Consumer Corner: Healthcare reform rhetoric heating up as SCOTUS decision, election near

By MARCELLA S. KREITER, United Press International  |  June 10, 2012 at 4:30 AM
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As the U.S. presidential campaign heats up, so is the rhetoric surrounding healthcare and President Obama's Affordable Care Act.

The U.S. Supreme Court will rule before adjourning for the summer on whether the law, or at least part of it, is unconstitutional. In the meantime, right-leaning organizations are ramping up arguments against the individual mandate, which requires everyone who can afford to do so to buy coverage, and other aspects that require employers to provide coverage. And Republican lawmakers still are vowing to repeal the entire package.

Last week, The Wall Street Journal obtained copies of e-mails written by presumed GOP presidential nominee Mitt Romney while he was governor of Massachusetts supporting a mandate for Massachusetts residents -- something he says was OK for a state to enact but not OK for the federal government to impose.

The issue is costs and how to hold them down.

Two polls released last week indicate Americans are opposed to healthcare reform.

An ORC International poll commissioned by CNN found 51 percent of Americans opposed to the ACA, with 43 percent supporting it while a New York Times/CBS poll found 70 percent opposed to the individual mandate.

Dr. G. Keith Smith, founder of Surgery Center of Oklahoma, says it probably won't matter whether the high court overturns the law, saying supporters of it may already achieved their main objective: getting doctors and hospitals to adopt government-approved electronic medical record systems.

"Hospitals favored the costly EMR requirement," Smith said in a statement promoting his article in the summer issue of the Journal of American Physicians and Surgeons. "The additional overhead cost makes physicians more vulnerable to hospital takeover offers. And once physicians become employees, the EMR provides the hospital the tool it needs for remotely controlling their practices.

"Central planners get most of what they need with the EMR, as they will be able to identify high-cost patients. Overturning just the individual mandate would not affect the 'death panel' or rationing feature, as the enforcement tool -- the EMR -- would remain."

Smith also predicted the medical loss-ratio provision will drive small insurers and small hospitals out of business.

Healthcare spending began to spiral in the mid-1960s with the enactment of Medicare and Medicaid and further escalated with the 1973 passage of the HMO Act, which shifted costs from the individual to the pool of those covered.

"Between 1999 and 2011, health insurance premiums increased 168 percent while workers' total earnings increased only 50 percent," Dr. Andrew Foy said in a news release. "Government spending on healthcare increased 240 percent while [the gross domestic product] increased only 62 percent. Since 1970, government spending on healthcare increased by 5,400 percent."

The bill comes to $21,000 per household, with nearly 20 percent of U.S. households unable to cover it.

"This level of spending vastly exceeds tax revenues and depends on borrowing. When the easy credit runs out, it cannot be sustained," said Foy, who has an article in the same issue of the Journal.

Then there's a Heritage Foundation report citing Medicare Part D to argue that competition is the way to keep healthcare costs down, not expansion of coverage to the 48 million uninsured U.S. residents.

The report attacks what it calls the "micromanagement" of the healthcare system and notes the difference between the cost-projections for the program and actual spending.

The Institute for Healthcare Informatics reported for 2009-10 Medicare drug spending increased by just 2.4 percent, or $7 billion.

Medicare Parts A and B have grown by 4.9 percent since 2006 while Part D has grown by 2.8 percent. The Heritage report chalks up that difference to competition.

There are about 1,100 Part D plans, with an average annual enrollment in the past six years of 7.1 million. The result, the report says, is a "flat price trend" for pharmaceuticals.

"People substitute their brand-name prescriptions with generics in order to save money," the report said. Proof, the report said, that consumers go for value.

The report also concludes consumers rarely switch plans because they are satisfied with the coverage they're getting.

"In healthcare, competition allows individual behavior to drive down costs and constrains spending without top-down mandates that ultimately limit choice and freedom," the report said. "A fundamental shift toward reform that focuses on consumer choice and market competition … is good not only for the federal budget, but also for the individual who desires to secure the best value for his or her healthcare dollars."

Heritage analyst Drew Gonshorowski said despite the overall results some Part D participants have seen their costs increase by a greater percentage.

"It is true that costs still went up and some enrollees [who] have reasons for staying on brand name drugs will experience higher prices than in previous years," Gonshorowski said in an e-mail exchange. "However, if we look at the numbers, it is undeniable that generic substitution suppresses cost growth in Medicare.

"Both sides of the Medicare debate agree that this is the case. From 2006 to 2010 [the] generic share in the Medicare Part D market has risen from 60 percent to 75 percent. If large volumes of people are shifting from brand name drugs to drugs that have lower prices, this will reduce the growth in cost. Additionally, when prescriptions are written for drugs available in both generic and brand [name], 90 percent of enrollees choose the generic.

"Luckily for most people on Medicare, they will not have to experience the frustration of having to stay on higher cost brand drugs when generic options do exist."

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