Supporters of HealthSoviet RI

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At the last count of the RI Center for Freedom & Prosperity, Rhode Island leads the country in healthcare mandates — that is, things that the government tells the marketplace must be included in health plans.  The state is also notoriously heavy on regulation, and healthcare professionals in particular must navigate a gauntlet of requirements from just about every level of government.  Moreover, even before the Affordable Care Act (ACA) kicked in, somewhere around one-third of all Rhode Island residents were receiving either Medicare or Medicaid benefits.

In other words, anybody who states that the current healthcare system (before or after ObamaCare) is an example of the free market at work is either ignorant or lying.  And yet, here’s Steve Boyle, president of the Greater Cranston Chamber of Commerce, telling the House Finance committee to pass H7819, sponsored by Rep. Frank Ferri (D, Warwick), because “it’s been a free market… how’s that working out for you?”  (Clips culled from full video on Capitol TV’s House Finance page.)

Boyle says the state needs a “coordinated approach.”  “We all know there’s too many hospital beds, but I’m told over and over again that there’s not the political will to close them.”  Businesses in Cranston should consider whether it’s in their broader interest to support an organization that is pushing the state government to assume the power of eliminating hospital beds.  One wonders what other business activities Boyle would like the General Assembly to muster the “political will” to dictate.

Admittedly, Boyle had a tough act to follow in Claflin Company CEO Ted Almon, if only for sheer hypocrisy.  Calling himself “a pure pragmatist,” Almon declared that he doesn’t care if the solution for perpetually rising healthcare costs is “a free enterprise, or a left wing, or a single payer” one.

“Every dollar that we spend on healthcare,” he said, “goes to somebody who will show up here and grab a microphone and yell and scream and tell you why that can’t be done.”  By “that,” he means a “comprehensive” system in which Rhode Island’s entire healthcare industry filters through the state government.   Almon also perpetuates the lie (which he must know it is) that free market solutions have been tried and failed.

What makes his testimony hypocritical is that the company of which Almon is the CEO is the number 1 provider of medical devices to the state government of Rhode Island.  With the state’s sloppy record keeping, it’s difficult to know whether vendor payments to “Claflin Company” and “Claflin Service Company” are to the same business.  If they are, then their combined take in fiscal year 2013 was $470,913, down from $557,239 the year before.

But even counting only “Claflin Company,” the business still holds the lead in state government medical supplies payments by 27%, above Women & Infants Hospital.  Mr. Almon is a pragmatist, indeed.  His company’s relationship with the state is almost entirely in the area of Veterans Affairs, which (as we all know) is pretty far from a free market.  No doubt, Almon likes his company’s chances if legislators push everybody into the same bin.

For a better look at what it is that these two gentlemen think is worth a try (since we’ve apparently exhausted all of the possibilities that entail more freedom and choice), we turn to Nick Tsiongas, who was first to testify on the bill and undoubtedly had a hand in writing it.

Tsiongas’s description is the critical point, so it’s worth transcribing that entire clip:

The ACA is strong on providing health insurance for people, weak on cost containment.  This proposal is to proceed, through the ACA, for a state innovation waiver by 2017 that would ask the feds to allow us to move every healthcare dollar through the exchange, thereby making the exchange not a Travelocity for getting health insurance, but a Walmart that can set prices for its providers of services.

The problem is that Walmart does not control “every dollar” in its industry, as Tsiongas would like the state government to do through its HealthSource RI start-up company.  That would actually be a frightening monopoly that the government would quickly move to break up.

Walmart’s leverage comes in that it controls a large portion of its market.  Government already has that leverage in healthcare.  So, as Mr. Boyle puts it: How’s that working out for you?

Putting all of the pieces together, those who support the “active purchaser” model advanced in H7819 want healthcare to be a government monopoly so that “experts” who know better than the general public can decide how much of what to stock on the shelves, so to speak, how much the producers will be able to charge for their products, and how much the people will have to pay (almost certainly with the government’s usual penchant for picking favorites).



  • mangeek

    I question Rhode Island's _competency_ when it comes to managing and controlling so much data and money, but I sort of like the idea.

    I find it profoundly disturbing that I can't just go to the doctor and authorize them to access my medical records. I have to have them 'faxed' (yes, the 1970s technology) from one office to the other. I have friends who go to three different doctors to get three different prescriptions for three different pharmacies for the same addictive pills.

    You really do want all the people, service providers, suppliers, payments, and outcomes to either go through the same place so the info can be analyzed and value can be drawn from it. The 'free market' usually doesn't seek standards, it resists them.

    The free market excels at delivering just enough of what customers want, at a price they can afford. Unfortunately, with medicine, what you actually want to deliver isn't 'what people want', but 'what they actually need', and the price you want to charge isn't 'what they're willing to pay', but 'what it costs to provide'.

    Rationing care? Not really. What you'll see is new policy that comes from attaching dollar values to likely medical outcomes. Instead of cashing-in on terminal patients with $1MM operations to extend life six months, new metrics will be in place that say "Hey, it makes more sense to treat 100 working people's broken ankles than it does to fruitlessly try to add years to terminal retirees."

    As for getting between doctors and patients… I can't imagine a better thing. Getting between someone who wants to maximize profits and someone who is incentivized to spend from an infinite pool of available money? Yes please. Using Big Data to reduce risk and guide better medical decisions than any individual ever could? Bring it on.

  • justinkatz

    Mangeek,

    You fall into the trap. You really, really believe that the government will make rational — as opposed to political — decisions about allocates money where it's actually needed? Really?

    And you're much too casual about the intersections of want and need. It's not a simple question that can be answered. It involves such intangibles as the priorities of the patient/consumer.

    Here's an example: By a reasonably objective measure, I need an ankle operation. But at the price of the operation, the time off, and the prospect of an inalterable bone fusion, I don't, at this point, want it. These aren't simple questions, and the price mechanism is still a better, more-objective way of balancing things than government operatives with a global spending cap hanging over them.

  • Guest

    Mangeek…it's amazing the generalizations and assumptions you make to buttress your argument. Doctors only want money? People have an infinite pool of money? Really…

    Anyone can argue that gov't itself has skewed costs by not only intruding into the medical marketplace but also over regulation…and note the lack of tort reform. Much like college…when the gov't got into the loan ang grant business, the costs of college started to skyrocket.

    Also, who trusts these clowns? The dems sicked the irs on the right..and the Feds dropped the redskins trademark. On this path, it is only a matter of time before "the right people" get care, while others don't. What I really fear, however, is the loss of medical research. It's coming…

  • Warrington Faust

    Please name any government agency which has proved to be efficient at cost containment. Medical care costs will skyrocket, and be even more susceptible to lobbying and bureaucracy than it is now. Costs will get out of hand and we will receive care rationing. The government is already familiar with this from the military, where it is known as triage. Lest we forget, Britain reached the point of rationing more than a generation ago. Rationing may make some sense, but I don’t trust the government to make those decisions. People with courage do not normally seek government employment.

    • Guest

      Military people lack courage?

  • Max D

    Warrington Faust:
    "Please name any government agency which has proved to be efficient at cost containment."

    This is the bottom line. It's all a lie. You either understand it's a lie and oppose it or you benefit from the lie, whether it be directly or indirectly, and support it or you're completely ignorant to the facts.

  • chuckR

    Warrington Faust:
    "Please name any government agency which has proved to be efficient at cost containment."

    The only one I can think of is the FERS Thrift Plan with an expense ratio of $3 per $10000.
    They can't screw up everything, can they?

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