We are often told by the advocates of government-run health care that a single-payer system would be innocuous because our masters inside the beltway would not actually own hospitals or employ clinicians. Well, the WSJ Health Blog demonstrates the vacuity of that assertion by explaining the latest P4P proposal from the single-payer system known as Medicare:
â€œPay for performance,â€? one of the great health-care buzzwords of the moment, is often described as paying hospitals more if they take better care of patients. In a 104-page proposal unveiled today, Medicare offers a twist: Pay hospitals less if they arenâ€™t among the top performers.
The problem with this bureaucratic stroke of genius is that Medicareâ€™s current payment scheme only pays 95% of costs (thatâ€™s costs, not charges). So, how much further below costs are they planning to go?
Medicare would withhold 2% to 5% of hospitalsâ€™ reimbursement funds â€” with some payments excluded â€” and use it to create a big incentive pool. The incentive money then would be parceled out to two groups of hospitals: those that score the highest on a set of quality indicators, and those that show the most improvement.
Here’s news flash. A hospital cannot stay open if it is paid less money for its services than it costs to provide those services. In 1980, before Medicare began implementing its variousÂ price control schemes, there were 7,000 hospitals in the U.S. Now, there areÂ fewer than 5,000. Many rural areas have no hospital at all.
The primary effect of government price controls, which is what we are dealing with here, is shortages. Unfortunately, our masters in Washington have never absorbed this blindingly obvious fact. Thus, they will continue to produceÂ schemes like this latest P4P boondoggle, and the inevitable result will be widespread shortages of primary care and hospital services.
And don’t forget: Medicare doesn’t own any hospitals or employ any physicians. Yet its bureaucratsÂ are using the power of the purse to do serious damage to the health delivery system. How can anyone with an IQ exceeding single-digits think this situation will improve if we give these clowns the whole system?