Regulating the Elderly--The (re)creation of a two-tier healthcare system. Or is it a three-tier system?

The Houston Chronicle headline from May 17 tells a tale: "Texas doctors opting out of Medicare at alarming rate."   As reporter Todd Ackerman explains:


Texas doctors are opting out of Medicare at alarming rates, frustrated by reimbursement cuts they say make participation in government-funded care of seniors unaffordable.

Two years after a survey found nearly half of Texas doctors weren't taking some new Medicare patients, new data shows 100 to 200 a year are now ending all involvement with the program. Before 2007, the number of doctors opting out averaged less than a handful a year.

"This new data shows the Medicare system is beginning to implode," said Dr. Susan Bailey, president of the Texas Medical Association. "If Congress doesn't fix Medicare soon, there'll be more and more doctors dropping out and Congress' promise to provide medical care to seniors will be broken."

More than 300 doctors have dropped the program in the last two years, including 50 in the first three months of 2010, according to data compiled by the Houston Chronicle. Texas Medical Association officials, who conducted the 2008 survey, said the numbers far exceeded their assumptions.

The largest number of doctors opting out comes from primary care, a field already short of practitioners nationally and especially in Texas. Psychiatrists also make up a large share of the pie, causing one Texas leader to say, "God forbid that a senior has dementia."


There it is, the Big A--Alzheimer's.   As noted here many times at SMS, it doesn't really matter what sort of health insurance system we have, if we all, or many of us, end up with Alzheimer's Disease (AD).   We personally will come to a grim end, and so, too, will our economy, burdened down by runaway entitlement spending.    


But the issue is larger, even, than AD.  The Chronicle's Ackerman concludes:

The growth in Texas Medicare opt-outs began in earnest in 2007, when 70 doctors notified Trailblazer Health Enterprises, the state's Medicare carrier, they would no longer participate, up from seven in 2006. The numbers jumped to 151 in 2008, fell back to 135 in 2009 and are on pace for 200 in 2010. From 1998 to 2002, by contrast, no more than three a year opted out.  

Now, according to a Texas Medical Association new poll, more than four in 10 doctors are considering the move.


And of course, the same basic story could be written everywhere across the country: Doctors are fleeing Medicare. 


So we have come to an interesting historical fork in the road: For decades we were told, by advocates of national health insurance--now known as Obamacare--that "Healthcare is a right, not a privilege."  The liberal-left dream was equality and solidarity, that we would all be in one big egalitarian system.  Conservatives and libertarians fought back against that idea for just as long, but they lost, finally, in 2010.  So now, are we all in "one big system"?  Of course not--no more than Beverly Hills is the same as South LA.   We always knew that there would be exceptions and loopholes in healthcare, too, by which the rich would buy their way out of any system, and its strictures. As Barack Obama himself said on ABC News last summer, he would never let any healthcare system restrict the choices that he made for himself or his family. 


But what about the healthcare of the ordinary American?  What happens to him or her, especially as they grow old?   Well, if what's happening in Texas is any indication, senior citizens will face an increasingly spartan healthcare future.  Could it be that this is what the government has had in mind all along?   Is that too cynical an interpretation of the ultimate course of government programs--regimentation and restriction?


By this reckoning, government "compassion" comes at a price--the price being the limit on what's possible.   You get a floor, but you also get a ceiling.  If you want the Post Office to deliver your mail, fine.  Just accept that your mail will be delivered as the Post Office sees fit.   And now the same with healthcare.    You wanted healthcare?  You got it!  You have a card that says "healthcare card"!  Now leave us alone, the government seems to be saying.   Now that we're done with healthcare, our leaders seem to be saying, the feds can get back to bailing out banks, fighting foreign wars, and whatever else the governing class chooses to truly worry about.


There's something a bit familiar in this scenario.

Back in college, I had to read Frances Fox Piven and Richard A. Cloward's Regulating the Poor, a book that has had enormous influence on public policy over the last 40 years--first published in 1971, it's still in print.   Piven and Cloward wrote from a left-wing perspective, cheering on groups such as the National Welfare Rights Organization, which demanded welfare payments, no questions asked, and got a sympathetic hearing from the likes of then-New York City Mayor John Lindsay.   The result was that  Piven and Cloward provided intellectual "air cover" for the vast--and disastrous--expansion of welfare in the 70s and 80s, and the growth of a whole new kind of underclass poverty and dysfunction.   Which is to say, it's easy, and proper, now to dismiss the Piven/Cloward argument that welfare is a good thing because it liberates people from government control.   We soon learned what happens when you give people money for doing nothing--proletarian class consciousness is not among the results.  But there's a grain of truth to the argument that governments across history have seen social spending as an opportunity to put people in their place--and keep them there.


Consider what the Obama administration is doing now, three months after the enactment of the bill.  Confronted with weak poll numbers, the White House has summoned into being a $125 million ad campaign, according to Politico, to spin Obamacare.   Indeed, just today, Obama himself was out spinning it.   Is Obamacare a good program?  Does Obama have the executive skills to effectively run national healthcare??  Those are not permissible questions.


But in addition, trying to stay on the right side of the Zeitgeistial wind, the Administration is now talking up spending cuts.    Nobody thinks that Obama is actually going to reduce spending, or anything close, but he'll have to reduce something, or at least its rate of growth.  And so now we can see where the future heads--toward a bare-bones approach to healthcare.  Yes, of course, you are covered, but don't get much for your coverage, because the country can't afford it.   (And of course, if Uncle Sam gets careless, or chooses to stomp out existing niche categories of private healthcare coverage, well, that's just a cost of the government doing business, its way.)   And yet the big enchilada, spending-wise, is Medicare, so expect more of the sorts of doctor-dearth stories that the Houston Chronicle reported on, above.


So we see an illustration of the old saying, "the more things change, the more they stay the same."   That is, we had a two-tier system before, some people covered, some not.    Now, after the passage of Obamacare, we still have a two-tier system, but the tiers have changed: the first tier is those who have good-quality care, which they pay for out of their own pocket, or out of the pocket of plush private plans.   And the second tier is those who rely on the government for their care, including Medicaid recipients, and also, of course, senior citizens who rely on Medicare.    The plan--not written down, but obvious nonetheless--is to spend what it takes on the first tier, and then scrimp down on the second tier.


So yes, Obamacare is expensive.  But if you believe, as I do, that relative status, i.e. power, is a more important factor to most people--certainly most people in politics--than absolute well-being, then what really matters is the perpetuation of the tiers.   And Obamacare has delivered on that objective.  Those in the upper tier know that they are special, and they can feel good about themselves, if they choose to, for having done a good deed for the poor--they can check off another box on the "social justice" column of their moral resume.   And know that if they need to--say, around re-election time--they can always throw some more money down on the folks in the second tier.  (Maybe a lot of money, if the second-tier gets organized--if, for example, AARP wakes up.)


But actually, there aren't two tiers, there are three.  The third tier is illegals, not covered, at least not officially, by the Obamacare bill.


As it happens, Houston has an energetic civic and business community, and the hub of that civic/business spirit is the Greater Houston Partnership, (GHP) which produced a major report on healthcare in the 10-county Greater Houston area in February.   The report noted, for example, that at present, as much as a third of the 5.7 million people who live in those 10 counties do not have health insurance.   Therefore, the report continued, if the Obamacare bill excludes illegals--the legislation was signed into a law a month after the report was issued--then between 13-15 percent of the population of Greater Houston would not be covered.  Those folks, numbering three-quarter-of-a-million, will still have health needs, of course, and so they would end up in emergency rooms, and wherever else they can  get care.    As Houstonian Jim Woodhill observes, "We have universal care, we just don't have universal coverage."   The working poor might not have insurance, but they still get treatment, one way or another.   It's a lousy system, of course, rife with ripoffs and other unintended consequences of uncompensated care, but it's not going away.


The result, though, is that "the safety net will fail," as the GHP report explains:

The lack of access to care, stemming from the uninsured problem, results in a poor health status for Texas and the Houston region’s residents.  . . . If the situation is left at status quo and the Houston region’s hospitals and community health care organizations are stretched to meet future demand at current capacity, the safety net will fail. This failure will not only affect the people who will be left untreated, but will also diminish the competitive advantages the Houston region holds over other metropolitan areas – a good business climate, low taxes, and a large, low-wage labor force – ultimately weakening the quality of life for Houston area residents.

Yes, the current system will collapse if present trends continue.  Hospital ERs will be overwhelmed, doctors will turn away Medicare (and Medicaid) patients.  And, of course, if there's a major public-health emergency of some kind, well, watch out.


Eventually, there will be some sort of resolution of this three-tier system.  Most likely, we will close the border with a fence and with Arizona-type legal action, and then, once acute concerns about the border and homeland security are resolved, the chronic reality that there are 12 million or so Americans living illegally inside this country will demand some sort of resolution.   Most likely, the third-tier people will slide, one way or another, into the second tier.


And the business community will be supportive:  It's a businesslike trade: Everyone gets coverage, and so that "social justice" issue is put to rest.  But of course, we won't spend that much on the tier two class, especially when times are tough.   As the GHP puts it:


Any effective federal health reform must address lowering costs, improving quality and increasing access to appropriate health services for uninsured and underinsured individuals through innovative, cost-effective approaches to purchase health insurance.


One can't criticize the GHP for its position.   No city, or metro region, can solve a national crisis.


But at the same time, Houston, blessed with abundant medical and research facilities, could spearhead the solution.  One fine day, we will see that curing diseases, starting with AD, is a better medical plan than treating those diseases. Baumol's Law guarantees that chronic care will be expensive, but a cure, well, that's cheap--everybody can afford it.  Oops.  Maybe I shouldn't have said that, because maybe the point, all along, has been to preserve a tiered system, under one name or another.