Accuracy in Media

Obamanation: A Day of Truth
Accuracy in Media Conference 9/21/2012
Speaker: Betsy McCaughey
“Scientific Evidence Proves Obamacare will Harm Seniors”
Transcribed by J. C. Hendershot & Bethany Stotts

MCCAUGHEY: This is the “Patient Protection and Affordable Care Act,” the Obama health law.  I’m glad to be with you.

President [Barack] Obama is crisscrossing the nation promising to “save Medicare as we’ve known it.”  He’s right here in Washington, D.C. today, making that promise to the AARP.  This election shouldn’t turn on a lie, and the truth is that the cuts to hospitals, and doctors, and hospice care, and dialysis centers, and home care—the cuts under the Obama health law to the providers of care to seniors are so severe that the Obama health law destroyed Medicare.  Eviscerated it.  You haven’t felt the effects yet, but you will soon.  The only thing left of Medicare is the membership card.

The Obama health law creates two new entitlements for people under age 65: Subsidies to buy private health plans, and a vast expansion of Medicaid.  To pay for these two new entitlements, this law raises taxes by over half a trillion dollars, and then takes well over half a trillion dollars out of future funding for Medicare.  So seniors pay over half the cost of these new entitlements.  Cuts to Medicare pay for over half the cost of this Obama health care law.  It’s like robbing Grandma to “spread the wealth.”

Based on the data from Medicare’s own actuaries, every single year Medicare will have less money to spend on a senior than before this law was passed.  For example, in 2019, Medicare will have $1,431 less to spend, per senior, than if the law hadn’t passed.  But averages obscure the real impact, understate the real impact, because, in a given year, only about one of out of every five seniors, 22%, go to the hospital.  So, for the senior who needs care that year, the impact is far greater—between $5,000 and $6,000 less in resources to care for that person.

What will it look like?  What will it feel like?  What will the impact really be?

How is this done?  Well, the law cuts payments to providers—you’ve heard the President say that many times—it cuts payments to hospitals, doctors, dialysis centers, hospice care, home care.

Let’s look at hospitals first, because this is where there will be many unnecessary deaths.  Soon you will begin to see the changes in hospitals: The emergence of an environment of scarcity.  Fewer nurses on the floor.  Waits for MRIs.  Less physical therapy available.  Less room cleaning.  The Obama health law takes $247 billion out of future funding for payments to hospitals over the next decade.  Hospitals will have $247 billion less to care for the same number of seniors.  Now the President says—and he’ll say it today again at AARP—“Don’t worry, I’m only cutting payments to providers, I’m not cutting benefits for seniors.”  Don’t be bamboozled!  It’s a trick.  It’s an illusion.  The fact is that Medicare already pays less than the actual cost of care to a hospital—91 cents for every dollar of care delivered.  So when the payments to hospitals are cut, it’s not going to trim hospital profit margins—they’re already in the negative!  It’s going to force hospitals to deliver less care.

Just as an aside and an illustration of what happens when you cut payments to hospitals, let’s move away from Obamacare for a second to something that was in the news last week: The White House announced on September 14th that, in compliance with the Budget Control Act of 2011, what they call “sequestration,” they announced all the cuts that they were going to make in defense and in domestic programs—right?—including substantial cuts in what hospitals will be paid to care, once again, for Medicare patients.  Now, these cuts are quite small compared with the cuts under the Obama health law, but they’re added on, clobbering hospitals twice.  Right away, the American Hospital Association and the American Nurses Association responded by explaining that these small cuts were going to result in 93,000 fewer nurses and other hospital employees providing care next year—93,000 fewer nurses and other hospital employees, fewer physical therapists, fewer room cleaners, fewer dietitians.

So, when politicians say to you, “Don’t worry, the cuts are only to providers, not to benefits,” that’s a flim-flam.  These cuts in what hospitals are paid to care for seniors will worsen the chance that elderly patients survive their hospital stay, and recover.  Scientific evidence proves it—it’s quantifiable!  The Annals of Internal Medicine, a very prestigious medical journal, published, in 2011, the data showing that elderly patients treated in low-spending hospitals had a substantially worse chance of recovering from their illnesses than patients of exactly the same age, with the same diagnosis, the same illness, treated at a higher spending hospital.  For example, elderly patients who went to the hospital with a heart attack were 19% more likely to die from it in a low-spending hospital than in a high-spending hospital; in the high-spending hospital they had a better shot at recovering and leaving the hospital.

This is not political research!  This is research sponsored by the National Institute on Aging and RAND, published in a preeminent, peer-reviewed journal, based on data from 2 million patients.  Washington, where are you?  When reporters listen to the President say, “I’m only cutting providers,” why isn’t anybody asking, “Well, what will the impact of that be?”  We have a mountain of scientific evidence.  Somebody should be talking about it.

The Annals of Internal Medicine shows that over a four year period, in one state, nearly 14,000 seniors with common conditions—stroke, pneumonia, heart attack, congestive heart failure, hip fractures, and others, died in low-spending hospitals—bottom quintile—but would have survived and recovered and gone home had they received the care available at a higher spending hospital.  Nearly 14,000.  That was the death toll in one state, California, with 10% of the Medicare population.  And despite this evidence, despite this evidence—in fact, in disregard of this evidence—the Obama administration is pushing hospitals in all 50 states to imitate the low-spending hospitals where the death rates are higher!  It is reasonable to predict, based on this evidence, that the regulations and cuts in this law will cost at least 35,000 elderly patients their lives every year.  35,000 patients in hospitals, dying, who could have recovered had they received the care available at a higher spending institution.

In just a few days, October 2012, the Obama administration will start awarding “bonus points” to the hospitals that spend the least per senior.  Oh, yes!  Section 3001 of this law, for the first time, creates a new “quality measure for Medicare.”  It measures spending per Medicare beneficiary, and awards the bonus points to the hospitals that spend the least per senior!  And it whacks the higher spending hospitals with demerits, not only for what they spend on a patient while the patient is in the hospital, but also what is spent on that patient for the three months after hospitalization.  So hospitals also get hit with demerits for recommending physical therapy after the patient leaves the hospital, or even recommending a doctor’s visit; it’s all counted.  These regulations are not going to wring out the fraud, waste, and abuse.  No, they are going to force these hospitals to provide a lower standard of care: Nurses spread thinner, less cleaning of rooms, waits for MRIs, less physical therapy, and most significantly, higher death rates.  History proves it’s true: In 1997, when the Balanced Budget Act cut Medicare payments to hospitals, the hospitals that were clobbered with the biggest cuts eventually saw that the death rates for their heart attack patients were 6% to 8% higher than at the hospitals that weren’t hit with the big cuts.  Research published in March of 2011—certainly available to the Obama administration—research published by the National Bureau of Economic Research, a preeminent group, shows why the death rates were higher: The hospitals that were hit with the payment cuts laid off nurses.

Now this research did not examine the impact on younger patients but it’s obvious that when the nurses are spread thinner, it impacts all the patients: You press that button for help and you have to wait longer—sometimes too long.

Richard Foster, the chief actuary of Medicare, warned Congress twice that these cuts to hospitals are so severe that they’re going to force 40% of hospitals, ultimately, to operate in the red.  Long before the Obama administration, the Institute of Medicine warned that about 18,000 Americans die prematurely each year because they don’t have health insurance.  That’s tragic.  It has to be fixed.  But the remedy that this Obama administration and this law provide will cause twice that many deaths, because it cuts payments to Medicare providers as a way of funding the increasing coverage.  There are safer ways to control Medicare spending—inching up the eligibility age, for example, or asking well-off seniors to pay more—but this approach is deadly.

Let me just offer two more observations.  When Medicare was founded over 50 years ago it transformed the experience of aging in this country.  I remember, as a kid, when people were in nursing homes because they were so out of breath with congestive heart failure they couldn’t get around, or they were stuck in wheelchairs, crippled with arthritis.  But we have lived through the Golden Age of Medicine, and because of Medicare, it’s been accessible to all seniors.  Five procedures have transformed the experience of aging in this country, five procedures: Hip replacements, knee replacements, angioplasty, bypass surgery, and cataract surgery.  Now older people enjoy their later years being active—they even come to conferences like this!  The Obama health law will undo that progress.  If you’re seriously ill, the best place to be is in the United States.  A woman diagnosed with breast cancer here has over a 90% chance of surviving it; in Europe her chances are less than 80%.  You do the math: That means she’s twice as likely to die from it.  A man diagnosed with prostate cancer here will recover; it’s not a death sentence here.  But in Europe 23% of men diagnosed with prostate cancer ultimately die from it.  And most importantly, if somebody in your family has what it is considered an incurable illness, this is the nation of hope.  This is where the new cures are developed.  Since 1950—since 1950!—the United States has won more Nobel Prizes in Medicine and Physiology than the entire rest of the world combined.  We have to make sure that the next generation of Baby Boomers and seniors have access to all these breakthroughs, and to this fine quality of care—and that’s why we must repeal this law: Because it is an assault on seniors.  Thank you.

Some questions?

MCCAUGHEY: Yes, sir?

AUDIENCE MEMBER 1: Now, does this version of Obamacare still have this business where young people, like my son, have to buy insurance, or they face a fine?

MCCAUGHEY: Yes, health insurance is mandatory under the Obama health law.

AUDIENCE MEMBER 1: Okay, so now here’s the part I’m worried about: My son’s a bit recalcitrant.  Let’s say he doesn’t buy insurance and then he fails to pay the fine: Is the government then going to come and confiscate his Game Boy or his car or his bank account, or are they going to imprison him?  How do you enforce that?

MCCAUGHEY: The IRS is in charge of enforcement.  The general method will be, if he has a refund coming, they won’t provide it.  We’re not talking about jail terms or anything like that; it’s just your relationship with the IRS.


AUDIENCE MEMBER 2: I hate to quiz you on a 2,700 page bill, but—

MCCAUGHEY: It’s okay; I’ve gone through it.  Several times.

AUDIENCE MEMBER 2: I trust that you have.  Could you give the legal cite for where the hospitals have bonus points on spending less on Medicare?

MCCAUGHEY: Yes: Section 3001.

AUDIENCE MEMBER 2: Great, thanks.

MCCAUGHEY: I wanted to point out a couple of others, by the way—but I didn’t want to exceed my time.  But there were two other portions of this law that I did want to talk about.  One was, you hear the President say all the time that he’s not cutting benefits to seniors—but if you look at Section 4105(a) you will see that, in fact, it provides that the Secretary of Health and Human Services, in collaboration with the U.S. Preventive Services Task Force, can modify or eliminate preventive services for seniors based on that task force’s recommendation.  This is the task force that won notoriety last year for recommending that women 74 and older no longer get annual routine mammograms.  So, in fact, seniors are in danger of losing their access to routine colonoscopies or mammograms.  And half a page later, in the same law, it expands the authority of the Secretary to enhance the access to preventive services by people on Medicaid.  I’m not against people on Medicaid having preventive services, but the agenda here is clear: You’re taking from one group and giving to another, and I believe that that is wrong.

The other thing I wanted to point out is this—and this should be of grave concern to seniors, and Richard Foster has bravely pointed this out several times to Congress—the reimbursements to doctors, under this law, are cut so low that doctors treating Medicare-eligible patients will be paid less for those patients than for anybody else: Less than they are paid for Medicaid patients, only about a third of what they’re paid to care for a patient who has private health insurance.  Of course the result, as Richard Foster has pointed out, is that there will be serious access problems.  But even the doctors who continue to take Medicare are not going to want to spend time on something like a hip replacement—right?—for such low pay.  And here’s the problem: The law prohibits that doctor from saying to his patient, “I’ll give you that care you need for an extra fee.”  That’s against the law, so you’re trapped.

AUDIENCE MEMBER 3: I wanted to ask what this plan would do to something like Kaiser.  I’ve had a good experience with Kaiser.  It seems, to me, to be a good model, an efficient model.  What is Obamacare going to do to other plans?

MCCAUGHEY: Are you talking about Kaiser for people under age 65?

AUDIENCE MEMBER 3: Actually, in general.


AUDIENCE MEMBER 3: What is it going to do to well-operated—

MCCAUGHEY: Well, Kaiser is your insurance company.  They offer PPOs and managed care, and they have managed care on the California model, which is the staff model.  So Kaiser is a chain of buildings where you go in and there are doctors and other medical professionals, and you get your care, often on a capitated basis.  Here’s what’s happening that I think is of gravest concern to patients—I look at it from more the point of view of patients, so if you’re a shareholder of Kaiser I can’t help you there—Section 1311 of this law empowers the federal government, for the first time, to dictate how doctors treat privately insured patients.  So even if you’re in Kaiser, or Signa, or Aetna, or UnitedHealthcare, the federal government’s still in charge of your care.  Read Section 1311: It says that those private insurance companies can reimburse only the doctors who follow whatever dictates the Secretary of Health and Human Services imposes in the name of “quality.”  Well, that covers everything in medicine, whether your cardiologist recommends a stent versus a bypass, whether your OB-GYN says you need a Caesarian section.  One of the things astounds me about this is that women’s groups have been so supportive of the Obama health law—women’s groups who went to the barricades for decades to prevent the federal government from accessing their medical records or dictating to their doctor.  Now they’re supporting a law that does both!

Yes, sir?

AUDIENCE MEMBER 4: How does the Romneycare from Massachusetts compare as far as imposing the cost restrictions?

MCCAUGHEY: Right. Well, I’ll tell you what my gravest concern is with what’s happening in Massachusetts, and it’s actually just happened this summer: The Massachusetts legislature has imposed the second phase of what they call “health reform”—I avoid using that word because it has a positive connotation, reform, you would think it would be an improvement—but what’s going on in Massachusetts now may soon be the second iteration of Obamacare, and I’ll tell you why: Massachusetts for the first time has adopted a legally binding limit on what all the residents of Massachusetts can consume in health care, what they call a “global budget,” an annual cap on how much health care the people residing in that state can consume.  Can you imagine?  And they’re tying it to GDP.  Well, what if there’s a flu epidemic?  It may not be related to GDP.  The two statistics have no relationship to each other, but they are actually going to limit how much care hospitals can provide in a given year—totally!  Right?

Hillary Clinton had this in her health plan way back in 1994, and it was evident to everyone that it was misguided, because too many things can happen in a region of the country, or in a particular city—how can you limit how much health care people need, and tie it to something like an economic indicator of that nature?  Well, what’s of even graver concern—the people of Massachusetts, let them deal with their problems—is that in The New England Journal of Medicine this summer, all the key advisors to the Obama administration on health care—Ezekiel Emmanuel, David Cutler, and others; Uwe Reinhart, they were all on the list—proposed that every state in the nation adopt a similar global budget, and it’s enforceable.  For example, in Massachusetts a hospital that exceeds what the state says that hospital should provide in health care during a given year gets slapped with a $500,000 fine per offense.  What’s so bad about health care—especially if you pay for it yourself?  Can you imagine?  But they don’t want the state to exceed a certain amount of health care, because, their thinking is, if people pay for it themselves, well, some people may get more than others—and they don’t want anyone to have a different health care experience based on ability to pay.  Well, we all want to make sure that people have enough health care, but I also believe that if you earn your own money, and you want to spend your extra income enhancing the health and welfare of your family, you go for it, buddy!

Thank you.

ARONOFF: Thank you.

Ready to fight back against media bias?
Join us by donating to AIM today.


Comments are turned off for this article.