Monday, May 2, 2011

The Coming Decline in U.S. Life Expectancy

Obamacare will ultimately result in less healthcare and a decline in U.S. life expectancy. Government control of any sector of an economy means distortions in service, a decline in quality, shortages and a disincentive for creative people to enter the sector. Healthcare is no different. With only initial stages of Obamacare kicking in, the deterioration in the sector is becoming evident.

NyPo's Michael Tanner reports:
The doctor is not in.

The United States already faces a growing physician shortage. As our population ages, we require more and more intensive health care. At the same time, enrollment in medical schools has been essentially flat, meaning we are not producing new physicians at anywhere near the rate we need to. In fact, according to the American Association of Medical Colleges, we face a shortfall of more than 150,000 doctors over the next 15 years.

And it could get a whole lot worse.

The health reform bill signed into law last year is expected to significantly increase the number of Americans with health insurance or participating in the Medicaid program. Meanwhile, an aging population will increase participation in Medicare. This means a greater demand for physician services.

But at the same, the bill may drive physicians out of practice.

Existing government programs already reimburse physicians at rates that are often less than the actual cost of treating a patient. Estimates suggest that on average physicians are reimbursed at roughly 78% of costs under Medicare, and just 70% of costs under Medicaid...

As a result, more and more physicians are choosing to opt-out of the system altogether. Roughly 13% of physicians will not accept Medicare patients today. Another 17% limit the number of Medicare patients they will see, a figure that rises to 31% among primary care physicians. The story is even worse in Medicaid, where as many as a third of doctors will not participate in the program...

The government’s own chief actuary says that reimbursement cuts could mean “reductions in access to care and/or the quality of care.” Once the cuts hit hospitals, they too will be in trouble. Medicare’s actuaries estimate that 15% of hospitals could close. Inner-city and rural hospitals would be hardest hit.

Nor is the pressure on reimbursement rates likely to be felt solely in government programs. The health care law contains a number of new regulations that are already driving up insurance premiums. The government is responding by cajoling and threatening insurers. If insurers find their ability to pass on cost increases limited, they too may begin to cut costs by cutting reimbursements...

For a lot of older physicians, retirement in Florida may begin to look like a very good option. Roughly 40% of doctors are age 55 or over. Are they really going to want to stick it out for a few more years if all they have to look forward to is more red tape (both government and insurance company) for less money? Those that remain are increasingly likely to join “concierge practices,” limiting the number of patients they see and refusing both government and private insurance.
I fully expect that at some point doctors will be forced to take on medicare and medicaid patients. At that point those wanting to enter the industry will decline even further.

At the same time private insurers will continue to be squeezed (I'm not sure this wasn't the plan from the start).

Bottom line: Stay healthy.

1 comment:

  1. I predict (seriously) that Tijuana will become a medical mecca being just across the border from SoCal. People have already been crossing the border into Mexico to obtain dental work for years.

    Many Chinese-Americans already take trips to Taiwan for major medical care. Even with the cost of air fare, they come out way ahead on price (I don't know if that's influenced by Taiwanese government-subsidized care).

    I also wouldn't be surprised to see "medical ships" -- sailing in international waters -- pop up within a few years.