True costs of Obamacare 

Much of the focus on Obamacare has rightly been on its fiscal recklessness.  But in a New York Times story —the type of story the Times couldn’t seem to find space for prior to Obamacare’s passage — we see a clear glimpse of the kind of care that Obamacare would likely spawn.

With the nomination brewing of Dr. Donald Berwick — a gushing admirer of the British National Health Service — to head Medicare and Medicaid and with Americans already clamoring for repeal in ever-greater numbers, the story, although tardy, is an important one.  It highlights the very real dangers of having millions of the decisions made by doctors and patients across America replaced by the decisions of government administrators in Washington — who rely on studies they don’t understand and pick studies to rely on that aren’t worth understanding.

In this case, the relied-upon study was completed by Dartmouth researchers, who were thrust into the national limelight by an administration searching to find an angle, any angle, to try to sell its unpopular overhaul.  As the Times writes, “The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested.  Cuts, if not made carefully, could cost lives.”

The Times piece largely stands on its own, and it provides a disturbing account of how much damage powerful government officials could do to people’s lives if they are allowed to impose their decisions nationally, especially when those decisions aren’t rooted — as they almost always wouldn’t be adequately rooted — in legitimate empirical evidence in, as President Obama likes to say, “what works.”  Centralizing this much power in the hands of the few would prove fatal not only to liberty but to the quality of American medicine.

The Times writes:

In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.

Wasteful spending — perhaps $700 billion a year — “does nothing to improve patient health but subjects you and me to tests and procedures that aren’t necessary and are potentially harmful,” the president’s budget director, Peter Orszag, wrote in a blog post characteristic of the administration’s argument.

Mr. Orszag even displayed maps produced by Dartmouth researchers that appeared to show where the waste in the system could be found. Beige meant hospitals and regions that offered good, efficient care; chocolate meant bad and inefficient….

However, the Times writes, “Measures of the quality of care are not part of the formula.”

The Times adds, “For all anyone knows, patients could be dying in far greater numbers in hospitals in the beige regions than hospitals in the brown ones, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better.”

For example, there are “big city hospitals like those at the Ronald Reagan UCLA Medical Center and NYU Langone Medical Center — which look profligate by Dartmouth’s measure but may rank much higher by other quality indicators.”

As the Times shows, the authors of the study seem to conflate higher-quality care and wasteful spending, failing to distinguish between the two — if not in their study itself, then at least in the rhetoric they have chosen in publicly describing it.  The Times writes:

“We show where the waste is in medicine,” said Dr. Elliott Fisher, a physician who is one of the principal authors of the Dartmouth work and was a frequent visitor to Washington during the long legislative debate. “If everyone could operate like Oregon, Seattle or the Upper Midwest, there’s huge savings.”

But the atlas’s hospital rankings do not take into account care that prolongs or improves lives. If one hospital spends a lot on five patients and manages to keep four of them alive, while another spends less on each but all five die, the hospital that saved patients could rank lower because Dartmouth compares only costs before death.

“It may be that some places that are spending more are actually getting better results,” said Dr. Harlan M. Krumholz, a professor of medicine and health policy expert at Yale.

Failing to receive credit for better care enrages some hospital administrators. But for the Dartmouth researchers, making these administrators uncomfortable is the point of the rankings.

Nevertheless, despite these concerns, the research has its supporters.  As the Times observes, “Dr. Donald Berwick, nominated by President Obama to run Medicare, called it the most important research of its kind in the last quarter-century. In March, in response to the Congressional Democrats who would have otherwise withheld their support for the health legislation, the administration made a promise. It said it would ask the Institute of Medicine, a nongovernment advisory group, to consider ways of putting the Dartmouth findings into action by setting payment rates that would punish inefficient hospitals and reward efficient ones.”

The Times reports that the Dartmouth researchers posted the following, commonsense-defying passage on their website:  “‘The evidence is that higher utilization does not extend life expectancy, and might be correlated with shorter life expectancy, compared with lower utilization. Therefore, sending people with chronic diseases to higher-efficiency, lower-utilization hospitals for their care could result in both lower spending and increased quality and length of life.’”  In other words, providing high-quality, low-cost care turns out to be remarkable easy.

However, as the Times replies, “[T]here is little evidence to support the widely held view, shaped by the Dartmouth researchers, that the nation’s best hospitals tend to be among the least expensive.

Furthermore, “Similar problems arise with Dartmouth’s regional data. In Dartmouth’s rankings, for instance, New Jersey comes in dead last because its costs per Medicare beneficiary are the nation’s highest. And yet, for the quality of care offered in New Jersey, independent of cost, federal health officials rank New Jersey second only to Vermont.”  There is a big difference between being ranked #2 and #50.

In short, the president’s claims that Obamacare would lower costs have been widely debunked, even from the Medicare chief actuary in President Obama’s own administration.  Now his inferences that by lowering costs (which Obamacare wouldn’t do), Obamacare would also increase the quality of care, have similarly been debunked — although one marvels at the insular environment in Washington that allowed them to take hold in the first place.  And yet, in Dr. Berwick, President Obama has found a true believer who’s not likely to be persuaded by the Times report.  (President Obama is also a true believer — but in the government-expanding ends he’s trying to achieve, not in the reasons he gives for supporting them.)

Let the Berwick nomination proceedings begin, and let the push for repeal advance.

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