Healthcare has things exactly backwards. Normally, when you spend more money, you expect to get more product, service, or value in some form. But in the U.S. healthcare system, Washington keeps spending more (of our money), and we keep getting less ... care.
The latest example is a new set of rules just announced by CMS that govern accountable care organizations and change the metrics and compliance requirements by which they are judged (and funded). The cost of these new regulations is not included in the CMS announcement. It is certain to be substantial, likely in billions, both for the federal government and for providers who must change policies and procedures, fill out new forms, accept constant reviews, and comply...or else.
Along with expense incurred by new rules, CMS announced a cut in reimbursement to physicians. Thus, healthcare will spend more while care providers will get less. Patients will wait longer, have shorter appointment times, and get less care. More people will die needlessly waiting in line for care.
This is not new. In fact, it has been a standard pattern since 1965 when Medicare and Medicaid were passed. It starts with a problem that makes headline news. Retired Americans can’t get employer-sponsored health insurance – leads to Medicare. Twelve-year-old dies “from a toothache” because of lack of care – more stringent Medicaid rules, but reduced reimbursement. “Seniors must choose between health insurance and their medications” – government price fixing.
To “fix” whatever problem makes front page news, Washington passes new legislation or revises current rules adding to the massive regulatory apparatus already in place. This generates more spending on BURRDEN – bureaucracy, unnecessary rules and regulations, directives, enforcement, and noncompliance activities. Between 1970 and 2020, when the number of physicians increased 100 percent, the number of healthcare bureaucrats, nonclinical workers hired to administer BURRDEN, increased more than 4,400 percent! That is forty-four nonclinical workers for every one physician.
Federal regulations and rules produce bureaucratic diversion: healthcare dollars are diverted from patient care to pay for BURRDEN. The end result is death by queue. With insufficient clinical funds, patients wait so long for care, they die while waiting. The Affordable Care Act (ACA) offers an excellent demonstration of “spend more (on bureaucracy), get less (patient care).”
(This author was a founding Director of the New Mexico Health Insurance Exchange which was one of the fifty-one state (and D.C.) exchanges created by the ACA. Thus, he knows details of the ACA from the inside.)
Recall two promises made for the ACA and how they turned out. First, President Obama assured Americans they would “save $2500 on their insurance bill.” Yet instead of spending less, Americans are forced to spend more and more on insurance, from unaffordable to super-duper unaffordable. The second promise was “if you like your doctor or your health plan, you can keep them.” Millions were forced to change physicians or health plans. Increasing numbers of physicians are simply quitting.
ACA promised savings and care promises never materialized. President Obama’s namesake legislation cost taxpayers $1.76 trillion, mostly for bureaucracy and administration. To defray a large portion of that expense, President Obama took $716 billion from the Medicare Trust, money that had been earmarked to pay for senior care. The Medicare Trustees project that the Trust will run out of money, be insolvent, by 2036 at which time Medicare will be unable to pay for seniors’ hospital care. ACA bureaucratic diversion contributed to that impending bankruptcy and loss of promised care.
A third example of “spend more, get less” is the recent Minnesota Medicaid fraud. CMS (Centers for Medicare and Medicaid Services) simply paid bills that were presented to it without confirming that the enrollees were real or that they received the goods and services contracted. The Somali fraudsters simply pocketed the money. Nine billion is the current estimate for how much was embezzled just in Minnesota. Other Medicaid scams are being investigated in California, Florida, Ohio, Maine, and New York.
Without effective watchdog activities and absent strict accountability, Medicaid is expending billions “more” while Americans are getting “less,” in fact, getting nothing.
Third-party payment structure facilitates, even encourages, such “spend more, get less” behaviors. We cannot afford such inefficient healthcare spending: monies expended that do not produce patient care. It is time to consider ways to put patients, not third parties, in control of healthcare spending. After all, it IS their money, and their lives.
It is time for the Empower Patients Initiative.
Deane Waldman, M.D., MBA, is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of the Center for Healthcare Policy at Texas Public Policy Foundation; former Director of the New Mexico Health Insurance Exchange; and author of award-winning, “Become an Empowered Patient.” Follow him on X.com@DrDeaneW or visit website www.empowerpatients.info.
