The New New Thing* In Government Run Health Care

By Paul Pender MD

Published on Linked-In May 15, 2018

See the speech given by HHS Secretary Azar to the World Health Conference in Washington, DC recently. As the American Academy of Ophthalmology puts it, the Feds are doubling down on value-based payment. Paying for outcomes, not just for sickness and procedures. Really? The focus on price transparency for hospitals is the start. Providers will next be targeted if not already. The cost of interoperability will be passed along to physicians and other providers in the requirement for upgraded Electronic Health Records. However, providers’ fees are fixed under the federal plans for Medicare and Medicaid, leading to increased practice costs.

I agree with Dr. Azar that patients should have access to their medical records in a form that they can actually use, not a portal that may omit some of the pertinent items, such as scanned reports that become attachments. There is a push by the federal government for greater competition among service providers and third-party payers. However, market forces are doing just the opposite. Witness the consolidation within the payor market as insurance companies team up with pharmacy benefit managers to reduce internal costs and to control lists of “approved” drugs. Such mergers will stifle innovation, since new drugs are forced into the highest priced tier in the formulary. On a daily basis, practicing physicians encounter resistance by patients to increased co-pays for the most expensive drugs.

Dr. Azar’s speech did not address entitlement reform at its core, namely, the imbalance between the budget for health care payments and the growing numbers of retirees receiving Medicare coverage, not to mention the expanded numbers of Medicaid recipients under the Affordable Care Act. Paul Ryan looked at the health care horizon and made his unsuccessful pitch for reform, then announced his retirement this year as Speaker of the House. His plan for premium support had stalled and now appears dead. No talk of health care vouchers, since the political climate is not amenable to such a discussion. The premature death of the IPAB (Independent Payment Advisory Board) was a welcome consequence of the Bipartisan Budget Act of 2018, but who will decide how resources are best used?

*after the book by Michael Lewis