overcrowding.

Compensation Caps: Section 611(b)(5) of the new bill would limit “compensation costs for any employee or any contractor or any subcontractor employee of an institutional provider receiving global budgets,” by applying existing pay restrictions on government contractors to hospitals and facilities in the single-payer program. These restrictions might lead some to wonder whether hospitals could truly be considered independent entities, or merely an arm of the state.

Effective Abolition of For-Profit Medicine: Section 614(a) of the revised bill states that “payments to providers…may not take into account…or be used by a provider for” marketing; “the profit or net revenue of the provider, or increasing the profit or net revenue of the provider;” any type of incentive payment—“including any value-based payment;” and political contributions prohibited by government contractors.

Liberals would argue that eliminating the profit motive will encourage doctors to provide better care, by focusing on patients rather than ways to enrich themselves. But the profit motive also encourages individuals to invest in health care—as opposed to other sectors of the economy—by allowing them to recover a return on their investment.

Effective Elimination of Patents: Section 616(c)(1) of the bill states that “if the manufacturer of a covered pharmaceutical, medical supply, medical technology, or medically necessary assistive equipment refuses to negotiation a reasonable price, the Secretary shall waive or void any government-granted exclusivities with respect to such drug or product,” and shall allow other companies to manufacture the product. By allowing the federal government to march in on a whim and seize a company’s intellectual property, the bill would discourage individuals from investing in such intellectual property in the first place.

“Reasonable” Prices and Rationing: As noted above, Section 616 of the bill requires HHS to determine when the prices of drugs and medical devices are “not reasonable,” by taking into account among other things “the therapeutic value of the drug or product, including cost-effectiveness and comparative effectiveness.” This provision could lead to the federal government denying patients access to drugs deemed too expensive, as occurs currently within Britain’s National Health Service.

This post was originally published at The Federalist.

How Single-Payer Supporters Defy Common Sense

The move to enact single-payer health care in the United States always suffered from major math problems. This week, it revived another: Common sense.

On Monday, the Mercatus Center published an analysis of single-payer legislation like that promoted by socialist Sen. Bernie Sanders (I-VT). While conservatives highlighted the estimated $32.6 trillion price tag for the legislation, liberals rejoiced.

Riiiiiigggggggghhhhhhhhhttttt. As the old saying goes, if something sounds too good to be true, it usually is. Given that even single-payer supporters have now admitted that the plan will lead to rationing of health care, the public shouldn’t just walk away from Sanders’ plan—they should run.

National Versus Federal Health Spending

Sanders’ claim arises because of two different terms the Mercatus paper uses. While Mercatus emphasized the way the bill would increase federal health spending, Sanders chose to focus on the study’s estimates about national health spending.

Although it sounds large in absolute terms, the Mercatus paper assumes only a slight drop for health spending in relative terms. It estimates a total of $2.05 trillion in lower national health expenditures over a decade from single-payer. But national health expenditures would total $59.7 trillion over the same time span—meaning that, if Mercatus’ assumptions prove correct, single-payer would reduce national health expenditures by roughly 3.4 percent.

Four Favorable Assumptions Skew the Results

However, to arrive at their estimate that single-payer would reduce overall health spending, the Mercatus paper relies on four highly favorable assumptions. Removing any one of these assumptions could mean that instead of lowering health care spending, single-payer legislation would instead raise it.

First, Mercatus adjusted projected health spending upward, to reflect that single-payer health care would cover all Americans. Because the Sanders plan would also abolish deductibles and co-payments for most procedures, study author Chuck Blahous added an additional factor reflecting induced demand by the currently insured, because patients will see the doctor more when they face no co-payments for doing so.

Second, the Mercatus study assumes that a single-payer plan can successfully use Medicare reimbursement rates. However, the non-partisan Medicare actuary has concluded that those rates already will cause half of hospitals to have overall negative total facility margins by 2040, jeopardizing access to care for seniors.

Expanding these lower payment rates to all patients would jeopardize even more hospitals’ financial solvency. But paying doctors and hospitals market-level reimbursement rates for patients would raise the cost of a single-payer system by $5.4 trillion over ten years—more than wiping away any supposed “savings” from the bill.

Finally, the Mercatus paper “assumes substantial administrative cost savings,” relying on “an aggressive estimate” that replacing private insurance with one single-payer system will lower health spending. Mercatus made such an assumption even though spending on administrative costs increased by nearly $26 billion, or more than 12.3 percent, in 2014, Obamacare’s first year of full implementation.

Likewise, government programs, unlike private insurance, have less incentive to fight fraud, as only the latter face financial ruin from it. The $60 billion problem of fraud in Medicare provides more than enough reason to doubt much administrative savings from a single-payer system.

Apply the Common Sense Test

But put all the technical arguments aside for a moment. As I noted above, whether a single-payer health-care system will reduce overall health expenses rests on a relatively simple question: Will doctors and hospitals agree to provide more care to more patients for the same amount of money?

Whether single-payer will lead to less paperwork for doctors remains an open question. Given the amount of time people spend filing their taxes every year, I have my doubts that a fully government-run system would generate major improvements.

But regardless of whether providers get any paperwork relief from single-payer, the additional patients will come to their doors seeking care, and existing patients will demand more services once government provides them for “free.” Yet doctors and hospitals won’t get paid any more for providing those additional services. The Mercatus study estimates that spending reductions due to the application of Medicare’s price controls to the entire population will all but wipe out the increase in spending from new patient demand.

If Sanders wants to take a “victory lap” for a study arguing that millions of health care workers will receive the same amount of money for doing more work, I have four words for him: Good luck with that.

Health Care Rationing Ahead

I’ll give the last word to, of all things, a “socialist perspective.” One blog post yesterday actually claimed the Mercatus study underestimated the potential savings under single-payer: “[The study] assumes utilization of health services will increase by 11 percent, but aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit below the level [it] projects” (emphasis mine).

In other words, spending will fall because so many will demand “free” health care that government will have to ration it. To socialists who yearningly long to exercise such power over their fellow citizens, such rationing sounds like their utopian dream. But therein lies their logic problem, for any American with common sense would disagree.

This post was originally published at The Federalist.

Liberals’ “Alternative Facts” on Capping Entitlement Spending

Here’s a policy riddle for you: When is a spending cap not a spending cap? The answer: When a liberal finds it politically inconvenient.

During the confirmation hearing for Health and Human Services Secretary-designee Alex Azar, a staffer for the liberal Center for Budget and Policy Priorities tweeted that Azar supported capping Medicaid. I noted that meant he supported capping Medicaid spending like the caps Democrats enacted as part of Obamacare—and that’s when the fun began.

Then I pointed out that Section 3403 of Obamacare charges the Independent Payment Advisory Board (IPAB) with enforcing a cap on per-beneficiary spending in Medicare. She responded by saying that IPAB contains restrictions on “rationing health care, raising Medicare’s premiums or cost sharing, cutting benefits, or restricting eligibility.”

That response, while accurate, misses the point. First of all, while the law prohibits Medicare from “rationing” benefits, neither Obamacare nor any other law “defines” rationing. Former Health and Human Services secretary Kathleen Sebelius testified to Congress in 2011 that HHS would need to undertake rulemaking to define “rationing.” However, as I noted this summer, “the Obama Administration never even proposed rules ‘protecting’ Medicare beneficiaries from rationing under the IPAB per capita caps—so how meaningful can those protections actually be?”

Capping Spending Does Indeed Reduce It

Second, a cap on spending, by definition, will reduce spending. The implication that one form of cap on spending in Medicare will have no ramifications whatsoever for beneficiaries, while another form of cap on spending in Medicaid will lead to proverbial death and destruction, strains credulity.

But putting those distinctions aside for a second, I asked whether Obamacare capped Medicare spending. I sent links to the portions of Section 3403 that 1) establish a target growth rate for Medicare and 2) instruct IPAB to develop recommendations to reduce spending to meet that target—the definition of a cap in my book, and probably anyone else’s as well.

I asked a simple yes-no question: While they might be implemented in different ways than the caps in Republicans’ “repeal-and-replace” bills, doesn’t IPAB limit the growth rate of Medicare spending to meet a cap?

Answer came there none.

Politically Inconvenient Truths

The political hack—erm, I mean, “analyst”—in question, from the Center for Budget and Policy Priorities, has more than enough health policy experience to recognize a spending cap. According to the center’s website, she served in senior roles in California’s Medicaid program, worked as the primary health staffer for former U.S. senator Al Franken (D-MN), and holds a master’s degree in health policy. She knows better—she just chose not to.

As I have written previously, Democrats don’t want to admit that they imposed per capita spending caps in Medicare as part of Obamacare. They may still fear the political consequences of capping Medicare spending—and more importantly, do not want to give Republicans political “cover” to impose similar caps in Medicaid.

So rather than admit the obvious—yes, Democrats did impose spending caps in Medicare (albeit in a slightly different form than Republicans’ Medicaid proposals last year) as part of Obamacare—this person chose to obfuscate, deflect, deny, and ultimately join Twitter’s version of the Witness Protection Program rather than admit the politically inconvenient truth. And beclowned herself in the process.

After the “repeal-and-replace” process of 2017, I know full well what it means to tell politically inconvenient truths. Going out on a limb to point out flaws in alternatives to Obamacare won me no small amount of flack from others on the Right, and may have cost me business to boot.

But at bottom, I consider myself a conservative health policy analyst, not a Republican one. As such, I feel an obligation to call “balls-and-strikes” based solely on policy, regardless of party. Doing otherwise would harm my reputation and integrity. And in policy circles in this town, one’s good name is the only thing you’ve got.

People can propose “alternative facts” all they like, but not without cost. After our Twitter tete-a-tete, I think less of the analyst in question, and of the Center for Budget and Policy Priorities for employing her. While liberals can talk all they like about a “wonk gap,” or about Republican “science deniers,” they appear to have some in their own midst as well. Just ask liberal health analysts about IPAB’s per capita caps.

This post was originally published at The Federalist.

Liberals’ Hypocrisy on Per Capita Caps

It was, to borrow from Arthur Conan Doyle, the dog that didn’t bark. In releasing the annual report on its finances, Medicare’s actuary last month found that the program would not trigger requirements related to the Independent Payment Advisory Board (IPAB) this year—or for several years to come. Although the Senate and House health-care bills avoided altering Medicare, the IPAB development—or non-development, as it were—should inject some important perspective into the legislative debate.

Many liberal critics of the Republican bills have attacked proposals to impose per capita caps on state Medicaid programs, while conveniently forgetting that Obamacare imposed similar spending caps on Medicare. In fact, Section 3403 of the law empowers IPAB—a board of unelected bureaucrats—to make binding recommendations to Congress reducing program spending if Medicare will exceed statutory limits for spending per beneficiary.

We Care More About Politics than Policy

Some Obamacare supporters claim that statutory restrictions on IPAB—in enforcing Medicare spending caps, the board may not change Medicare benefits or “ration health care”—will protect Medicare beneficiaries in a way that the current bills do not protect Medicaid recipients. But IPAB’s supposed “protections” have their own flaws. The statute does not define “rationing,” and then-Secretary of Health and Human Services (HHS) Kathleen Sebelius testified in 2011 that HHS would need to draft regulations to do so. But the Obama administration never even proposed rules “protecting” Medicare beneficiaries from rationing under the IPAB per capita caps—so how meaningful can those protections actually be?

When push comes to shove, few liberals can justify their support for per capita caps on Medicare, but opposition to similar caps in Medicaid. One day on Twitter, I posed a simple question to Topher Spiro, of the Center for American Progress (CAP): If the Republican proposals for per capita caps in Medicaid included the same beneficiary “protections” as IPAB creates for Medicare recipients, would he support them? I never received a substantive answer.

Therein lies the problem: Many critics of the Republican Medicaid proposals seem to prioritize political partisanship over policy consistency. Five years ago, CAP made very clear it supports IPAB’s per capita caps on Medicare spending, denouncing a 2012 legislative effort to repeal the board. But earlier this year, the organization denounced as “devastating” Republican proposals for per capita caps on Medicaid. So why exactly does this purportedly non-partisan organization support per capita caps when a Democratic Congress enacts them, but oppose similar caps proposed by a Republican Congress?

It’s Okay, It’s Just Hypocrisy

Democratic senators appearing with disability advocates at events to denounce spending caps for Medicaid fail to recognize that they voted for similar caps in Medicare, which provides health coverage to 9 million Americans with disabilities. Moreover, despite being in place for several years, the Medicare caps have yet to be breached. So how damaging is a policy that hasn’t affected Medicare beneficiaries in the slightest, and which Democratic lawmakers themselves have voted for?

In his Sherlock Holmes story “Silver Blaze,” Doyle wrote of the guard dog that didn’t bark because it was friendly with an intruder. Likewise, many liberal advocates and Democratic lawmakers are quite friendly with per capita entitlement caps, already having imposed such caps for Medicare. Particularly given the non-factor of such caps in the Medicare program in recent years, they should perhaps “bark” less in opposing similar caps in Medicaid. Both beneficiaries and taxpayers deserve better than opportunistic—and politically inconsistent—scaremongering.

This post was originally published at The Federalist.