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Having Your Cake and Eating It Too

Have you ever wondered how anyone could possibly think that the Patient Protection and Affordable Care Act (PPACA) would lead to less health care spending?

Consider that the act is expected to (a) insure more than half the uninsured, (b) push most people with private insurance into more generous plans and (c) give just about everyone more generous preventive care. Doesn’t more insurance always mean more spending?

A big part of the answer is a little known change in PPACA on its way to final passage. In an obvious effort to keep the bill’s cost under control, lawmakers zeroed out all the funding for new doctors, nurses and other paramedical personnel. It doesn’t matter what extra benefits are promised if there is no one to deliver on the promises! Hence, the CBO’s low-ball spending estimate.

The problem is that groups with a special interest in health care — particularly the elderly and the disabled — noticed this sleight of hand and became alarmed. With a severe doctor shortage in the making, if your plan pays well below market rates you’re at risk of being pushed to the end of the waiting lines. And this has created a political hot potato for the White House.

The Obama administration picked up on this problem quickly. Ever since the passage of PPACA, it has been going to great lengths to assure anyone who would listen that it was leaving no stone unturned in an effort to create more medical providers — with or without the approval of Congress.

But hold on! You can’t both give people tons of extra health care and at the same time claim you’re holding down costs. It’s A or non-A, but not both. If the administration succeeds in creating more doctors, more health care spending is inevitable. My guess is we will be somewhere in between. We’re going to get some more providers; they are going to deliver more care; and spending will go up as a result. But we are not going to increase supply enough to prevent substantial shortages — much worse than we have today.

If government estimates are correct, as many as 34 million uninsured people will acquire health insurance. If economic studies are correct, these 34 million people will try to double their consumption of health care. In addition, another 70 million people or so are likely to acquire health insurance substantially more generous than what they have today. Moreover, most of the remaining 200 million people will be entitled to preventive services without copayments and deductibles they pay today. They are going to expect annual physicals, mammograms, Pap smears, prostate cancer (PSA) tests, colonoscopies and other services they -are not currently getting.

How can this increased demand possibly be satisfied? More than one in five Americans already lives in an under-doctored area. Moreover, a Duke University study implies that if all Americans get all the free preventive care promised them under the Affordable Care Act, family doctors will have to spend all their time on these tasks alone — leaving no time left over for all of the other things doctors do.

In response to this problem, a government Web site claims there will be 16,000 new providers by 2015. Yet Congress has never appropriated the funds to do that.

Apparently, Health and Human Services Secretary Kathleen Sebelius plans to use $250 million targeted for “prevention and public health” in the PPACA to instead train 500 physicians, 600 physician assistants and 600 nurse practitioners. Also, she plans to use an additional $500 million of “stimulus” money available under the American Recovery and Investment Act. Yet even if Congress allows these decisions to go forward, the additional supply will still fall way short of the 16,000 figure (which appears to count students who are already in medical school and will largely replace doctors who are expected to retire).

Meanwhile, the Association of American Medical Colleges predicts a 21,000 primary care physician shortfall by 2015. The Health Resources and Services Administration estimates a short of between 55,000 and 150,000 physicians by 2020 — and that was before health care reform passed! The state of Texas is predicting a nurse shortage of 18,000 by 2015 in that state alone.

John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis.  He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system. Dr. Goodman’s Health Policy Blog is considered among the top conservative health care blogs on the internet where pro-free enterprise, private sector solutions to health care problems are discussed by top health policy experts from all sides of the political spectrum.

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36 replies »

  1. It’s going to be end of mine day, however before end I am reading this impressive piece of writing
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  2. “But what are you for?”
    REPEAL Mess-iah’s mess
    REFORM based on REALITY
    REPAIR
    Of 279 U.S. House members who voted for “health care deform” —
    NONE are using “health care deform” in their campaign materials.
    None. Zero. Nada. Zip.
    Many of those SAPS are NO longer taking calls from the White House. A depression is when you lose your job, good buddies.
    “Heck’a job, OweBama.”
    This is done. Nov. 2, Mess-iah’s mess gets cleaned up. And a lot of deadwood in Congress gets unemployed.

  3. Thanks for your helpful insights js, but really you shouldn’t have wasted your, or our, time with your uninformed, information-free whining. We get it – you’re agin‘ something.
    But what are you for?
    And if you bleat something like “free markets”, I’m gonna give you such a pinch….

  4. JUST BULL
    “At ~ 7:30 ET 9/9, there’s as yet no sign of the new cost report from Medicare’s actuary ..”
    BFD. There are a zillion reports, saying a zillion different things. CBO’s original Medicare estimate is now 800% BIGGER than original. And two years ago, Bwarney Fwrank and Pelosi said Fannie/Freddie was fine.
    No one with a brain believes a word from the Chicago Mob. They’re just trying to keep their losses to below 35 U.S. House seats.
    A cynical view, from a cynical time.

  5. Decided to respond to Peter’s retort from yesterday regarding campaign finance reform and voting third party:
    Well, we saw what happened with campaign finance reform, thanks loads from the loaded Supremes down the street from the Capitol, and I have been voting third party since I “earned” voting rights (by turning 18, but what is a number?), except the one stupid time I voted for Clinton’s first term, as I could not vote for Perot as crazy is as crazy does. But, we all make mistakes, right?
    The issue is incumbency, but, this one party system of Republocrats won’t let you in on that little secret, eh?
    By the way, while quoting a Fox report is not necessarily news, they did report that by 2014 cost will exceed the estimates that drove this legislation off the cliff onto our heads below. But, hey, Medicare was to be cheap. RIGHT!?!?!?!

  6. We have to admit, we were frankly stumped why Dr. Goodman would link to a Health Affairs report from 2003 – one that essentially dismisses his breathless alarm at the cost of providing access to all those uninsured – in his original post. That report concludes that, despite “34 million people [trying] to double their consumption of health care”, the cost would raise US health care’s share of GDP about 1 percentage point.
    But now we get it: Dr. Goodman was probably just trying to get out ahead of a new cost report to be issued today by Medicare’s chief actuary.
    This NYTimes article about the report says it will be published today – 9/9 – at Health Affairs. We’re guessing a Goodman minion was ordered to rustle up a link to “the Health Affairs article on the cost of covering the uninsured”, and dutifully did as they were asked – finding the 2003 report mentioned above.
    At ~ 7:30 ET 9/9, there’s as yet no sign of the new cost report from Medicare’s actuary, either at Health Affairs or the chief actuary’s page at CMS’s website.

  7. ” .. By the way, single-pay is the only system that will rescue this healthcare system from it’s own greed and economic abyss and I’m disappointed you hold those who see this in the same light as the likes of the J.S. crowd ..”
    Sure, pal. And Fannie/Freddie (the “single-payer” of finance) and Bwarney Fwrank did not create the Great Depression II. So, let’s go for Great Depression III, with “single-payer.”
    I’m disappointed in you and your ad-hom attacks. Well, life will go on.
    See you on Nov. 2 at the ballot box.
    P.S.: did you hear? OweBama threw S-P under the bus — in 2007. You have to start reading, something than “The Nation.”

  8. “If not, we’ll at least stop hearing from the “remember in November” crowd and the “we must have single payer” contingent. I can’t wait.”
    I guess Paolo you think the “reasoned” moderate third leg of voters will be enough to save Democrats from themselves? By the way, single-pay is the only system that will rescue this healthcare system from it’s own greed and economic abyss and I’m disappointed you hold those who see this in the same light as the likes of the J.S. crowd.

  9. November 3rd can’t come fast enough. Maybe the GOP will be able to push through some tort reform, defund the death panels, prohibit health benefits for illegals, strip out the public option, undo the government takeover, close down the IRS jails, call this “repeal and replace”, and finally declare victory. And then we’ll all live happily ever after.
    If not, we’ll at least stop hearing from the “remember in November” crowd and the “we must have single payer” contingent. I can’t wait.

  10. A bloody Harvard Law incompetent pushed into a legal cesspool — and now there’s push-back. Boarding on chaos.
    Hope! Change! Incompetence! Chaos!
    NO JOBS!
    Whine all you want — Nov. 2 is the castor oil. Get used to it — or get out. Could care less, about your whine.

  11. Republicans always seem to be Republicans – they’re usually wrong but no taxes, no regulation seems to work every time with voters who have short memories.
    “Entrenched selfish bastards who don’t give a fecal impaction about you and I in the end. Unless, you’re a special interest?”
    Then push and vote for campaign finance reform. It’s always the money. You could also vote Libertarian.

  12. Hmm, Peter, could replace the word Democrat with Republican and the first sentence wouldn’t change at all in meaning.
    Incumbents are cowards and whores, and that is why if you want real change and real representation, vote any and all in office more than 10-15 years OUT on the 2nd of November! Pelosi and Reid are interchangeable for Boehner and McConnell. Entrenched selfish bastards who don’t give a fecal impaction about you and I in the end.
    Unless, you’re a special interest?

  13. “Just read this morning this little tidbit: of the 279 Democrats in the House and Senate who voted to approve Obamination Care, NOT ONE is using their vote in their campaign ads.”
    Democrats are cowards who can’t decide when they should be Democrats and when they should look like Republicans. That’s why many Dems won’t bother to vote this time, it’s hard to tell which Democrat they’re voting for.

  14. So John Goodman writes a post from the right, and Matthew Holt from the left chimes in to say that John in his diabolical conservatism left out — as usual — a major part of the picture. And what is that key factor, that trump card the twicky wabbit conservative hid behind his back to once again scam the audience?
    Drum roll.
    “Waste.”

  15. Just read this morning this little tidbit: of the 279 Democrats in the House and Senate who voted to approve Obamination Care, NOT ONE is using their vote in their campaign ads. A first for me: deeds do match words in DC, in this case, no words for no good deed!!
    Think about it people, if this legislation is so wonderful and effective, why aren’t these bastards crowing about it from the rooftops? Because they know they screwed up, and hope the silence blinds the masses.
    You people who advocate for this garbage legislation should be ashamed of yourself to watch the sheer hypocrisy of the people you claim as representatives.
    And you others who just sit there silently, knowing better to challenge these idiots, enjoy the back seat of this ride.
    Over the cliff!

  16. ” .. Yea, it’s his fault. Short conservative memory ..”
    We on the front lines of medicine are so much smarter than OweBama, it isn’t funny.
    We, who actually deliver medical care (rather than just blather), are telling the world what an UTTER FAILURE Mr. OweBama has been. “Death by a thousand cuts,” indeed.
    Don’t like free people? Gonna put us in “re-education camps?” Guess what, Chuckles — some of us HAVE been in Commie “re-education” camps. We got three words for your kind — N-R-A.
    See you Nov. 2. Prepare for a lot of pain, eh?

  17. ” I assume that the conservative view is that we do not, because somehow these folks are “undeserving”
    Margalit see Matt’s other post about what happens when one assumes.

  18. Excuse me Ezra Klien, er I mean Mr. Holt,
    “giving people HSAs and then an blank check when they hit their deductible–which has been his preferred philosophy for decades,”
    They didn’t exist prior to 2003, that is 7 years ago. A decade is 10 years, decades would be minimum 20 years. Are you claiming John knew about HSAs 13+ years before they existed and they were his preferred philosophy? If that was true why woulnd’t he just have won the lottery 2-3 times and retired if he was that good?
    “transaction based FFS system that he’s such a fan of. That’s what all the buzz about the Medicare innovation center”
    Wasn’t it Medicare that created this current FFS system? Why do you think this new system will work any better then RBRVS, DRG, and all the others Medicare created? Isn’t the one constant and sure thing that Medicare’s new systems wont live up to what they claim?
    “By the way, another little scandal is that our medical school infrastructure spits out far fewer graduates than our medical residency slots demand.”
    Would this have anything to do with Medicare paying them to teach students then next year not to teach them then the year after teach them?
    I seem to remember our Military being understaffed and under equipped, and worse having the wrong equipement in 2001, wonder if that had anything to do with spoending cuts in the 90s……

  19. ” .. We can reduce spending by going after obvious waste ..”
    Matthew, do you understand the USA?
    Al Capone and Chicago? Boss Tweed and Tammney Hall? Things that go together — crime and politics? Why the WSJ produces a weekly laugh-fest, based on the most-recent atrocity by the UK NHS?
    What about the repeat of 60 Minutes’ on Medicare fraud? That saw government “investigators” quitting?
    http://www.cbsnews.com/video/watch/?id=6837797n
    This is not theory, part of a dreamy liberal kumbaya. Real money is being stolen by real politician-thieves.
    Nov. 2, there is going to be a reckoning. It will not be pleasant. It is necessary, given the mess that Mr. OweBama created.

  20. Let them eat cake, and let the scribes have a cake break.
    We now have to pay for scribes because the EHR devices are dangerously flawed:
    http://www.latimes.com/health/la-he-medical-scribes-20100906,0,2694959.story
    “Scribes are doctors’ tech support”
    Harris Meyer, LA Times
    September 6
    The workers, often young pre-med students, enter information into computers as physicians examine patients. Complex electronic medical record systems are mastered, and doctors are able to focus…

  21. “And good ol’ Paolo, who wants doctors to just live in churches …”
    No I don’t. I want doctors to make money and profit like everyone else. You are the one who wants to make the medical industry completely non-profit (but never explained how).

  22. “The problem is that groups with a special interest in health care — particularly the elderly and the disabled”
    Not to mention pharma, AMA, device makers, insurance companies, hospitals and everyone else who doesn’t want the gravy train to end.
    “if your plan pays well below market rates you’re at risk of being pushed to the end of the waiting lines.”
    Isn’t that a conservatives’ dream, a two tiered system where they get care and no one else can. Which is better, having a healthcare line to wait in or not being able to afford care and get a line. Let’s make conservative
    “if all Americans get all the free preventive care promised them under the Affordable Care Act, family doctors will have to spend all their time on these tasks alone — leaving no time left over for all of the other things doctors do.”
    Imagine, docs actually preventing illness. What’s this world coming to.
    “If government estimates are correct, as many as 34 million uninsured people will acquire health insurance. If economic studies are correct, these 34 million people will try to double their consumption of health care. In addition, another 70 million people or so are likely to acquire health insurance substantially more generous than what they have today.”
    He’s right, it was better before healthcare legislation when those millions couldn’t get care.
    Well there’s no shortfall in nursing now and if we recruited docs from the lower economic tier instead of from the upper I bet we’d fill those empty spots. Tell you what, we make rich people stand in line as well and just watch how fast those lines disappear.

  23. It’s a very a pertinent point if these additional expenditures will actually lead to better health and thus lower cost over next ten years.
    However when it is difficult to ascertain we must do what is intuitively correct. Like spilling of oil apparently had little impact and as saint Limbaugh forecasted correctly mother nature took care of it. By that yardstick we could have tens of more oil leak and it would do no harm.
    Autism and 30,000 rare diseases that 7 millions folks have are all result of the combination factors building up over years. Just because we don’t have correct understanding doesn’t mean we need to do what seems intuitively correct but cannot be statistically proved.
    It is intuitively correct to do preventive care. We all make up differnt views of ordinary folks. Please check edelman.com on different health segments based on view. There are 6 different segments and this should help a segment that gets care only when it needs.

  24. Wow, the fall starts on a good note! You gotta love when people, who have their own agendas while they attack those who have different, if not diametrically opposing ones, act so sanctimonious and virtuous that they know better, just let the legislation go unchallenged!!!
    Hey folks, more than half of those who participate in polls say they don’t want this crap enacted, but, who are we, the majority, to have the right to speak out?! And by the way, anon, what is a free lunch? When you go dumpster diving and pull out the scraps all on your own? Someone pays for it, pal, and I guess you keep your wallet firmly strapped on your leg to avoid letting any bills slip free, and what, pay for something!?
    And good ol’ Paolo, who wants doctors to just live in churches and go to the clinics every day and take care of everyone and everything that drags it’s ass through the door, and again, hey, it’s a free lunch.
    Conservatism and liberalism, in their extremist forms, fail equally. When does someone champion for something like, hey, making an effort and working for what is right and earned? Words that don’t get uttered in Washington, DC, People!!!

  25. Once you distill away the talking points, Goodman is basically saying that he doesn’t want the country to spend money covering those currently uninsured.
    This is a logical and legitimate statement to make, especially for a self-described conservative who does not believe in a right to health care. What doesn’t make sense is when he then tries to defend the funding of other entitlement programs such as Medicare.
    A consistent and pure free-market approach to health care would be for the government to return all past premiums paid by seniors, veterans, and federal employees in the form of an annuity (or lump sum), and then let seniors, veterans, and everyone else try to obtain health insurance on their own in the free market.
    Defending the right of one demographic group to have unlimited medical benefits while denying the right of another group to have any basic benefits at all is not conservative. It’s hypocritical.

  26. You are just a right- wing realist that just can’t stand borrowing almost half of government expenditures and trillion dollar deficits. Wise up! This money is all free and the party will never end! Why can’t you right-wingers figure out that sometimes a free lunch is just a free lunch?

  27. Providing health care to millions more people is going to cost money. One can twist, turn and torture the details to death, but it will still cost money. Yes, we may be able to save money somewhere else. It may cover the new expenses, or it may not.
    The only question is whether this is something we want to spend money on? I assume that the conservative view is that we do not, because somehow these folks are “undeserving”, while the liberal view is a resounding yes.
    From this point on, the arguments are nothing but rhetoric.

  28. Preventative care will do absolutely nothing!!! Do you really think people are going to take care of themselves?
    Really?
    Providers (specialists) do not get to charge whatever they want—how i wish.

  29. The elderly and the disabled are not the only ones with a “special interest” in health care. “Everyone” would have a special interest in their health care. Giving everyone “access” to affordable health care is not giving people “tons of extra health care.”
    Giving “eveyone access” to a medical provider and looked at “before” they get sick or serious ill, or keeping them in the pink of health can and does lower health care spending. More health care providers will provide a much less sick nation, and not an “entitlement” to preventive services, much less “free preventive care.”
    The 34 million people are not going to double their “consumption” of health care, if it is not needed, because they are healthier.
    The short-fall of 21,000 primary care physicians before health care reform passed was from allowing all the “specialists” to charge whatever they want and not having health care payers pay PCPs for what they are really worth.
    When I read the part that Goodman’s health policy blog is considered among the top “conservative” health care blogs on the Internet, that explained everthing about his posting. Enough said! What an “ellitous” attitude!
    But thanks Matt, for brightening up the message. Reduce spending by going after frivolous waste of the transaction-based FFS system.

  30. John ignores two obvious facts in his as usual not quite comprehensive analysis
    a) We can reduce spending by going after obvious waste–waste promoted by the transaction based FFS system that he’s such a fan of. That’s what all the buzz about the Medicare innovation center, and the creation of Accountable Care Organizations is about. And it’s right there in the law–even if John ignores that part of it–and it’s way way more likely to succeed in reducing spending than giving people HSAs and then an blank check when they hit their deductible–which has been his preferred philosophy for decades, and which ignores that most health spending happens on relatively few people well after they hit any “deductible” level
    b) Even if none of this stuff works–and it might not–at some point we run out of money and then we will reduce global payments to the health care system. If John thinks that we can’t do this he would do well to look across the boarder to Canada and over the Pacific to Japan both of which cut health spending in actual and real terms in the 1990s–and still covered everyone. Or for that matter look at US defense spending in the early 1990s which underwent substantial real cuts–even if the cuts weren’t big enough and were scandalously reversed and more by the actions of John’s preferred party in the 2000s and even more scandalously haven’t been reduced by my preferred party while in power.
    By the way, another little scandal is that our medical school infrastructure spits out far fewer graduates than our medical residency slots demand. (about 18,000 vs 25,000 if memory serves)
    We fill the gap by stealing doctors predominantly from Third World countries that actually DO have a doctor shortage–unlike our shortage which has been manufactured mostly by propagandists, and exacerbated by criminal lack of control over specialist to generalist ratios and payment.

  31. So if I understand this correctly 1 trillion or say even 40% of it, like 400 billion will be raised by zeroing out fund for new doctors, nurses and paramedics?
    Now this is over decade. So was $40 billion being already spent per year that now it will be zeroed out?
    Nurses are complaining of unemployment, so that shouldn’t really matter.
    Maybe I can help you understand how spending more money equals savings. Spending in time leads to saving on serious expenditures later.
    Preventive examination are most routine and don’t require physicians.
    Still, should physician need arise we know that foreign labor is always there.
    Such simple solution, isn’t it? Is this what was holding back reform for last 50 years?

  32. How to solve the health care professional shortage problem?
    Plug and chug the pre fab order sets sold out of an outfit in LA onto the CPOE machines, transfer labs and medicines and diagnoses into the decision support section, and who needs doctors?
    This equipment will be useful for the inferior and insufficient health care professionals Sebelius will train and will disrupt and distract the experienced and efficient professionals, who, right now, are shaking their heads in disbelief.
    Living in a state characterized by surveillance and scrutiny of professionals is worrisome.

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