Federally Dominated Healthcare: The Political Class’s Cash Cow

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Despite the warnings in 2018 that federal healthcare spending was both unsustainable and in large part responsible for the yearly deficit, there are NO pending Congressional bills addressing this issue.  Federal healthcare expenditures without significant reform by 2028 would be $2.9 trillion, 9.7% of projected GDP. By 2040 federal healthcare spending would be almost 40% of non-interest federal outlays and expenditures will drive the national debt to greater than 120% of GDP (Ref.1).  However, because of continued excessive Congressional spending, the debt as of the end of 2021 was 137.2% of GDP, making the case for healthcare reform even more acute (Ref.2).
     One thought from progressives is to expand present government programs to become the sole payer for all care, proposing that with proper price controls, costs would be contained. But our government has made several attempts to control costs over the decades and they ALL have been dismal failures.  The price fixed physician payment system, the Resource Based Relative Value Scale (RBRVS) with its AMA secret Relative Value Update Committee (RUC), was introduced in 1992, destroying any market pricing of physician services (Ref.3).  The 1997 unenforceable Sustainable Growth Rate (SGR) was replaced by the Medicare Access and Chip Reauthorization Act (MACRA-2015), a vain attempt using obtuse algorithms to compensate physicians based on quality (Ref.4,5).  The HITECH Act of 2009, supposed to cut costs by eliminating unnecessary tests, instead has added billions of expenses while a major factor for physician burnout (Ref.6). The federal takeover of student loans was supposed to help pay for the Affordable Care Act but has become a national colossal debt disaster (Ref.7).
     Large federal programs entice those in the industry to lobby Congress/Executive to optimize their income at the expense of the public. It is not a surprise that the largest lobbying effort for decades has been the healthcare industry, in essence a cash cow for the political class (Ref.8).
    Federal control of the largest industry in the country involving trillions of dollars makes corruption inevitable; money corrupts, as noted by George Washington in his letter to General Howe (Ref.9).  As documented by Peter Schweizer, many of our most adamant progressives despite their public utterances, enriched themselves and families by working with corporations they frequently condemn, using their influence for special arrangements and clever diversion of campaign funds. (Ref.10).
    We can provide care for ALL Americans at an affordable cost. The answer is to empower the individual, beginning with voluntary choices.  For those employed shift their employer pretax health benefit to the employee’s health account. They would pay cash for most care and buy nationally available true catastrophic insurance for high priced items for which the employee would pay a small fraction, thereby shopping for value.
    Medicaid and Chip recipients could also direct their own care with a direct deposit from federal/state funds into a similar health account. This would be akin to the Indiana plan that was extremely successful with considerable cost savings but stopped on the federal level by those wanting full government control (Ref.11).
    Because of the evolving ratio of fewer workers to the elderly, increased longevity, and newer more expensive medical advances, to save Medicare workers need the option of having their payroll deductions deposited into a retirement health account safely invested to grow over time. As part of this reform for present Medicare recipients create an option of federal actuarially determined health account deposits minus bureaucracy costs. Spending one’s own money for most care and similar catastrophic insurance would drastically change the entire industry.
    Unfortunately, at this time there is minimum chance our career politicians will give up their healthcare cash and pursue the necessary reforms. However, with our huge national debt requiring borrowing at increased interest rates due to inflation, future federal spending will need to be curtailed. These proposals will then be far more attractive.

  1. Chairmen, Mitch Daniels, Leon Panetta, Tim Penny, American Health Care: Health Spending and the Federal Budget, Committee For A Responsible Federal Budget, May 16, 2018, available at: https://www.crfb.org/sites/default/files/managed/media-documents2022-02/Health%20Care%20and%20the%20Federal%20Budget.pdf  
  2. Office of Management and Budget, The White House, United States Gross Federal Debt to GDP, Trading Economics, available at: https://tradingeconomics.com/united-states/government-debt-to-gdp?embed (accessed July 27, 2022)
  3. Tyler DeVries, RBRVS Overview, MDManagementGroup, April 30, 2019, available at: https://mdmanagementgroup.com/rbrvs-overview/ (accessed July 28, 2022)
  4. Conor Ryan, Explaining the Medicare Sustainable Growth Rate, American Action Forum, March 26,2015, available at: https://www.americanactionforum.org/insight/explaining-the-medicare-sustainable-growth-rate/ (accessed July 28, 2022)
  5. John Lynn, Two Medical Practices’ Reaction to MACRA Ruining Healthcare, Health IT Today, January 31, 2018, available at: https://www.healthcareittoday.com/2018/01/31/two-medical-practices-reactions-to-macra-ruining-healthcare/ (accessed July 28, 2022)
  6. Marion Mass and Kenneth A. Fisher, Why Your Doctor’s Computer is So Clunky, WSJ, March 20, 2018, available at: https://www.wsj.com/articles/why-your-doctors-computer-is-so-clunky-1521585062 (accessed March 21, 2018
  7. Peter H. Schuck, Five Reasons Why Student Loans Are a Looming Disaster, Minding the Campus: Reforming Our Universities, September 13, 2018, available at: https://www.mindingthecampus.org/2018/09/13/five-reasons-students-loans-are-an-enormous-disaster/(accessed July 27, 2022) 
  8. Jake Frankenfield with fact checking by Suzanne Kvilhang, Which Industry Spends the Most on Lobbying, Investopedia, June 2, 2022, available at: https://www.investopedia.com/investing/which-industry-spends-most-lobbying-antm-so/#:~:text=Companies%20and%20industries%20in%20the%20Unite (accessed July 24, 2022)
  9. Letter from George Washington to Major General Howe, Founders Online, August 17, 1779, available at: https://founders.archives.gov/documents/washington/03-22-02-0139 (accessed August 1, 2022)
  10. Schweizer, Profiles In Corruption: Abuse of Power by America’s Progressive Elite, Harper Collins Publishers, New York, New York, 2020, IBSN 978-0-06-289790-9, available at all book outlets11.Avik Roy, Obama Administration Denies Waver for Indiana’s Popular Medicaid Program, Forbes, November
  11. 2011, available at: http://bit.ly/2t4vNUH (accessed November 14, 2011)

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