Killed by cost-cutting – Pacific Research Institute

Killed by cost-cutting

British officials confirmed this month that as many as 1,200 people died needlessly at a government-run hospital in Stafford, a city in western England.

According to the government’s official report, Britain’s National Health Service was so fixated on “protecting ministers from political criticism” that it resorted to denying patients critical care as “nurses and doctors were put under pressure by managers to ensure official [cost-cutting] targets were achieved, even when that meant patients were put at risk – leading to the deaths.”

Think these kinds of health care horror stories can’t happen here in the United States? Think again. Several aspects of the Affordable Care Act bear a striking resemblance to the very National Health Service programs that have rationed health care – and led to so many unnecessary deaths.

In Britain, a government agency, the National Institute for Health and Clinical Excellence, conducts “comparative-effectiveness” research, which attempts to determine the relative effectiveness of treatments for particular conditions by pitting them against one another.

This research is not unbiased. It can only generate results for the average patient, and thus ignores the reality that different treatments may have different effects upon different people.

NICE also routinely uses cost as a factor when deciding whether a treatment is effective. So it’s constantly making judgments about whether a particular therapy is worth the extra expense – even if it works better than an alternative.

This past December, for instance, NICE declined to pay for a proven ovarian-cancer drug it deemed too expensive.

And if a drug can clear NICE, there’s no guarantee that patients will have access to it. A recent report by Britain’s Health and Social Care Information Center found that basic treatments for everything from arthritis to cancer were routinely denied – even after they were approved by NICE.

It appears that the British system’s primary concern is cutting costs – patient welfare be damned.

This barbaric system has some high-profile admirers – including some of Obamacare’s champions. For instance, Donald Berwick, administrator of the Centers for Medicare and Medicaid Services during the president’s first term, has supported bringing NICE’s rationing to the United States, saying, “NICE is extremely effective and conscientious.”

Obamacare puts in place many of the building blocks of the British health care system. For instance, the United States is about to institute its own version of NICE – the federally chartered Patient-Centered Outcomes Research Institute.

PCORI will underwrite government-sponsored comparative-effectiveness research. The agency’s supporters claim that it will simply provide doctors with information about which treatments work best.

Indeed, PCORI says that it “will ensure that its research is construed as mandates for practice guidelines or coverage recommendations.” The health care economist Jason Shafrin has described PCORI as “like the UK’s NICE but without any teeth.”

But if PCORI seems toothless now, that will quickly change as costs increase. Obamacare explicitly states that these supposed limits should “not be construed as preventing the Secretary from using evidence or findings from such comparative clinical effectiveness research in determining coverage, reimbursement or incentive program.”

Once PCORI starts issuing recommendations – and the agency just recently handed out $40 million in tax money for CER – Obamacare’s Independent Payment Advisory Board might well act on them.

IPAB is comprised of 15 unelected bureaucrats charged with reining in Medicare spending if it exceeds GDP growth plus 0.5 percent. IPAB’s recommendations automatically become law unless Congress comes up with equivalent spending reductions elsewhere.

Even though the board is supposed to start work in late April, none of the 15 has been appointed yet.

Supporters of IPAB point out that the board is forbidden from reducing benefits or raising fees. But IPAB can create payment incentives that will determine the behavior of health care providers.

In other words, IPAB may not be able to prohibit doctors from prescribing certain treatments – but it can ensure that they lose money when they do.

That’s rationing by another name.

Fortunately, the House of Representatives recently approved a “rules package” stipulating that it won’t follow Obamacare’s orders to expedite IPAB’s Medicare cuts through Congress. This is a good start for eventual repeal of the Affordable Care Act – undermining its most disastrous parts before they do any real damage.

But unless Congress does more to stop Obamacare, rationing – with all of its deadly consequences – is inevitable.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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