'Death panels' are real -- brought on by budget pressures

By Norman J. Ornstein
Saturday, January 1, 2011

During the debate over health reform, Rep. Michele Bachmann (R-Minn.), Sarah Palin and others railed against the "death panels" that would result from the bill. Government bureaucrats, critics said, would decide who would die and when. The bill passed - and indeed there are death panels. But they do not come from the Patient Protection and Affordable Care Act, a.k.a. "Obamacare." They come from Republican administrations in states such as Arizona and Indiana.

In Arizona, the government headed by Gov. Jan Brewer summarily stopped approving Medicaid payments for many organ transplants in October; one man had a liver virtually snatched away while he waited to go into the operating room. He couldn't get it unless he came up with $200,000 to pay for the procedure.

In Indiana, the state Medicaid program denied a lifesaving operation last year to a 6-month-old boy who lacked a thymus gland, which generates cells that the body uses to fight infection. The Indiana Family Social Services Administration said the procedure was "experimental" - even though it had been successful in 43 of the 60 cases in which it had been applied. The state twice denied the family's appeals, but fortunately the publicity caused by this case prodded two health-care companies to pay for the $500,000 operation.

These are real death panels. They are far from the Affordable Care Act's provision for end-of-life counseling for families to enable them to make rational decisions about their loved ones outside of the awful stress in a hospital or hospice. But these decisions are not being made by evil people reveling in the anguish of patients on Medicaid; they are the result of painful choices made by state governments struggling with a sluggish economy, balanced budget requirements and soaring Medicaid costs. States have to react, and one solution to their constraints is rationing care.

In other words, the nightmares of conservatives bitterly opposed to health reform are coming true on two fronts, but with zero relation to the reform bill they opposed.

Things are about to get worse. Nearly all states have balanced-budget requirements; many have stayed afloat the past two years thanks in part to stimulus money, which is just about gone. In addition, governors and state legislatures have used up the one-time savings options or budget gimmicks, and they have already cut the fat, and in some cases muscle, from their budgets. The only cuts left are hard ones, usually in the areas that hit the most vulnerable. This means Medicaid first and foremost.

There are, of course, many ways to slash Medicaid budgets: cutting payments to providers, cutting benefit levels, cutting procedures, cutting the number of recipients. Another approach, at least considered by Texas Gov. Rick Perry (R), is to eliminate the Medicaid program and give the state unfettered freedom to design its own starkly limited health-care plan for the poor.

But each approach has severe drawbacks. Provider payments for Medicaid are already so low that many health-care providers shun the program. Cutting benefits or cutting programs - which inevitably will mean aiming at the most expensive ones - will lead to bureaucrats making life-and-death decisions based on money alone, and it will include perversely stupid budgetary decisions. Transplants save money and lives compared with the other options, but the savings are seen in the long term, while state politicians are thinking of how they can balance their budgets this year.

As for the Texas option, it would require giving up a huge slice of federal dollars that subsidize Medicaid, with no source of replacement. Texas is already stingy when it comes to aid for the poor; this move would probably result in increased pressures on already overburdened hospital emergency rooms and, worse, back-alley births.

This is not a future scenario. The dilemmas of state governments are here now. The same kinds of pressures have been building for years in nearly all public- and private-sector health programs as rising costs have to be met by measures to contain them, which means some form of rationing, whether done by employers, health insurers or others. The Affordable Care Act was spurred by these mounting pressures and included, in one form or another, nearly every idea for containing costs without resorting to the blunt instruments Arizona and Indiana are using. Those cost-retarding programs and vehicles are near the top of the incoming House Republicans' hit list for the health-reform legislation. They may want to rethink their repeal efforts even as their counterparts in states are rationing up a storm.

Norman J. Ornstein is a resident scholar at the American Enterprise Institute and co-author of "The Broken Branch: How Congress Is Failing America and How to Get It Back on Track."

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