Mike Kueber's Blog

June 21, 2012

Repeal and replace ObamaCare?

Filed under: Medical — Mike Kueber @ 7:23 pm
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Ever since ObamaCare was enacted into law, the Republican mantra has been “repeal and replace,” with the emphasis on repeal.  This emphasis on “repeal” is understandable because everyone knows that it is easier to tear something down than it is to build something up. 

An article by Texas senator Kay Bailey Hutchison in today’s San Antonio Express-News continues the Republican Party’s untoward tendency toward demagoguery (rationing, death panels).  In the article, Hutchison asserts that the medical profession will be irreparably damaged by ObamaCare because a government bureaucracy will soon interject itself between doctors and patients.  As evidence of this evil, Hutchison cites a recent recommendation by a government panel to exclude PSA screening from a group of medical services that an insurance company must pay for without charge (no deductible, co-pay, etc.).

Hutchison’s point is wrong on at least two levels.  The first is she implies that PSA screening will no longer be covered.  That is wrong.  The PSA will remain covered; it is simply not included in the basket of preventive services that ObamaCare requires insurance companies to pay for without charge.  If ObamaCare is repealed, as Hutchison wants, the PSA and other preventative services will be covered just like any other medical service – i.e., subject to co-pay and deductibles.

The second and more important mistake with Hutchison’s argument is her premise that a government bureaucracy or insurance company should not get between the doctors and patients.  That suggests that the patients should have a blank check to incur any medical services and expenses that they and their doctors agree on.  Well, such a philosophy is a major reason that medical insurance has become unaffordable.  Doctors and patients should be allowed to do whatever they want on their own nickel, but when they ask the federal government or an insurance company to pay for a medical service, that service needs to be reasonable and necessary based on objective evidence, not the subjective determinations of the doctors and patients, without any consideration of costs and benefits.  You can’t do a cost-benefit analysis if your costs are zero.

Hutchison closed her column by providing some interesting statistics:

  • A recent survey of 5,000 physicians found that 60 percent believe the healthcare legislation will have a negative impact on overall patient care.
  • More than half believe that increased bureaucracy is reducing the personal interaction that is essential to building better understanding of patients’ needs.
  • One statistic stuck with me as I spoke to those graduates: nine out of 10 would not recommend the healthcare profession to a family member.

 Yes, we can expect physicians to believe that patient care will be negatively impacted if the government and insurance companies stop giving them and their patients a series of blank checks; and that increased bureaucracy is reducing the time that they have to interact with patients.  What else would you expect them to say?

I am struck, however, by the statistic that 90% of the new doctors would not recommend the healthcare profession to a family member.  My second son is a newly commissioned M.D., and he shared that burnt-out feeling a couple of years ago while in the later stages of medical school, while wistfully thinking of the other things he could be doing.  However, I spoke to him last week, after nearly a year of residency, and he enjoyed his work so much that he said he would almost do it for nothing.

So regarding Hutchison’s use of statistics, I think of Mark Twain’s sage comment, “There are lies, damned lies, and statistics.”  I wish Hutchison would use her waning days in public office to educate instead of fueling the fire.

June 4, 2011

Room for Debate – What Medicare services to cut immediately?

Filed under: Medical — Mike Kueber @ 3:59 pm
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The New York Times has a weekly column titled, “Room for Debate,” in which ten subject-matter experts debate an issue by providing a succinct explanation of their position.  This week’s column asks the experts to identify those Medicare services that should be cut immediately.

Politicians would never answer a question like this because they know that specific answers get them in trouble.  Instead, they insist on talking in
generalities.  Among their favorite stock answers is to “eliminate waste and fraud.”

Of course, some would argue that Medicare doesn’t need to cut services if other efficiencies can be obtained.  In fact, some conservatives would demagogue this issue by saying that cutting services is rationing and puts us on a slippery slope to death panels.

I agree that Medicare reform will need to focus on finding efficiencies, but there is much benefit to be gained by cutting some
services, and this column is an excellent starting point for the discussion.  It suggests cutting the following:

  1. Aggressive therapies.  Stop paying for CPR, dialysis and other aggressive therapies when patients have no chance for cure or recovering
  2. PSA tests.  Medicare should stop paying for prostate cancer screening in men over the age of 75.
  3. Three ideas from one expert – (1) Aricept, the Exelon Patch and other drugs for Alzheimer’s disease that doctors agree have limited, if any, utility for the patient and are essentially placebos for family members; (2) Joint replacements for people with advanced Alzheimer’s disease who are too cognitively impaired to participate in physical therapy and thus will never walk again after the surgery; and (3) Mammograms, pap smears, colonoscopies and other cancer screenings when —– and only when —- nobody has even bothered to ask the
    patient whether they would treat cancer if it were found. Some would, thus lengthening their lives. Others, depending on age, philosophy and what else ails them, would decline.
  4. Dual eligibles.  These are the nearly nine million people, representing one in five Medicare beneficiaries, who are eligible for services
    through both Medicare and Medicaid.  They are stuck in a crevice between Medicare and Medicaid where no one is overseeing their total care, leading to gaps, duplication and poor outcomes.  Providing them with truly integrated care could significantly improve their lives and also help reduce health costs by providing timely, appropriate managed treatment.
  5. “Medically necessary” care.  Medicare’s payment standard is not patient-centered. One guiding principle is: “Is this service or procedure “medically necessary”? Medically necessary is a murky and malleable term, and too often patients, those most directly affected, do not get to choose what medically necessary means.  Saying “no” to nonbeneficial care is only part of the answer. Medicare beneficiaries and their families have the right to honest, objective, compassionate information to help them make difficult choices, especially at the end of life.
  6. Outsourcing the evaluation of treatments to Britain.  Because Americans are cost-control wimps, Medicare should stop paying for treatments that the British Medical Journal says probably don’t work.  Today, United States agencies that try to not pay for ineffective treatments face the wrath of Congress, egged on by the surgeons and drug companies whose revenue is threatened. So far, U.S. agencies have pretty much always backed down, and just paid for everything.  The British control costs in part by having the will to empower a hard-nosed agency, the National Institute for Health and Clinical Excellence, to study treatments and declare some ineffective. Some hope the United States will create a similar agency, but I fear it would be hopelessly politicized and declawed.
  7. Rely on hospices instead of I.C.U.  Medicare should stop paying for futile end-of-life care provided in intensive care units (I.C.U.s). In other words, hospital care for the terminally ill that has no curative potential and is solely life-prolonging should not be covered.
  8. Comparative Effectiveness Research.  There is no requirement that a new therapy be proven better than its predecessor.  Comparative Effectiveness Research was funded in the recovery bill of 2009. As projects are funded and evidence accumulates, consideration should be given to whether equally or less effective treatments should be covered by Medicare when there is a significant
    disparity in cost.
  9. Reducing overhead.  Eliminating unneeded overhead, like Medicare Advantage, would save Medicare nearly $100 billion annually.  [This expert’s response sounded suspiciously like “waste and fraud.”  If I were grading these responses, I would sent it back and ask him to focus on medical services that could be cut.]
  10. Oncologists.  Many cancer patients spend their last days undergoing treatments that both oncologists and hospitals know will give them a
    few extra weeks, at best a couple of months.  Too many hospitals let oncologists decide whether a palliative care team can see someone he views as “my patient.” Why?  Hospitals are afraid of their “rainmakers” (physicians who bring in well-insured patients). So the oncologist is allowed to block the consult, while ordering more chemo. Over half the profits in oncology flow from drug sales.

April 27, 2011

Comparative-effectiveness research and healthcare rationing

A few days ago I blogged about the Independent Payment Advisory Board (IPAB), which was created by ObamaCare to reduce the rate of growth in the cost of Medicare.  Although IPAP is intended to recommend changes to Medicare reimbursement rates and is specifically prohibited from making any recommendation to ration health care, Republicans and some Democrats are actively attempting to terminate the Board because they believe that draconian cuts to reimbursement rates would be equivalent to rationing. 

Rationing is currently a dirty word in Washington.  Any program that arguably leads to healthcare rationing is at risk.  Although Republicans are loathe to admit it, RyanCare is a variation of rationing because its Medicare vouchers will not be adequate to buy today’s full-coverage Medicare.  We can fully expect partisan Democrats to demagogue this issue as much as Republicans do.  Let’s hope this bipartisan demagoguery fails to damage the invaluable comparative-effectiveness research (CER) contained in ObamaCare.

CER has been defined as the generation and synthesis of evidence that compares the benefits and harms of alternative methods to prevent, diagnose, or treat a clinical condition or to improve the delivery of care. CER attempts to measure the relative effectiveness of treatment, whereas standard research focuses on efficacy (whether the treatment works or not). 

An expert in the field of CER who has studied geographic variation in healthcare that patients in the U.S. receive – a phenomenon called practice-pattern variation – has concluded that if unwarranted variation were eliminated, the quality of care would increase and healthcare savings up to 30% would be possible.

Another study has revealed that patients in the highest-spending regions of the country receive 60 percent more health services than those in the lowest-spending regions, yet this additional care is not associated with improved outcomes.

Council for Comparative-Effectiveness Research

President Obama is a big supporter of CER, and he took advantage of the American Recovery and Reinvestment Act of 2009 (the Stimulus Act) to set aside $1.1 billion for CER and to create a Council for CER to coordinate the research across the federal government.  In the development of the law, there was disagreement over whether CER could be used to limit (rationing?) healthcare options, and ultimately, the law provided that CER should only be used to increase the quality of treatment, not to limit options.  That doesn’t make any sense – why should government pay for treatment that is relatively ineffective? 

Because of the explicit prohibition on rationing and the fast-moving nature of the Stimulus Act, the $1.1 billion for CER stayed under the radar.  That changed, however, when President Obama made further changes to CER under the Patient Protection and Affordable Care Act of 2010 (so-called ObamaCare).  When Sarah Palin and her cohorts demagogued ObamaCare for rationing and death panels, they never identified the provisions in the law that prompted this concern.  Subsequent commentators, however, have focused on the Patient-Centered Outcomes Research Institute (PCORI), which replaced the Council for Comparative Effectiveness Research.

Patient-Centered Outcomes Research Institute (PCORI)

Section 6301 of ObamaCare provides, “The Secretary may […..] use evidence and findings from research conducted […..] by the Patient-Centered Outcomes Research Institute.”  According to Republican senator Kyl, “That means the government, not patients and doctors, has the power to make health care decisions that affect you. A bureaucrat decides if your health care is an effective use of government resources.”

ObamaCare also says the following about comparative-effectiveness research:

  • Defines comparative clinical effectiveness research as “research evaluating and comparing health outcomes and the clinical effectiveness, risks, and benefits of 2 or more medical treatments, services, and items.”
  • Establishes that the purpose of the Institute is “to assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence concerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed through research and evidence synthesis that considers variations in patient subpopulations, and the dissemination of research findings with respect to the relative health outcomes, clinical effectiveness, and appropriateness of the medical treatments, services, and items.”
  • Provides that the Institute “shall identify national priorities for research, taking into account factors of disease incidence, prevalence, and burden in the United States (with emphasis on chronic conditions), gaps in evidence in terms of clinical outcomes, practice variations and health disparities in terms of delivery and outcomes of care, the potential for new evidence to improve patient health, well-being, and the quality of care, the effect on national expenditures associated with a health care treatment, strategy, or health conditions, as well as patient needs, outcomes, and preferences, the relevance to patients and clinicians in making informed health decisions, and priorities in the National Strategy for quality care established under section 399H of the Public Health Service Act that are consistent with this section.”
  • Instructs that the Office of Communication and Knowledge Transfer, “in consultation with the National Institutes of Health, shall broadly disseminate the research findings that are published by the Patient Centered Outcomes Research Institute … and other government-funded research relevant to comparative clinical effectiveness research…. The Office shall provide for the dissemination of the Institute’s research findings and government-funded research relevant to comparative clinical effectiveness research to physicians, health care providers, patients, vendors of health information technology focused on clinical decision support, appropriate professional associations, and Federal and private health plans….   Shall not be construed as mandates, guidelines, or recommendations for payment, coverage, or treatment.”

Section 1182 of the Act explicitly limits the Secretary’s use of comparative-effectiveness research:

  • “The Secretary may only use evidence and findings from research conducted under section 1181 to make a determination regarding coverage under title XVIII if such use is through an iterative and transparent process which includes public comment and considers the effect on subpopulations.”  (This provision was quoted above out of context by the Republican Senator Kyl.)
  • Nothing in section 1181 shall be construed as (1) superceding or modifying the coverage of items or services under title XVIII that the Secretary determines are reasonable and necessary under section 1862(l)(1); or (2) authorizing the Secretary to deny coverage of items or services under such title solely on the basis of comparative clinical effectiveness research.”
  • The Secretary shall not use evidence or findings from comparative clinical effectiveness research conducted under section 1181 in determining coverage, reimbursement, or incentive programs under title XVIII in a manner that treats extending the life of an elderly, disabled, or terminally ill individual as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill.”
  • “Paragraph (1) shall not be construed as preventing the Secretary from using evidence or findings from such comparative clinical effectiveness research in determining coverage, reimbursement, or incentive programs under title XVIII based upon a comparison of the difference in the effectiveness of alternative treatments in extending an individual’s life due to the individual’s age, disability, or terminal illness.”
  • The Secretary shall not use evidence or findings from comparative clinical effectiveness research conducted under section 1181 in determining coverage, reimbursement, or incentive programs under title XVIII in a manner that precludes, or with the intent to discourage, an individual from choosing a health care treatment based on how the individual values the tradeoff between extending the length of their life and the risk of disability.

Thus, the language appears to give the Secretary authority to rely on research from the Patient- Centered Outcomes Research Institute to assist in making coverage decisions.  But the Institute’s research focuses on the relative effectiveness of various treatment options, not on rationing coverage based on a cost-benefit analysis.  Thus, the 85-year-old guy appears able to get his knee replaced. 

Deficit hawks have complained that the Council for CER in the Stimulus Act had greater promise for slowing the growth of healthcare spending and that its replacement PCORI is currently precluded from examining the most important component of CER – i.e., cost-effectiveness.


Cost-effectiveness analysis considers the comparative effectiveness and costs of different treatments. The goal is to provide evidence of which treatments provide the most health benefit per dollar of expenditure. Deficit hawks argue that the expanded use of cost-effectiveness analysis is desirable and inevitable to limit growth in U.S. medical costs.  Incorporating costs into the analysis of comparative effectiveness can help focus resources on treatments and interventions that provide greater value for the money. But conducting and using formal cost-effectiveness analysis in treatment and insurance coverage decisions is highly controversial. Cost-effectiveness analysis raises the prospect of formal rationing of medical care because it costs too much.

The concept of cost-effectiveness is central in the economics of healthcare.  Although cost-effectiveness for Medicare is currently hugely controversial, it is already being applied by the Veterans Administration and, thought the states, in Medicaid.   Big-government types believe that cost assessments and judgments of benefits in relation to costs should be left to patients and physicians, but deficit hawks like me believe that a centralized government system for comparing cost-effectiveness is an essential part of CER.  American government has limited resources, and it needs to decide how much to spend on healthcare and how to most effectively spend it.

April 22, 2011

Krugman, IPAB, and doctors

Yesterday I blogged about health-care rationing, price-controls, and IPAB.  Today NY Times columnist Paul Krugman wrote about the same subject.    Not surprisingly, we have a different perspective.   What did surprise me was that instead of charging that opponents of IPAB are engaging in scare tactics by referring to rationing, Krugman seems to concede that IPAB is about rationing:

  • “Before you start yelling about ‘rationing’ and ‘death panels,’ bear in mind that we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money. And the last time I looked at it, the Declaration of Independence didn’t declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness. And the point is that choices must be made; one way or another, government spending on health care must be limited.”

I agree with Krugman that the government is entitled deny treatment that is too costly, but that is rationing .  I am confused, however, by Krugman’s insistence that the “almost sacred” doctor-patient relationship is somehow greater than a vendor-consumer relationship, while at the same time Krugman acknowledges that we can’t afford “the blank-check approach”:

  • “We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.”

Later in his column, Krugman returns to characterizing doctors as having higher standards than the average professional and being heroic.  I think Krugman is guilty of depicting doctors according to whatever furthers his political arguments.  That’s like mixing metaphors when he does it in the same column.

April 21, 2011

Health-care rationing, price controls, and IPAB

This morning, I visited my orthopedic doctor to receive the first of five weekly injections of hyalgan that are intended to improve my arthritic knee.  I’ve tried glucosamine chondroitin, but the functioning of my knee continues to deteriorate. 

After receiving the injection, I stopped at HEB to buy some groceries and noticed an 80-year-old guy slowly walking to the store.  Although I feel slight discomfort in my arthritic knee when I walk, I can still move at a normal pace and thus walked by the old guy like he was standing still. 

The old guy reminded me of the limited functionality that will be afflicting me in a few years.  My conservative 62-year-old friend Kevin has an arthritic knee a little worse than mine, and he is considering a knee replacement.  His doctor has warned him, though, to make the decision in the next couple years while he still has USAA’s health insurance for retirees because his ability to have the surgery done under Medicare after he become 65-years old is not assured.

I thought Kevin’s doctor might be “crying wolf,” but an article in the NY Times yesterday reported that the Obama administration is attempting the expand the power of the 15-member Independent Payment Advisory Board (IPAB), which was created by ObamaCare to reduce the rate of growth in the cost of Medicare. 

IPAB replaces the current Medicare Payment Advisory Commission (MedPAC), which makes recommendations (often regarding reimbursement rates) that Congress is free to accept, but usually ignores.  By contrast, IPAB recommendations will automatically become effective unless Congress overrules the recommendations. 

Currently, IPAB is specifically prohibited from making any recommendation to ration health care, and although President Obama didn’t mention what additional powers he wanted for IPAB, Republicans and some Democrats have decided not only against expanding the powers of IPAB, but in favor of eliminating IPAB.  They claim that IPAB “would usurp Congressional spending power over one of the government’s most important and expensive social programs.”

GOP budget guru Paul Ryan led the way by demagoguing the issue, calling it “a rationing board” and declaring that the board would “impose more price controls and more limitations on providers, which will end up cutting services to seniors.”  Texas Senator John Cornyn more accurately said the president’s proposal “punts difficult decisions on health spending to an unelected, unaccountable board of bureaucrats.”

But the Republicans are not acting alone.  Three prominent Democrats have weighed-in:

  • Representative Allyson Y. Schwartz, a Pennsylvania Democrat prominent on health care issues, said: “It’s our constitutional duty, as members of Congress, to take responsibility for Medicare and not turn decisions over to a board. Abdicating this responsibility, whether to insurance companies or to an unelected commission, undermines our ability to represent our constituents, including seniors and the disabled.”
  • Representative Pete Stark, a California Democrat on the Way & Means Subcommittee on Health, said: “Why have legislators?” He suggested that expanding the power of the board could be as bad as giving vouchers to Medicare beneficiaries to buy private insurance. “In theory at least, you could set the vouchers at an adequate level.  But, in its effort to limit the growth of Medicare spending, the board is likely to set inadequate payment rates for health care providers, which could endanger patient care.”
  • Nevada Representative Shelley Berkley said she wanted to repeal the Medicare board. “I have great faith that this administration can put together a strong, independent and knowledgeable board,”  but she said she had less confidence in future administrations.

Despite Paul Ryan’s protestations about rationing, the main concern, as noted by Representative Stark,  is that the Board will reduce the reimbursement rates to medical providers to unacceptable levels.  Although that would not be rationing, it would be a typical liberal response that does nothing to solve the underlying problem of risings costs.  Price controls don’t work.

The other concern, as articulated by Senator Cornyn, is that IPAB implies that, because our elected officials are incapable of making tough decisions, Americans are better served by having those decisions made by an unelected bureaucracy appointed by the president.  That may be President Obama’s vision of a new and improved America, but it isn’t mine.  To paraphrase Wm. F. Buckley, I would would rather be governed by the first 500 names in the San Antonio phone book than by 500 wise men selected by Barack Obama.

February 20, 2011

Medical tourism and managed medical care

Earlier this week, a local TV news program (KENS 5) did a story on medical tourism.    The story focused on an uninsured 60-year-old man who needed hip-replacement surgery.  Because the cost of surgery in Texas was $70,000, the man decided to have the surgery done in India for less than $10,000, which included the cost of transportation.   Patient Mike Sakalauskas of Buda, TX is back home and doing fine.

Yesterday there was a related article in the San Antonio Express News (borrowed from the NYTimes).  According to the article, new research shows that “too many women with abnormal mammograms or other breast problems are undergoing surgical biopsies when they should be having needle biopsies, which are safer, less invasive and cheaper.”  The article goes on to suggest that greed may be driving the practice because, not only are needle biopsies half as expensive, but they are performed by a radiologist instead of a surgeon.  Thus the surgeons earn nothing when they make the correct referral to a radiologist.

A couple of months ago, I had a similar experience with my dermatologist.  After noticing a discoloration on my shiny dome of a head, I visited my dermatologist to check for sun cancer.  In the past, my internist Marnie Ross took care of such an inspection, and she routinely froze several spots every year.  But Marnie retired, even though she was only 40-years-old, because, she said, insurance companies had made her practice not financially rewarding.  I suspect that her husband’s medical practice and their two small kids might have played a role, too.  Regardless, Marnie was gone from my life and my new internist, Kevin Horton, preferred to avoid doing the work of dermatologists.  So I have started seeing a dermatologist annually. 

You may have read that dermatology is one of the most lucrative branches of medicine, and that is surprising to me.  The work of a dermatologist appears uncomplicated and the working conditions seem relatively favorable.  Of course, the principle of supply and demand sometimes leads to distortions in the marketplace and that appears to be happening here.

My recent trip to my dermatologist revealed two reasons that dermatology could be so lucrative.  The first reason is that I didn’t see the dermatologist, but instead saw a physician’s assistant.  This concept of leveraging less skilled employees has been applied by lawyers for decades.  Senior lawyers who billed by the hour couldn’t make enough money ($1 million a year) even though they increased their hourly rate to amounts ($500 an hour) that made clients gag.  Their solution was to hire several junior lawyers at $50 an hour and supervise their work that was billed to clients at $200 an hour.  Voila – senior lawyers could make $1 million a year.

Doctors have caught on.  Physicians’ assistants do the same work and charge the same price, yet they are paid only a fraction of what the doctor makes.  My dermatologist’s physicians’ assistant inspected my sun spots, and instead of freezing them, she decided to take a couple of biopsies.  After determining that one of them was basil-cell carcinoma, she scheduled me to come back to have it cut out. I asked why they cut instead of freeze and was told that cutting is a doctor’s decision.  That was a little confusing since I hadn’t seen the doctor.

A week later, I saw the dermatologist, who cut out the sun spot.  A couple of weeks after the surgery, I returned to have half the stitches removed by the physician’s assistant, and a few days later the remaining stitches were removed.  And finally, in early March I will return to the dermatologist for a final inspection.  In sum, the sun spot that my previous internist would have frozen during my annual physical was treated with two visits to the dermatologist and three to the physician’s assistant; one surgery and two biopsies. 

Although I don’t know what this treatment cost, it is probably a good example why medical care in America can consume one-seventh of our GDP.  Physicians have too many conflicts of interest to be in exclusive charge of managing our medical care.  The insurance companies need to be more involved so that care can be effectively and efficiently managed.

May 27, 2010

Sloganeering – health-care rationing and death panels

 Political discussion in America often fails to get beyond slogans, such as:

  • The Arizona immigration law requires racial profiling vs. the law prohibits racial profiling;
  • Drill, baby, drill vs. protect the environment;
  • Stop spending our children’s money vs. let’s invest in our future; and
  • Pathway to citizenship vs. no amnesty.

Although slogans have always been a part of America’s political history (“Tippecanoe and Tyler, too”), you would think the 24-hour news outlets would have the time go beyond the slogans.  But they don’t.  Instead the outlets go back and forth ad nauseam about which slogan is better, and this discussion polarizes us instead of moving us toward common ground.  Common ground should be the objective, and it can be found in most issues outside of abortion.

As you would expect, there was a lot of sloganeering with ObamaCare.  Conservatives took the offensive and initially charged that ObamaCare would lead to socialized medicine.  But instead of staying focused on that fundamental issue, the discussion got muddled by Sarah Palin’s charge of rationing and death panels, and this charge was quickly adopted by most opponents to ObamaCare.  Unfortunately, the charges and counter-charges never led to an in-depth consideration of an important issue – health-care rationing.

Part of the problem is that rationing is an ambiguous term.  For most Americans, rationing means the government distribution of scarce resources at reasonable prices, and, as confirmed capitalists, we don’t usually don’t like that unless we are in the middle of World War II.  But that is not the sort of rationing that may be applied to health care.  (In fact, my major criticism of ObamaCare is that it takes only baby steps towards addressing cost issues and so-called rationing.  The primary objective of ObamaCare is to make coverage affordable for all Americans, and my only objection to that is that the individual mandate is unAmerican).

One of the most damning facts about American healthcare is that it consumes about 17% of our gross domestic product, whereas in most other countries the percentage is about 9-10%.  This indicates the free-market for health care in America isn’t working. 

The problem is that government and insurance companies have fouled-up the supply & demand pricing system.  The free-market pricing system doesn’t work when doctors and patients determine the treatment and the government and insurance companies pay the bill.  But that is exactly what the demagogues demand – i.e., “no one should come between you and your doctor.”  I agree that nothing should come between you and your doctor, but don’t expect the government or your insurance company to pay for everything that you and your doctor do.  There are limits on what your government and your insurance company can afford. 

For an excellent discussion of rationing and the out-of-control medical costs, please see the following NYT article –   http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html.  The article makes a compelling case for removing the disconnect between the consumer and the purchaser of medical services, but we will need to be vigilant to ensure that the government doesn’t try to replace the free market in medicine.