Rationing and Death Panels

November 17th, 2010 by Lee Eldridge

Dr. ObamaThis last week I exchanged a series of emails with a friend of mine. He is a proponent of a single payer, government run health care system. He also thinks the right is crazy for their talk of death panels, rationing, and how ObamaCare takes us down the road to a single payer system. I attempted to explain how virtually everything in ObamaCare leads to higher prices and higher premiums, and that it’s all done on purpose. They purposefully ignored ideas like tort reform and competition across state lines that could help to control prices. Premiums will rise. Businesses will drop their coverage. Millions will become uninsured. And my prediction all along has been that within ten years we’ll be faced with a much bigger crisis than we face today, and the only “solution” will become government run health care. It’s already playing out right in front of us.

This really isn’t new news. Many on the right have warned us about this eventuality. Many on the left have bragged how ObamaCare will eventually create a single payer system (though the media largely ignores them).

But this is not the purpose of today’s post.

During this exchange we also discussed rationing and death panels. Those on the left have criticized the right for fear mongering about death panels. They say they’re not real. Decisions will remain between patients and their doctors. I’ve criticized the right for the use of the phrase death panels as being overly dramatic. But here’s my point.

In a free market system, insurance companies decide what they will pay for and what they won’t. They ration care. But if you don’t like the offerings from one insurance company, you’re free to choose another. Competition forces insurance companies to provide care, even when some may judge the care as less beneficial or too expensive.

In today’s world, the government makes these same decisions in regards to Medicare and Medicaid without competition.

With ObamaCare, the government has taken a much bigger role in the decision of what insurance companies will pay for and what they won’t. The bigger problem is down the road with a government run system. I attempted to explain that the rationing of care will now be dictated by the federal government, and that in particular the elderly will have their care rationed because of the cost (which is high) and the perceived benefit (which is low). The government will have no competition. And if you don’t like where they decide to limit or ration care, you’ll have no alternative.

It appears that leftist economist and columnist Paul Krugman agrees with me. And to Krugman, this is good news. On ABC’s This Week, Krugman said:

Some years down the pike, we’re going to get the real solution, which is going to be a combination of death panels and sales taxes.

Medicare is going to have to decide what it’s going to pay for. And at least for starters, it’s going to have to decide which medical procedures are not effective at all and should not be paid for at all. In other words, (the deficit commission) should have endorsed the panel that was part of the health care reform.

And in case this wasn’t clear enough, Krugman wrote this on the New York Times website:

I said something deliberately provocative on This Week, so I think I’d better clarify what I meant (which I did on the show, but it can’t hurt to say it again.)

So, what I said is that the eventual resolution of the deficit problem both will and should rely on “death panels and sales taxes”. What I meant is that

(a) health care costs will have to be controlled, which will surely require having Medicare and Medicaid decide what they’re willing to pay for — not really death panels, of course, but consideration of medical effectiveness and, at some point, how much we’re willing to spend for extreme care

(b) we’ll need more revenue — several percent of GDP — which might most plausibly come from a value-added tax

And if we do those two things, we’re most of the way toward a sustainable budget.

It’s always interesting to me that reducing expenditures is never part of Krugman’s solutions. And on a related note from IBD:

Sharing Krugman’s belief that such a system is just fine is Dr. Donald Berwick, President Obama’s choice to head the Centers for Medicaid and Medicare Services. Berwick has said: “NICE is extremely effective and a conscientious, valuable and — importantly — knowledge-building system.” No, NICE is a system of rationing through a bureaucratic formula defining “cost-effectiveness” that has rushed untold numbers of Britons to an early grave. (Note from Lee: NICE is explained earlier in the piece from IBD. Read the full article if interested.)

“The decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open,” is what Dr. Berwick told a National Institutes of Health publication when he was just president and CEO of the Institute for Health Care Improvement.

The Obama administration’s health care reform is all about cost and little about care. Dr. Berwick has opined: “We can make a sensible social decision and say, ‘Well, at this point, to have access to a particular additional benefit (new drug or medical intervention) is so expensive that our taxpayers have better use for those funds.’ ” In other words, the government will decide whether treating you and extending your life is worth it.

Sounding more and more like rationed care and death panels to me.


22 Responses to “Rationing and Death Panels”

  1. Darin Says:


    While I agree the “health care law” does nothing to address the real problems of the system, I take exception to your implication that the current health-care system actually represents a free market.

    In reality, many people’s health insurance is tied to their jobs, and while they are free to decline that coverage and opt for individual or family plans, the expense of doing so often outweighs any potential benefits.

    If the system were truly free-market, there would be no “grouping” of customers. For example, my employer pays a large percentage of my health insurance premium, which have been increasing astronomically due to a chronic condition of one employee’s wife. This is a small office of 10, with 8 of the employees under age 40, yet our rates are determined largely by one outlier’s costs instead of the average. Were this a larger company, with hundreds or thousands of employees, the insurance company would naturally see that their risk is spread throughout a much larger group, and therefore individual premiums would decrease. Why are these insurance companies, with millions of subscribers, allowed to compartmentalize their policies in this way?

  2. Lee Eldridge Says:

    Hey Darin. Great points. Maybe describing it as “more free market than a government run solution” is a more accurate description 🙂

    Personally, I think we need to do away with work-provided health insurance. It makes an uneven playing field for those who are self employed, or choose to work for smaller employers. It puts us at a competitive disadvantage. We’re smart enough to buy life insurance, home insurance and car insurance. We can buy our own health insurance as well.

    You’ve described another problem with the current system, that ObamaCare doesn’t fix either. The system punishes the healthy. I get premium life insurance rates because I’m healthy and take care of myself. I get premium car insurance rates because I’m a good driver, don’t get tickets, and don’t crash my car. Yet I’m forced to pay higher health insurance premiums because OTHER people refuse to exercise, they eat too much, smoke too much, and drink too much. By far the majority of health issues in our country are self induced.

    Actually, I have a plan for fixing our system, but it’s too long to add here. Soon I’ll get it written up for the blog.

  3. Lee Eldridge Says:

    BTW Darin, I would suggest looking into your own health insurance coverage outside of your employer’s program. Kristin and I are moving to a high deductible plan (costs significantly less than OUR portion of our old group plan), and opening up an HSA. Send me a note if you want more information.

  4. Ralphie Says:

    The real problem is one half of our elected officials aren’t in it for the American people. Those jerks forced a worse plan that was so called done in secrecy because that’s what targeted people have to do, conspire in the dark. You act like repubs care more and they don’t. You are delusional if you think the Rs were interested in helping O, helping the uninsured, hurting the insurance lobby. What progress was made under bush? Blame the guy who has the guts to make watered down progress when your party has done nothing but wreck america.

  5. Ralphie Says:

    Btw krugman is talking about reducing expenditures when he talks about HCR, that’s why he talks about it. Your party talks about eliminating earmarks which doesn’t reduce anything, but does sound good to the low info voter.

  6. Frank Says:

    Darin, I agree. What we have now is NOT free market. I think we can even the playing field by stop making health insurance a “benefit” of employment. Pay decent wages, and everyone is responsible for purchasing their own insurance. Although the thought of health insurance companies advertising on TV makes me somewhat physically ill. One the flip side, we could build a system for those who can’t get coverage. An indiv who is denied coverage for whatever reason x times, they can submit the turn-down letters to a governing body, who in turn fairly distribute these folks to the insurance companies at a predetermined rate. Granted, it would be a higher rate. There would be an appeals process as well.

    Ralphie, the current system is broken. It needs to be completely overhauled. But not this. And not this way. Obama’s plan further breaks a rickety and costly system by making it more rickety and costly with the purpose of getting a single-payer, government-run health care system. I don’t agree that is an end that is good for our country. But worse, getting there has even more less desirable consequences.

    It usually bugs me that some folks can’t stay on the blog topic on hand, but had some stuff to say about Obamacare. Alright Ralphie, ready for your name calling. Ready, set, GO.

  7. Bobby Says:

    Ralphie and Frank straying from the topic.

    Yes Krugman was talking about deficits. That doesn’t change the fact that he’s talking about the benefits of death panels and rationing care in regards to deficit reduction.

    Ralphie, the problem is that the left wrote an Obamanation of a bill behind closed doors that they didn’t bother to read (Pelosi = we’ll find out what’s in the bill when we pass it), then passed it using every dirty trick in the book against the wishes of the public.

  8. Ralphie Says:

    I was talking about obamacare Frank. And discussing the completely two-faced and un-American manner in which it ended up the way it did, at the hands of the Rs and blue dog dems. All I can say is I look forward the newly electeds proposals to cut cuts, fix HCR and control our deficit.

  9. anon Says:

    Rationing is the prohibition against buying a product, not the inability to buy it. This is a very subtle distinction that liberals obscure to confuse the public.

  10. Lee Eldridge Says:

    You guys have been busy today. Appreciate all the comments. Let’s pull a Krugman and I’ll go back and re-explain my point.

    Rationing happens in health care every day. Insurance companies have to place limits on what can and will be covered. The government has to put limits on what Medicare and Medicaid will cover.

    I have friends who support ObamaCare who want to pretend that “rationing” and “death panels” will not exist once the government takes over our healthcare system. That’s just plain lunacy and wishful thinking. Even the government acknowledges that there will be rationing (see Berwick’s quote above). Krugman explains from an economist’s perspective that “death panels” will need to make decisions as to where treatment ends. (Which means that these decisions will NOT be between patients and their doctors.)

    Why? Because if the government doesn’t ration it, costs will spiral out of control. It is certainly my opinion that the government will ration care considerably more than the private sector where competition exists.

    Ralphie, I know there are people in our country who believe that government run healthcare is the solution. Most of us disagree (according to the polls). What makes me personally angry about ObamaCare is how they lied to us to pass it. They greatly underestimated the costs (new projections are showing that 3-4 times the number of people will be receiving government assistance to pay for premiums than originally projected, and I think that number is still too low). They greatly overestimated the savings i.e. bending the cost curve (of which there will be none). And it was all created this way on purpose, not to fix our current system, but to push us towards a whole new system.

  11. Steve Says:

    Lee, you say you criticize the people for the use of the term “Death Panels” as being overly dramatic, then you say that it’s lunacy to believe that they wont exist. There is hardly anything “free market” about health insurance when it comes down to your most alarming complaint of rationing care for the elderly: “The government will have no competition. And if you don’t like where they decide to limit or ration care, you’ll have no alternative.” You say, “It is certainly my opinion that the government will ration care considerably more than the private sector where competition exists.” So tell me what alternative the elderly health insurance consumer has when they are diagnosed with a life threatening disease and their insurance says they won’t cover any more treatment for it, if any at all. You think they’ll just take their pre-existing condition and go shop around for better coverage, or a lower premium? It’s difficult to alarm people of the impending badness of “Death Panels” and “Rationing” when you admit it is essentially what our current health insurance industry model is based on, just for a profit.

    This man has authored a book entitled Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans: a former CIGNA executive came to Congress with a simple message:”My name is Wendell Potter and for 20 years, I worked as a senior executive at health insurance companies, and I saw how they confuse their customers and dump the sick – all so they can satisfy their Wall Street investors.”

    I have little interest in arguing the specifics and details of health care such as what constitutes a “death panel” and if it will be so many degrees more offensive if the government controlled them versus private industry. I think that the bottom line is that there are two camps concerning health care. People who believe it’s a commodity and people who believe it should be a right in this country. I’d guess more people who think that capitalism and the free market are the cure to the health care problem probably view it as a commodity, whereas I happen to be in the latter group.

  12. Ralphie Says:

    Amen Steve! I read a study the other day which seemed to verify that “obamacare” will save this country money, if all the elements are left in tact.

  13. Lee Eldridge Says:

    Steve, very articulate as always.

    I loathe to defend the insurance companies. And we desperately need changes to our current system. I just don’t like the current set of changes (ObamaCare), or where they’re taking us. There is a better way.

    And is health care a “right”? I struggle with that too. Where do our “rights” come from? We have the right to life, liberty and the pursuit of happiness. Does that mean we have a right to health care, food, education and a roof over our heads? Where does personal accountability and responsibility kick in?

    We’re a compassionate society. As far as I’m concerned, we’re the most compassionate country in the world. Just look at how we step up when there’s a crisis. The millions given to Haiti — not by the government or by business, though they gave too — but by individuals.

    As a compassionate society, we want to take care of each other too. And I 100% support that we need social programs (both in the private and the public sector) to help those who fall through the cracks.

    What concerns me is that if our goal is to provide equal health care to all, do we do it at all cost? What if the cost is a greatly reduced quality of care? Is it better to “provide” health care to ALL citizens, if the quality and availability is 20% worse than it is today? 30% worse than it is today? Do we bring down the quality of care for the majority so that we can make sure to provide it for everybody? Because that’s what a single payer government run solution will do.

  14. Ralphie Says:

    What is important is that we should cut services for the less fortunate, but rewnew borrowed-money tax cuts for the wealthiest who will just pocket the money – now that prioritization makes sense Lee! Your right wing has lost their mind, and their ethics.

  15. Lee Eldridge Says:

    Ralphie, you’re barking up the wrong tree. They’re not my republicans, and I’m on the record for saying that I’d compromise on the tax cuts and phase in tax increases on the rich over the next several years to pre-Bush tax rates.


  16. Ralphie Says:

    Am I lee? – here’s your feelings on ‘raising taxes for the rich’ from your cited blog post:

    “As you know, the Bush tax cuts are set to expire at the end of the year, and it doesn’t appear that Congress is in any hurry to bring this to a vote. Why? Because Pelosi and Reid don’t have enough votes to achieve their desired outcome — increasing taxes on the rich. What’s most disappointing is that this is really an opportunity for Congress to do something right, and they’re not going to do it.”

    You also endorse spending another $700B on created a new tax cut for the upper income with this statement:
    “Let me say this very simply so that even Mr. Geithner can understand: Raising taxes will NEVER benefit the economy, and WILL negatively affect growth.”

    Again, i guess youre smarter than Alan Greenspan who says tax cuts dont pay for themselves. He also says we cant afford to reissue this Bush tax giveaway.

    And by the way, this tax cut was a law that was SUPPOSED TO SUNSET THIS YEAR. So you tax giveawayers are the ones who want to change the law and pass a new law to create more cuts, not Pelosi/Reid and Obama who arent so bought out (which is ironic because who is buying you out?) that they are willing to do the bidding for the unneedy when we are $13T in debt.

    You say cut spending..but you arent for real on that argument and are very misguided in saying at the same time that we must increase spending by $700B (near the cost of HCR which you dont like) to give millionaires taxes that WILL NEVER BOOST THE ECONOMY.

  17. Lee Eldridge Says:

    Ralphie, you’re confusing and mixing issues as usual.

    1 – Raising taxes is detrimental to the economy, whether you raise them on the rich, the middle class, or the poor. Or businesses for that matter.

    2 – While I believe that letting the tax cuts for the rich expire is a negative for the economy, there are several more significant factors weighing on our weak economy. I think the positives of tackling deficits and debts in a real and meaningful manner would far outweigh the negatives economically of allowing the Bush tax cuts on the rich to expire. That’s what a compromise is all about, which is what I proposed. Though I have no faith that any of this will happen.

    Personally, I would not raise taxes on the rich. I would cut more out of the budget. I could trim $700B out of the budget to pay for these tax cuts without working up a sweat.

    3 – As far as the tax cuts sunsetting, so are the tax cuts for the middle class, which is I believe to the tune of $3 trillion over the next 10 years. (Though don’t quote me on that figure. That’s from memory. I didn’t google it.)

  18. buddy Says:

    word up

  19. buddy Says:

    i guess this blog is like a George Bush or Joe Miller town hall, keep out the dissenters.

  20. Lee Eldridge Says:

    Patience Buddy, first time posters have to be approved before comments go live.

  21. buddy Says:

    I agree with the Oracle of Omaha, who most people would agree knows a thing or two about finances:

    I also agree with Ralphie!

  22. buddy Says:

    Allow me to pull a quote for you:
    “They say you have to keep those tax cuts, even on the very wealthy, because that is what energizes business and capitalism,” anchor Amanpour said.

    “The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on,” Buffett explained.

    Hold on Warren, Lee Eldridge on Line 2 to lecture you…after he lectures Geithner