The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Disturbing News on Medicaid from Oregon

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Citizens Against Government Waste (CAGW) in 2010 objected to the Affordable Care Act’s expansion of Medicaid, a “partnership” between state governments and Washington to provide healthcare to the poor, knowing at the time that the price tag would be prohibitive and it would put the federal and local governments in charge of millions of Americans’ healthcare.  Already Medicaid consumes on average 24 percent of states’ budgets and with the Obamacare expansion, it will devour even more.  Right now there are 25 states plus the District of Columbia that are expanding Medicaid, foolishly accepting the Siren’s call of 100 percent federal funding for 2014 through 2016, eventually decreasing to 90% in 2020 and beyond.  But with a federal debt of $17 trillion and climbing, it is highly questionable that level of federal funding will be maintained into perpetuity.  Eventually it is likely to be reduced, leaving the states to pay a monstrous bill.

Furthermore, Medicaid is a terrible healthcare delivery system.  Many physicians refuse to see Medicaid patients because of the low reimbursement rates; they couldn’t keep their practice open if they did.  In addition, dealing with the Medicaid is a bureaucratic nightmare.

Many big government advocates have unapologetically described Obamacare as a stepping stone to a socialized healthcare system and with the botched roll-out, we could end up there.  Programs like Medicare and Medicaid are single payer systems, American versions of the kind of nationalized health plans typically found in many countries.  It is a world where health decisions are not made by the patient and doctor, but by government bureaucrats and politicians.  With Medicaid expansion and massive regulatory bureaucracy that came with the Affordable Care Act, the nation is now on that path.

In light of that, there was disturbing news coming out of Oregon late last year.  Peter Pitts, a former associate commissioner at the Food and Drug Administration, wrote about an update that Oregon’s Health Evidence Review Commission made for the state’s Medicaid program:

These new guidelines require that Medicaid deny coverage for certain cancer treatments for patients that have been deemed “too” sick, haven’t responded well to previous treatments, or can’t care for themselves.

Through these new rules, Oregon state bureaucrats are severely restricting access to care and dooming potentially thousands of local patients to a premature death.

What’s worse is that these new Medicaid guidelines are not grounded in the medical literature or best clinical practices, according to Kenneth Thorpe, chairman of the Partnership to Fight Chronic Disease. Rather, according to Thorpe, they’re based “on the odds of survival observed in a group of patients.”

As Pitts points out, “It’s true that for some late-stage cancer patients, the odds are long that any additional treatment can help.  But without access to the latest that medical science has to offer, a patient’s survival rate simply drops to zero.”

The guidelines now state that patients deemed “too sick” by Medicaid officials would be provided with only palliative care.  In other words, all they would get are painkillers and drugs for nausea, acupuncture treatments, wheelchairs, and the like while they die.

According to Pitts, about 19,000 Oregonians are diagnosed with cancer each year and over 640,000 state residents are covered by Medicaid, about one in five of the total state population.  However, with Medicaid expansion, that number will grow.  Oregon’s on-line exchange has been inoperable since October, forcing the state to do manual enrollments for private insurance.  News reports show about 150,000 people have signed up for Medicaid.

The idea of denying healthcare to the very ill or elderly is nothing new.  The Examiner.com points out how Dr. Ezekiel Emanuel, who was the president’s top healthcare advisor in the Office of Management and Budget, advocated denying care to the elderly and disabled.

Here’s an excerpt from his 2009 Lancet paper:
Allocation of very scarce medical interventions such as organs and vaccines is a persistent ethical challenge. We evaluate eight simple allocation principles that can be classified into four categories: treating people equally, favouring the worst-off, maximising total benefits, and promoting and rewarding social usefulness. No single principle is sufficient to incorporate all morally relevant considerations and therefore individual principles must be combined into multi-principle allocation systems. We evaluate three systems: the United Network for Organ Sharing points systems, quality-adjusted life-years, and disability-adjusted life-years. We recommend an alternative system—the complete lives system—which prioritises younger people who have not yet lived a complete life, and also incorporates prognosis, save the most lives, lottery, and instrumental value principles
Oregon’s Medicaid decisions are not the only area of concern when it comes to government bureaucrats and politicians making decisions about the kind of care patients will receive.  The Affordable Care Act, in Sections 3403 and 10320, established the Independent Payment Advisory Board (IPAB).  Starting in 2014, this presidentially appointed, 15-member board will have power to make decisions on how to reduce Medicare spending if it should rise above a targeted growth rate, not an improbability considering the rate that baby boomers are retiring.  To do this, the board will decide how much providers will be paid within Medicare.  In the past, the power to make changes to Medicare’s payment rates required Congress to act.  But IPAB now has the authority to make changes and Congress can only stop their decision by either coming up with another plan that cuts the same amount or overrule the board through a super majority vote.

While the law specifically states the board cannot “ration” care that is a distinction without a difference; if a physician must reduce the number of Medicare patients he or she treat because of reduced rates, seniors by default will have their care rationed.

But Medicare patients aren’t the only ones that should worry.  Starting in 2015, IPAB will submit recommendations every other year to reduce the growth in national health spending.

IPAB will likely end up operating like the British National Health Service’s National Institute for Health and Care Excellence, or NICE.  While NICE provides a lot of happy talk on its website stating their mission is to support “healthcare professionals and others to make sure that the care they provide is of the best possible quality and offers the best value for money” what they do a lot is ration care by limiting access to treatments.

According to an October 10, 2012 article in Forbes Magazine by physician Scott Atlas, “under NICE, treatments are routinely refused on the grounds of limited resources and the need to make decisions based not on individual’s or family’s choice, but on the government’s assessment of the benefit.”

As Pitts notes, “Oregon’s new Medicaid guidelines take treatment decisions out of the hands of doctors and patients and put them in the hands of distance state bureaucrat willing to cut costs no matter the human toll.  It’s the practice of cost-centric controls over patient-centric care.”

But in Ezekiel Emanuel’s world, Oregon’s Health Evidence Review Commission, NICE, and other similar boards, rationing care is a good thing.

As the nation deals with the Obamacare train wreck, many who look first to the government for solutions are already calling for a single-payer system to replace the president’s signature landmark law.  Oregon’s experience should remind everyone that a government-run system is a dangerous path on which to venture.

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