The Real ObamaCare Fraud

by | Mar 29, 2010 | Healthcare

These government-mandated “quality” and “cost effectiveness” measures will thus place doctors in a position where they are punished for upholding their Hippocratic Oath to treat patients according to their best ability and rewarded for violating it.
In the final days before the climactic ObamaCare vote in Congress, one hotly disputed issue was the reliability of the Congressional Budget Office’s projection that the health plan would cost “only” $940 billion over 10 years. Critics charged that this figure was artificially low because it included a projected 21% cut in Medicare payments to physicians that Congress would later restore as a separate $247 billion “doc fix.” In essence, ObamaCare critics charged that supporters were engaged in fraudulent accounting.

The critics are right. In the short term, politicians are unlikely to leave the draconian 21% Medicare cuts in place, because it would force many physicians to treat Medicare patients at a loss. Many doctors would drop their Medicare patients (or at least refuse to accept new ones), creating an outcry from the senior citizens’ lobby. The projected cuts have already been postponed multiple times. Originally scheduled to take effect on January 1, 2010, Congress first postponed them until March 1, 2010, then until April 1, 2010, then again until October 2010.

However, such postponements won’t solve the long-term problem of rising Medicare costs. Hence, under ObamaCare the federal government also plans on cutting Medicare spending through measures that don’t overtly force doctors to lose money. Although these measures will be portrayed as steps to improve “quality” and “cost effectiveness,” they will in fact have the opposite effects of reducing quality of care and leading to de facto rationing. These constitute the real fraud of ObamaCare.

One planned cost-cutting measure will be a new system of “bundled payments” where hospitals and physicians receive a fixed fee to take care of Medicare patients’ conditions (e.g., a stroke or a heart attack) regardless of how much the care actually costs. Proponents claim this will reward efficient care and reduce unnecessary tests and procedures. Pilot programs are already underway in some cities, and the ObamaCare legislation would expand these programs to the national level in 2013.

But as Dr. Larry Martinelli (past chairman of the Clinical Care Committee of the Infectious Disease Society of America) warns, bundled payments “would pressure hospitals to try to save money by bringing on fewer specialists to consult on patients.” In other words, this proposed Medicare “reform” would reward doctors and hospitals for denying care to their patients.

Dr. Milton Wolf warns of other methods that ObamaCare would use to cut Medicare costs:

If your doctor is in the top 10 percent of primary care physicians who refer patients to specialists most frequently — no matter how valid the reasons — he will face a 5 percent penalty on all their Medicare reimbursements for the entire year. This scheme is specifically designed to deny you the chance to see a specialist. Each year, the insidious nature of that arbitrary 10 percent rule will make things even worse as 100 percent of doctors try to stay off that list. Many doctors will try to avoid the sickest patients, and others will simply refuse to accept Medicare.

ObamaCare also includes incentives to “encourage” doctors and hospitals to join together to form “accountable care organizations” (or ACOs) which would receive those bundled payments. The hospitals and doctors would then decide amongst themselves exactly how they wished to divide that fixed sum. The size of the allotments would of course be determined not by market forces but by government task forces using “quality metrics” and “cost effectiveness” analysis to determine how much spending was “appropriate.” And as political pressures to contain Medicare costs continued to increase, the size of the bundled payments deemed “appropriate” by the bureaucrats would almost certainly go down each year, rather than up.

The overall effect of these policies will be a vicious “race to the bottom,” as doctors are rewarded for avoiding the sickest Medicare patients and/or doing as little as possible for them.

Nor will this problem be confined to Medicare patients. As Betsy McCaughey notes, this will inevitably spill over onto patients with private insurance:

[ObamaCare] makes you enroll in a plan and then says that only doctors who do what the government dictates can be paid by your plan. “Qualified plans” can contract only with a doctor who “implements such mechanisms to improve health-care quality as the [current or future] secretary [of Health and Human Services] may by regulation require”(Sec. 1311, p. 148-49). That covers all of medicine, from heart care to child birth, stents to mammograms.

So if the federal government decides to “bend the cost curve” by requiring private insurers to adopt similar “bundled payment” schemes (as has already been proposed at the state level in Massachusetts), then this could affect all Americans.

Unlike the proposed 21% Medicare cuts, these long-term government “fixes” won’t explicitly force doctors to work at a loss. Instead, they will force doctors to choose between practicing according to their best conscience (and thus losing money for their “accountable care organizations”) or cutting medical corners to stay in the black.

These government-mandated “quality” and “cost effectiveness” measures will thus place doctors in a position where they are punished for upholding their Hippocratic Oath to treat patients according to their best ability and rewarded for violating it. If your doctor hears a suspicious heart murmur on a routine physical exam that warrants a cardiology referral, do you want him to hesitate — or even worse ignore it — because he fears being punished for sending too many patients to specialists?

Congress committed one fraud by failing to include the $247 billion “doctor fix” in its ObamaCare budget estimates. Congress committed another fraud when it passed a plan that it claimed would promote “quality” and “cost effectiveness” but will instead restrict and ration medical care for hundreds of millions of Americans.

Twenty years from now, which will we call the greater fraud?

This article originally appeared at PajamasMedia and is appearing on Capitalism Magazine with PJM’s permission. You can read the original article here.

Paul S. Hsieh, MD, is a physician in practice in the south Denver metro region and he is a founding member of the Colorado group "Freedom and Individual Rights in Medicine" (

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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